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2015 (5) TMI 779 - AT - Income TaxTreatment of receipts from Indian customers as Royalty - payments received on sale and marketing of software license to the customers - DTAA between India and Ireland - Held that:- As decided in the case of Samsung Electronics Co. Ltd. & Others ( 2011 (10) TMI 195 - KARNATAKA HIGH COURT) and its decision therein, that payments to non-resident software supplies for purchase of shrink-wrapped software was in the nature of royalty, was followed by the coordinate bench of this Tribunal in the assessee’s own case for A.Y 2006-07 [2012 (10) TMI 980 - ITAT BANGALORE]. Consequently, the assessee was under obligation to deduct tax at source under section 195 of the Act form the amount paid to foreign software suppliers. - Decided against assessee. Interest under section 234B - Held that:- No doubt, if the person (payer) who had to make payments to the non-resident had defaulted in deducting the tax at source from such payments, the non-resident is not absolved from payment of taxes thereupon. However, in such a case, the non-resident is liable to pay tax and the question of payment of advance tax would not arise. This would be clear from the reading of s. 191 along with s. 209(1)(d). For this reason, it would not be permissible for the Revenue to charge any interest under s. 234BLevy of interest u/s. 234B of the Act cannot be sustained. Ground raised by the assessee is accordingly allowed. The aforesaid decision of the co-ordinate bench was followed by another co-ordinate bench of this Tribunal in the assessee's own case for Assessment Year 2007-08 - Decided in favour of assessee.
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