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| The Tax Publishers2020 TaxPub(DT) 0358 (Mum-Trib) INCOME TAX ACT, 1961
Section 9(1)(vi)
Where receipt on account of sale of shrink-wrap software was not in the nature of royalty, the same would not be taxable in India under the provisions of section 9(1)(vi) as well as Article 12(3) of the DTAA between India and U.S.A.
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Income deemed to accrue or arise in India - Under section 9(1)(vi) - Agreement between India and USA - Receipt on account of sale of shrink-wrap software
AO was of the view that receipts from sale of shrink-wrapped software by assessee-US based entity to clients in India would be taxable in India, being in the nature of royalty under the provisions of section 9(1)(vi) as well as Article 12(3) of the DTAA between India and USA. Assessee contended that payments received on sale of shrink-wrapped software were in the nature of 'sale of copyrighted article' and not 'transfer of copyright right' as the end users in India obtained only a right to use the software products as against any copyright right. Held: In view of assessee's own case of earlier assessment year, receipt on account of sale of shrink-wrap software was not in the nature of royalty and hence, the same would not be taxable in India under the provisions of section 9(1)(vi) as well as Article 12(3) of the DTAA between India and U.S.A.
REFERRED :
FAVOUR : In assessee's favour
A.Y. : 2015-16
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