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2013 (8) TMI 1013 - ITAT RAJKOTTDS u/s 194I or 194J - royalty payment - Held that:- We have perused the definition of royalty as given in Explanation 2 to clause (vi) of section 9(1) and find that the scope of royalty is limited to consideration paid for transfer of certain rights in respect of, e.g., patent, invention, model, design, secret formula or process or trade mark or similar property, etc. The impugned sum paid by the assessee does not fall under any of the clauses of Explanation 2 to clause (vi) of sub-section (1) of section 9. As stated earlier, the ld. Authorised Representative for the assessee also could not establish as to how the impugned payments made by the assessee fell under Explanation 2 to clause (vi) of sub-section (1) of section 194J. In this view of the matter, it is held that there was no basis with the assessee for deducting tax at source u/s 194J. The ld. CIT(A) has rightly held that the assessee was required to deduct tax at source u/s 194I. Non/short-deduction of tax at source u/s 194I - Held that:- The assessee shall not be treated as assessee in default in case the AO is satisfied, after due verification, that the conditions stipulated by the first proviso to sub-section (1) of section 201 have been fulfilled by the assessee but in that situation also the assessee shall be liable to pay interest u/s 201(1A) at the prescribed rate from the date on which such tax was deductible u/s 194I to the date of furnishing of return of income by the payee. All grounds of appeal taken by the assessee in both appeals, except Ground No.1.1 taken by the assessee in both the appeals, and the issues raised in the appeals filed by the Revenue thus stand restored to the file of the AO for passing a fresh order as per directions earlier given by us.
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