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| The Tax Publishers2020 TaxPub(DT) 2794 (Del-Trib) INCOME TAX ACT, 1961
Section 90
Payment received by non-resident assessee for copyrighted article represented purchase price of an article, hence, same was not in the nature of royalty under article 12 of Indo-US DTAA. Accordingly, there could be no taxability in India.
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Double taxation relief - Agreement between India and USA - Royalty under article 12 - Revenue from supply of software to customers--No transfer of any copyright in software
Assesee based at USA received payments from Indian entity towards supply of software. AO treated the payment as in the nature of royalty and, therefore, taxable in India. Held: As evident, from terms of concerned licence agreement, there was no transfer of any right in respect of copyright in software by assessee and it was a case of mere transfer of a copyrighted article. The payment for copyrighted article represented purchase price of an article, hence, same was not in the nature of royalty under article 12 of Indo-US DTAA. Accordingly, there could be no taxability in India.
Followed: Director of Income Tax v. Infrasoft Ltd. (2014) 220 Taxman 273 (Del) : 2014 TaxPub(DT) 79 (Del-HC), Director of Income Tax v. Ericsson AB & Ericsson Radio System AB & Metapath Software International Ltd. (2012) 343 ITR 470 : 2012 TaxPub(DT) 20 (Del-HC).
REFERRED :
FAVOUR : In assessee's favour.
A.Y. : 2014-15 & 2015-16
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