Assessee-company had made certain payments to foreign company for rendering internet private line services and such services were rendered through an equipment in USA and India via internet. Assessing Officer had considered said payments as royalty under section 9(1)(vi)/9(1)(vii) read with article 12 and disallowed said payment for non-deduction of TDS under section 195. On appeal the Tribunal held that   definition of royalty, before insertion of Explanation 4 by Finance Act, 2012 with retrospective effect from 1-4-1976 does not cover payment made to non-resident for rendering services outside India and also receipt of services outside India. Since said payment was made prior to amendment in definition of royalty and further, at time of payment made by assessee to non-residents, there was an ambiguity in definition of royalty and due to this assessee could not deduct TDS as per provisions of section 195, Assessing Officer erred in making addition for non-deduction of TDS under section 195  of the Act.  (AY. 2012-13)