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2018 (1) TMI 793 - AT - Income TaxTaxability of supply of software - Supply of off the shelf software treated ‘Royalty’- receipts from supply of software - amount receivable treated as grant of ‘copyright’ - existence of PE - DTAA - Held that:- The definition of Royalty under the Indo-Ireland Tax Treaty is pari-materia as that under Indo-US Tax Treaty and the Coordinate Bench of the Tribunal had already decided the issue of taxability of supply of software under the same agreement in favour of the Intec- Ireland with reference to the Indo-US Tax treaty for the Assessment Year 2002-03, wherein it has been held that receipts from supply of software are not taxable in the hands of Intec-Ireland as Royalty. Therefore, since both the treaties are pari-materia with each other, we hold that the receipts from supply of software are not taxable in the hands of Intec–Ireland as Royalty under new Ireland tax treaty. Intec-Ireland does not have PE in India and accordingly amounts received by Intec-Ireland towards supply of software are not liable to tax in India. Therefore, we hold that payment received by the assessee was not in the nature of Royalty and cannot be therefore brought to tax. - Decided in favour of assessee.
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