Dismissing the appeal of the revenue the Court held that, Developed basic engine and sent same to a non-resident company of Austria to design a new 3-valve cylinder head for improvement of fuel efficiency, performance and meeting Indian emission standard, payment made to Austrian company would not constitute royalty . (CIT v Voest Alpine A.G. ( 2015) 55 taxmann.com 489 ( Delhi) (HC) is distinguished )( AY.2002-03)
DIT v. TVS Motors Co. Ltd. (2018) 259 Taxman 140/ (2019) 176 DTR 137 / 417 ITR 607/ 308 CTR 143 (Mad)(HC)
S. 9(1)(vi) : Income deemed to accrue or arise in India – Royalty – Fees for technical services – Developed basic engine and sent same to a non-resident company of Austria to design a new 3-valve cylinder head for improvement of fuel efficiency, performance and meeting Indian emission standard, payment made to Austrian company would not constitute royalty- DTAA-India –Austria. [Art. 6(2), 12]