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2013 (11) TMI 118 - AT - Income TaxIncome from royalty - Fees for technical services – Accounting method - Whether income from royalty and fee for technical services are to be taxed on receipt basis or accrual basis - the assessee has been consistently following the accrual basis method and the Tribunal has upheld the contentions of the assessee in various orders from the assessment years 1990-91 to 2003-04. Supply of software – Royalty - Held that:- Following Director of Income-tax v. Ericsson A. B. [2011 (12) TMI 91 - Delhi High Court] - the consideration received by the assessee for software was not royalty. The receipts would constitute business receipts in the hands of the assesse – the assessee who is a non-resident does not have a permanent establishment and therefore business income of the assessee cannot be taxed in India in the absence of a permanent establishment - the amount received by the assessee towards supply of software cannot be segregated from the supply of equipment and hence that portion cannot be considered as 'royalty' – Decided against Revenue.
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