Commissioner (Appeals) accepted the contention of the assessee that software was a copyrighted article, he still held that the payments received by the assessee for use of its software products were in the nature of royalty on the grounds that payment for use of software was for use or right to use secret formula or process, and that payment for use of software was for industrial or commercial knowledge of the assessee. The Tribunal held that the receipts were not royalty, and the Assessing Officer was directed to delete the addition. (AY. 2016-17)
GSX SARL v. ACIT (IT) (2022)96 ITR 69 (SN) (Delhi)(Trib)
S. 9(1)(vi) : Income deemed to accrue or arise in India-Royalty-Software user fee-Selling standard software and not providing any licence to reproduce or make copies-Customers having only use of Copyrighted Article and no rights therein-Payments are not royalty-Not liable to deduct tax at source. [S. 9(1)(i), 195]