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| The Tax Publishers2019 TaxPub(DT) 5835 (Pune-Trib) INCOME TAX ACT, 1961
Section 90
As evident, non-resident assessee transferred limited right in CAD/CAM to SAPL and there was no transfer of copyright or use of any copyright and as there was no transfer of any right in respect of copyright by the assessee to SAPL, going by definition of term 'royalty' given in article 12(3) of India-Swedish DTAA, consideration received from SAPl could not be construed as 'royalty' in the hands of assessee and since assessee had no PE in India, there could be no taxability.
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Double taxation relief - Agreement between India and Sweden - Royalty under article 12(3) - Consideration received on account of transfer of limited right in CAD/CAM--No transfer of copyright or any right therein
Assessee based at Sweden received CAD/CAM monthly cost from SAPL. AO treated the amount received as royalty in terms of articel 12(3) of India Swedish DTAA and, therefore, taxable in India.Held: As evident, non-resident assessee transferred limited right in CAD/CAM to SAPL and there was no transfer of copyright or use of any copyright and as there was no transfer of any right in respect of copyright by the assessee to SAPL, going by definition of term 'royalty' given in article 12(3) of India-Swedish DTAA, consideration received from SAPl could not be construed as 'royalty' in the hands of assessee and since assessee had no PE in India, there could be no taxability.
REFERRED :
FAVOUR : In assessee's favour.
A.Y. : 2014-15
INCOME TAX ACT, 1961
Section 90
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