Dismissing the appeal of the Revenue, the Court in CIT (IT) v. ZTE Corporation (2021) 130 taxmann.com 128 (Delhi) (HC) held that supply of software was embedded in supply of telecom equipment resulting in sale of copyrighted article, the said transaction was to be treated in nature of supply of articles or goods and thus, payment made towards supply of software was not taxable in India as royalty. SLP was dismissed. Review petition against SLP is dismissed. (AY. 2013-14)
CIT (IT) v. ZTE Corporation (2024) 296 Taxman 571 (SC) Editorial : Refer, CIT (IT) v. ZTE Corporation (2021) 282 Taxman 304 (SC)
S. 9(1)(vi) : Income deemed to accrue or arise in India-Royalty-Sale of telecom equipment’s. i.e. mobile handsets-Supply of articles or goods-Not taxable as royalty-Review petition against SLP is dismissed-DTAA-India-China. [S. 9(1)(i), Art, 12]