Search Results For: royalty


COURT:
CORAM: ,
SECTION(S):
GENRE:
CATCH WORDS: ,
COUNSEL:
DATE: February 29, 2016 (Date of pronouncement)
DATE: March 7, 2016 (Date of publication)
AY: 2007-08
FILE: Click here to view full post with file download link
CITATION:
Entire law on whether consideration for user of software is assessable as "royalty" in the light of the different definitions in s. 9(1)(vi) and Article 12 of the DTAA and the conflicting judgements of various High Courts explained

A comparison of the definition of ‘royalty’ as provided under the DTAA (as reproduced above) with the definition of ‘royalty’ as provided under Income Tax Act shows that the same are not at para materia with each other.The definition provided under the DTAA is the very short and restrictive definition, whereas, the definition of the royalty as provided under the Income Tax Act is a very wide and inclusive but vague. A careful reading of the relevant provision under the DTAA and under the Income Tax Act reveals that the DTAA covers only a part of the items mentioned under sub clause (i) to (v)to Explanation 2 to section 9(1)(vi). We may mention here that the section9(1)(vi) having sub clauses (a), (b), & (c) is very vast to cover consideration paid for any right, property or information used or services utilized for the purpose of business or profession. Further, we find that in the said sub clauses(a), (b) & (c) of section 9(1) (vi), the wording is somewhat vague and negatively written.

COURT:
CORAM: ,
SECTION(S): , ,
GENRE:
CATCH WORDS: , ,
COUNSEL: , ,
DATE: February 8, 2016 (Date of pronouncement)
DATE: February 12, 2016 (Date of publication)
AY: -
FILE: Click here to view full post with file download link
CITATION:
S. 9(1)(vi) vs. Article 12 of DTAA: The retrospective amendment to s. 9(1)(vi) so as to supersede the law laid down in Asia Satellite 332 ITR 340 (Del) and assess transmission fees as “royalty” has no impact on assessees covered by DTAA because a corresponding amendment has not been made to the definition of “royalty” therein. Amendments to domestic law do not affect the DTAA

This Court is of the view that no amendment to the Act, whether retrospective or prospective can be read in a manner so as to extend in operation to the terms of an international treaty. In other words, a clarificatory or declaratory amendment, much less one which may seek to overcome an unwelcome judicial interpretation of law, cannot be allowed to have the same retroactive effect on an international instrument effected between two sovereign states prior to such amendment. In the context of international law, while not every attempt to subvert the obligations under the treaty is a breach, it is nevertheless a failure to give effect to the intended trajectory of the treaty. Employing interpretive amendments in domestic law as a means to imply contoured effects in the enforcement of treaties is one such attempt, which falls just short of a breach, but is nevertheless, in the opinion of this Court, indefensible

COURT:
CORAM: ,
SECTION(S):
GENRE: ,
CATCH WORDS: ,
COUNSEL:
DATE: January 19, 2016 (Date of pronouncement)
DATE: January 25, 2016 (Date of publication)
AY: 2008-09
FILE: Click here to view full post with file download link
CITATION:
S. 9(1)(vi): While consideration paid to acquire the right to use software is assessable as "royalty", payments made for purchase of software as a product is not for use or the right to use the software and is not assessable as "royalty"

In the cases where an Assessee acquires the right to use a software the payment so made would amount to royalty. However in cases where the payments are made for purchase of software as a product, the consideration paid cannot be considered to be for use or the right to use the software. It is well settled that where software is sold as a product it would amount to sale of goods. In the case of Tata Consultancy Services v. State of Andhra Pradesh (2004) 271 ITR 401 (SC), the Supreme Court examined the transactions relating to the purchase and sale of software recorded on a CD in the context of the Andhra Pradesh General Sales Tax Act. The court held the same to be goods within the meaning of Section 2(b) of the said Act and consequently exigible to sales tax under the said Act. Clearly, the consideration paid for purchase of goods cannot be considered as ‘royalty’. Thus, it is necessary to make a distinction between the cases where consideration is paid to acquire the right to use a patent or a copyright and cases where payment is made to acquire patented or a copyrighted product/ material. In cases where payments are made to acquire products which are patented or copyrighted, the consideration paid would have to be treated as a payment for purchase of the product rather than consideration for use of the patent or copyright

COURT:
CORAM: ,
SECTION(S): ,
GENRE:
CATCH WORDS: ,
COUNSEL:
DATE: May 18, 2015 (Date of pronouncement)
DATE: May 27, 2015 (Date of publication)
AY: 2004-05, 2010-11
FILE: Click here to view full post with file download link
CITATION:
Consideration for supply of software (whether with or without equipment) is not taxable as "royalty" if there is no transfer of right in the copyright to the software

There was no transfer of any right in respect of copyright by the assessee and it was a case of mere transfer of a copyrighted article. The payment is for a copyrighted article and represents the purchase price of an article. Hence, the payment for the same is not in the nature of royalty under Article 12 of the Tax Treaty. The receipts would constitute business receipts in the hands of the Assessee and is to be assessed as business income subject to assessee having business connection/ PE in India

COURT:
CORAM: ,
SECTION(S):
GENRE:
CATCH WORDS: , ,
COUNSEL:
DATE: November 18, 2014 (Date of pronouncement)
DATE: December 2, 2014 (Date of publication)
AY: 2007-08, 2009-10
FILE: Click here to view full post with file download link
CITATION:
S. 9(1)(vi): Broadcast or live coverage does not have a "copyright" & is consequently not assessable as "royalty" for purposes of TDS

(i) A live T.V coverage of any event is a communication of visual images to the public and would fall within the definition of the word “broadcast” in Section 2(dd). That apart we note that Section 13 does not contemplate …

CIT vs. Delhi Race Club (Delhi High Court) Read More »

COURT:
CORAM: ,
SECTION(S): ,
GENRE:
CATCH WORDS: ,
COUNSEL:
DATE: January 27, 2014 (Date of pronouncement)
DATE: November 29, 2014 (Date of publication)
AY: 2009-10
FILE: Click here to view full post with file download link
CITATION:
Consideration for use of software is not assessable as royalty under Article 12 of DTAA and s. 9(1)(vi)

(i) In order to qualify as royalty payment, it is necessary to establish that there is transfer of all or any rights (including the granting of any licence) in respect of copyright of a literary, artistic or scientific work. In …

ADIT vs. Bartronics India Ltd (ITAT Hyderabad) Read More »

COURT:
CORAM: ,
SECTION(S): , ,
GENRE: ,
CATCH WORDS: ,
COUNSEL:
DATE: October 21, 2014 (Date of pronouncement)
DATE: October 24, 2014 (Date of publication)
AY: 2006-07
FILE: Click here to view full post with file download link
CITATION:
charter hire payment is not assessable as royalty, there is no obligation to deduct TDS and no disallowance u/s 40(a)(i) can be made

It is very clear that the payments made by the assessee company were in the nature of simple payments for chartering ships on hire for doing the business outside India. Therefore, the payments do not satisfy the test laid down …

Mathewsons Exports & Imports vs. ACIT (ITAT Cochin) Read More »