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TMI Blog2024 (7) TMI 512X X X X Extracts X X X X X X X X Extracts X X X X ..... f law:- "Whether the payments made by the respondent for obtaining computer software were liable to be taxed in India as royalties under the provisions of Section 9 (1) (vi) of the Income Tax Act, 1961 ?" 2. We are also pointed out that some of the appeals have already been admitted on the above question of law, which is a matter of record and the other appeals are yet to be admitted albeit the question of law raised by the revenue is identical. 3. Be that as it may, in the facts and circumstances of the present case, we have taken up all these matters for hearing. 4. Learned counsel for the parties have fairly pointed out that such question of law had fell for consideration of this Court in Income Tax Appeal No. 1655 of 2018 which ca ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be taxed as "royalty", under the provisions of Section 9 (1) (vi) of the Act. Such application of the assessee was rejected by an order dated 14th September, 2003 passed by the Deputy Director of Income Tax (International Tax). The assessee carried the matter in appeal before the CIT(A). The appeals filed by the assessee were allowed by the CIT(A), against which at the behest of the Revenue the proceedings reached the Tribunal. 5. In assailing the orders passed by the Tribunal the Revenue has urged the following substantial question of law which we have reframed:- "Whether the payments made by the assessee for obtaining computer software were liable to be to taxed in India as royalties under the provisions of Section 9 (1) (vi) of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Act, to the transaction between the parties, held that the transaction involved copyright, which attracted the payment of royalty and accordingly, tax was required to be deducted at source by the Indian importer. Since this was not done, it was held that the assessee was liable to make good the payment of TDS which it had not deducted. Also interest under Section 201 (1)(A) of the Act was levied. The Appeal before the Commissioner was also dismissed. 9. In these circumstances, the proceedings had reached the Tribunal at the instance of the assessee. The assessee succeeded in these proceedings, with the ITAT setting aside the concurrent findings of both the authorities below. On such backdrop, the proceedings reached the High Court. 1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... i) of the Act along with Explanation 2 and 4 thereof which dealt with royalty, not being more beneficial to the assessee, had no application in the facts of the case. It would be appropriate to extract the conclusion as rendered by the Supreme Court in which reads thus:- "168. Given the definition of royalties contained in Article 12 of the DTAAs mentioned in paragraph 41 of this judgment, it is clear that there is no obligation on the persons mentioned in section 195 of the Income-tax Act to deduct tax at source, as the distribution agreements/EULAs in the facts of these cases do not create any interest or right in such distributors/end-users, which would amount to the use of or right to use any copyright. The provisions contained in th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... whose residents the transactions were entered into by the assessee. 12. In the aforesaid circumstances, it is clear that the approach of the Assessing Officer in the present case was against the correct position in law as held by the Tribunal, and now also endorsed by the Supreme Court in Engineering Analysis Centre of Excellence (P.) Ltd (supra). In this view of the matter, we are in agreement with Mr. Madhur Agarwal that these four Appeals would not give rise to the question of law as noted by us hereinabove. 13. As fairly pointed out by the learned Counsel for the parties, as the facts are not in dispute as also the DTAA in question applicable we are not discussing the facts involved in each of these Appeals. 14. The Appeals ar ..... X X X X Extracts X X X X X X X X Extracts X X X X
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