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2021 (4) TMI 916 - AT - Income TaxIncome accrued in India - payments received by the assessee from its Indian customers in respect of licenses granted for use of copy righted computer software as royalty u/s 9(1)(vi) - India – Singapore DTAA - HELD THAT:- As payments received on sale of software licenses are not in the nature of royalty, as the distribution agreements/EULAs in the facts of these cases do not create any interest or right in such distributors/end-users, which would amount to the use of or right to use any copyright under 12AA of India – Singapore DTAA. A.R submitted that the DTAA entered by India with Australia also contains similar provisions. Accordingly, following the decision rendered by Hon’ble Supreme Court in ENGINEERING ANALYSIS CENTRE OF EXCELLENCE PRIVATE LIMITED VERSUS THE COMMISSIONER OF INCOME TAX & ANR. [2021 (3) TMI 138 - SUPREME COURT] we hold that the payments received by the assessee on sale of software licenses in India are not in the nature of “Royalty” as per the provisions of DTAA. As observed by Hon’ble Supreme Court in the above cited case, there is no requirement to apply provisions of sec. 9(1)(vi) of the Act - We set aside the orders passed by Ld. CIT(A) on this issue in both the years and direct the A.O. to delete the income assessed as royalty in respect of sale of software licenses in both the years under consideration. Appeals of the assessee are allowed.
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