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2019 (8) TMI 48 - AT - Income TaxTDS u/s 195 - disallowance of payment made to Aveva Solutions Ltd. UK for copyrighted software products u/s 40(a)(ia) - non-deduction of tax at source as required - HELD THAT:- The issue of non-deduction of TDS at source on payment made to its parent company Aveva Solutions Ltd., England, in light of provisions of section 201(1) and 201(1A) and held that the assessee was not liable to deduct tax at source and also it cannot be treated as assessee in default for the impugned year in respect of payment made for purchase of copyrighted software. Therefore, considering all and in assessee’s owns case [2017 (9) TMI 513 - ITAT MUMBAI] we are of the considered view that payment made by the assessee to its parent company for purchase of copyrighted software to be distributed in India for end users cannot be considered as royalty within the definition of royalty as defined u/s 9(1)(vi) consequently, the assessee is not required to deduct tax at source u/s 195 of the Act and hence, no disallowance could be made u/s 40(a)(ia). Therefore, we direct the Assessing Officer to delete additions made towards disallowance u/s 40(a)(ia) of the Act. Short credit of TDS - HELD THAT:- Assessee submitted that the issue may be setaside to the file of the Assessing Officer to verify the facts to ascertain whether is there any credit for TDS and also to grant credit, therefore, we set-aside the issue to the file of the AO and directed the Assessing Officer to call necessary enquiries in light of evidence filed by the assessee including TDS certificate if, any and grant relief accordingly. Levy of interest u/s 234B and 234C is mandatory and consequential in nature, therefore, we direct the AO to verify the facts in light of provisions of section 234B and compute interest as applicable on the basis of total income computed for the year under consideration. We further direct the Assessing Officer to compute 234C interest on returned income.
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