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2021 (8) TMI 1369 - AT - Income TaxIncome deemed to accrue or arise in India - receipt from Indian customer towards sale of software would constitute royalty within the meaning of section 9(1)(vi) of the Income-tax Act and Article 12 of the DTAA between India and USA - whether the receipts from Indian customers towards annual maintenance service, implementation and consultancy services can be brought to tax as fees for technical services? - HELD THAT:- Issue in question is squarely covered in favour of the assessee by the judgment of Engineering Analysis Centre of Excellence P.Ltd. [2021 (3) TMI 138 - SUPREME COURT] wherein it was categorically held that sale of software would not constitute royalty within the provisions of section 9(1)(vi) of the I.T.Act and Article 12(4)(a) of the DTAA between India and USA. Amounts received towards annual maintenance services, implementation and consultancy services, as stated that when the receipts on account of sale of software itself not included as royalty. Miscellaneous income on the same such as annual maintenance also cannot be brought to tax as fees for technical services. Thus we hold that the payment received by the assessee-company towards sale of software would not constitute royalty and cannot be brought to tax. Miscellaneous receipts on account of sale of software also cannot be brought to tax as fees for technical services. Appeal filed by the assessee is allowed.
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