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2012 (10) TMI 980 - AT - Income TaxTreatment of receipts from Indian customers as Royalty - payments received on sale and marketing of software license to the customers - DTAA between India and Ireland - Held that:- As decided in the case of Samsung Electronics Co. Ltd. & Others ( 2011 (10) TMI 195 - KARNATAKA HIGH COURT) and its decision therein, that payments to non-resident software supplies for purchase of shrink-wrapped software was in the nature of royalty - Decided against assessee. Levy of interest u/s. 234A - Held that:- No doubt, if the person (payer) who had to make payments to the non-resident had defaulted in deducting the tax at source from such payments, the non-resident is not absolved from payment of taxes thereupon. However, in such a case, the non-resident is liable to pay tax and the question of payment of advance tax would not arise. This would be clear from the reading of s. 191 along with s. 209(1)(d). For this reason, it would not be permissible for the Revenue to charge any interest under s. 234B. Levy of interest u/s. 234B of the Act cannot be sustained. Ground raised by the assessee is accordingly allowed.
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