The Tax Publishers021 TaxPub(DT) 5403 (Mum-Trib) Shell India Markets (P) Ltd. v. ITO (TDS) In Favour of Assessee, Mum-Trib, ITA Nos. 6064, 6065, 6066 & 6067/Mum/2019, 24-Sep-2021

INCOME TAX ACT, 1961

Section 195

Amounts paid by resident Indian end-users/distributors to non-resident computer software manufacturers/suppliers, as consideration for the resale/use of the computer software through EULAs/distribution agreements, was not the payment of royalty for the use of copyright in the computer software, and same did not give rise to any income taxable in India, as a result of which assessee was not liable to withhold tax under section 195.

Tax deduction at source - Under section 195 - Licence fee for use of HR software paid to non-resident treated as royalty by AO -

Assessee paid licence fee for use of HR software to non-resident. AO treated payment made by assessee as royalty and thus disallowed deducton for want of TDS under section 195. Held: Amounts paid by resident Indian end-users/distributors to non-resident computer software manufacturers/suppliers, as consideration for the resale/use of the computer software through EULAs/distribution agreements, was not the payment of royalty for the use of copyright in the computer software, and same did not give rise to any income taxable in India, as a result of which assessee was not liable to withhold tax under section 195.

Following:Engineering Analysis Centre of Excellence Private Ltd. v. CIT & Anr. (2021) 432 ITR 472 (SC) : 2021 TaxPub(DT) 1208 (SC).

REFERRED :

FAVOUR : In assessee's favour.

A.Y. : 2009-10



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