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2011 (9) TMI 207 - AT - Income TaxWithholding tax u/s 195 - Royalty u/s 9(1)(iv) - right to use the licensed version of the software - Disallowance u/s 40(a)(i) for non deduction of TDS - CIT(A) observed that:- when the payer has a bona fide belief that the income is not chargeable to tax at all, there is no application of the section 195 at all and there is no liability on the payer to follow its provisions when making payment to non-residents. As a consequence, all the proceedings as a result of non-compliance thereof would be otiose. - In view of the above factual position and legal authorities, the payments cannot be treated as royalty u/s 9(1)(vi) of the Act. - Held that:- In the instant case, the assessee sold copy righted software and not copyright in the software. - Order of CIT(A) upheld - decided in favor of assessee.
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