Dismissing the appeal of the revenue the Court held that the payment had been made by the assessee for an outright purchase of intellectual property rights and not towards royalty. Depreciation is not an expenditure hence No disallowance can be made for failure to deduct tax at source. (AY. 2009-10 to 2011-12)
PCIT v. Tally Solutions Pvt. Ltd. (2021) 430 ITR 527 (Karn.)(HC)
S. 40(a)(i) : Amounts not deductible-Deduction at source-Non-resident-Purchase of intellectual property-Depreciation is not an expenditure-No disallowance can be made for failure to deduct tax at source . [S. 32, 37(1), 40(a)(ia)]