2023 (9) TMI 840 - DELHI HIGH COURT

Income deemed to accrue or arise in India - Royalty receipt - consideration received by assessee, i.e., a company incorporated and based in Israel - scope of India-Israel DTAA - Tribunal has taken the view that there was no transfer of copyright in the ‘off the shelf’ sale software; the consideration received thereby could not be construed as royalty and hence was not taxable - HELD THAT:- As a matter of fact, the assertions made in the appeal seem to clearly indicate that even the appellant/revenue accepted that what was sold by the respondent/assessee was ‘off the shelf’ software.

Appellant also attempted to draw our attention to the agreement entered into by the respondent/assessee with Wipro Ltd.It is required to be noted this agreement has not been placed before us. In ground ‘B,’ there is a short extract of the agreement has been set forth which adverts to the fact that the respondent/assessee also extends services in the nature of training to the employees of Wipro Ltd., at their own facility, which is presumably located in Israel or through virtual mode.

These are the aspects, which, even according to Appellant were not raised before the statutory authorities and hence they had no occasion to discuss them.

According to us, the Tribunal was right in concluding, that the consideration received by the respondent/assessee, did not constitute royalty in consonance with the principle enunciated by the Supreme Court in Engineering Analysis [2021 (3) TMI 138 - SUPREME COURT]