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2020 (1) TMI 649 - AT - Income TaxRoyalty receipt - Receipts towards access to use software - India– Netherlands DTAA - whether there is any use or right to use of copyright? - P.E. in India - business income taxed in India - HELD THAT:- As decided in own case [2017 (4) TMI 763 - ITAT MUMBAI] wherein the Tribunal held that the payments received by the assessee from Wipro/IBM in pursuance to the MSA cannot be treated as “royalty” under Article 12(4) of the India– Netherlands DTAA None of the conditions mentioned in section 14 of the ‘Copyright Act’ is applicable as held by the learned CIT(A); and is also is evident from the terms of MSA, because no such rights has been given by the assessee to the IT Service providers. Further by making use or having access to the computer programs embedded in the software, it cannot be held that either WIPRO/IBM are using the process that has gone into the software or that they have acquired any rights in relation to the process as such. The software continues to be owned by the assessee and what WIPRO/IBM is getting mere access to the software. The source code embedded in the software has not been imparted to them. Hence, there is no use or right to use of any process as held by the learned AO. Hence, the finding of the learned CIT(A) that the payment in question cannot be reckoned as “royalty” is factually and legally correct and the same is upheld. For all the years the payments received by the assessee from WIPRO/IBM in pursuance to the MSA cannot be treated as “royalty” under Article 12(4) of the India-Netherland DTAA. Thus, the matter is decided in favour of the assessee and against the revenue
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