Assessee, a US based company, was engaged in the business of developing and marketing 3D mechanical design solutions. It entered into software distribution agreements with resellers in India, who bought shrink wrapped software from the Assessee and in turn sold to customers in India. During the relevant AY, Assessee received a certain amount on account of sale of software solutions which had not been offered for taxation. AO treated the said receipts as royalty and taxed it at the rate of 15% as per the DTAA. It was held that the issue was squarely covered in favour of the Assessee by the Supreme Court ruling in Engineering Analysis Centre of Excellence (P.) Ltd. v. CIT [2021] 125 taxmann.com 42/281 Taxman 19/432 ITR 471 (SC) wherein it was held that amounts paid by resident Indian end-users/distributors to non-resident computer software manufacturers/suppliers, as consideration for resale/use of computer software through EULAs/distribution agreements, is not payment of royalty for use of copyright in computer software. Accordingly, the AO was directed to delete the impugned addition. (AY.2021-22)