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2021 (2) TMI 537 - AT - Income TaxIncome accrue or arise, or deemed to accrue or arise in India - Treating the consideration received for sale of software products as Royalty and taxable in the hands of assessee in India - DTAA between India and the USA - resellers have been given a license by the assessee for consideration to commercially exploit such license at their end - HELD THAT:- On an examination of distributors agreement held the distributors, except for passing over the assessee products as acquired by them from the assessee, do not acquire any right or title in the intellectual property used in the software which always remains with the assessee and at no stage the right to use the copyright in the software is licensed either to the distributor or the reseller. Thereby this Tribunal held the income earned by the assessee from sale of software, either directly to the customers in India or through distributors or resellers constitutes its business income and not the Royalty income and as such business income is not taxable in India as the assessee did not have any Permanent Establishment in India as decided in [2021 (2) TMI 508 - ITAT PUNE] Thus we hold the sale consideration received for sale of software products from the end users, distributors or resellers is business income and not Royalty income and as such it is not taxable in India. Thus, the final assessment order passed by the AO is set aside and ground raised by the assessee is allowed.
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