TMI Blog2023 (9) TMI 1173X X X X Extracts X X X X X X X X Extracts X X X X ..... rest in any such rights so as to attract section 30 of the Copyright Act. Thus decided the issue in favour of the taxpayer and laid down that the payments made by resident Indian end-users/distributors to non-resident computer software manufacture/suppliers as consideration for use/resale of shrink-wrapped software does not amount to payment for royalty for the use of copyright in the computer software considering the definition of royalty under the DTAAs. In the present case what is sold is the copyrighted software which is shrink-wrapped.To our minds, the consideration received on the sale of off-the-shelf, shrink-wrapped software to Indian distributors and resellers would not constitute royalty in terms of the India-UK Double Ta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . v. CIT, [2021] 432 ITR 471 of the Supreme Court. 9. The findings of the fact returned by the Tribunal were in the background of the following facts: 4. Facts relevant to the adjudication of the case are that the assessee was incorporated under the laws of United Kingdom ('UK') on June 29, 1992 with the primary objective of carrying on the business of specialists, engineers and dealers in computer systems. AY 2003-04, the Appellant filed its return of income on March 22, 2005 wherein revenue classified as fees for technical services amounting to Rs. 741,538,511 was offered to tax. 5. The Appellant has contracts with Indian customers such as Bharti, Ericsson and Motorola for licensing of software products and is rend ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o the aforesaid facts, returned the following findings having regard to law enunciated in the judgment of the Supreme Court rendered in the Engineering Analysis: 18, The Hon'ble Apex Court held that a non-exclusive, non-transferable license, merely enabling the use of a copyrighted product, is in the nature of restrictive conditions which are ancillary to such use, and cannot be construed as a licence to enjoy all or any of the enumerated rights mentioned in section 14 of the Copyright Act, or create any interest in any such rights so as to attract section 30 of the Copyright Act. 19. The right to reproduce and the right to use computer software are distinct and separate rights, the former amounting to parting with copyright ..... X X X X Extracts X X X X X X X X Extracts X X X X
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