DCIT-CIRCLE 1(3)(1), MUMBAI vs. DIEBOLD INDIA PRIVATE LIMITED, MUMBAI

ITA 5505/MUM/2025Status: DisposedITAT Mumbai09 March 2026AY 2010-111 pages
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What did the Tribunal hold?

The Tribunal, following the Supreme Court's decision in Engineering Analysis Centre of Excellence Pvt. Ltd. vs. CIT, held that the payments for software under End User License Agreements (EULAs) do not constitute royalty. Consequently, the assessee was not liable to deduct TDS on these payments.

What were the facts?

The Revenue appealed against the deletion of disallowance made under section 40(a)(i) for payments made by the assessee for software purchases. The assessee contended that these payments did not constitute 'royalty' and therefore, tax deduction at source under section 195 was not required.

What were the issues?

Whether payments for software under EULAs are 'royalty' and subject to TDS under Section 195 of the Income Tax Act, considering the India-USA DTAA.

Which sections of the Income-tax Act were involved?

Section 40(a)(i),Section 195,Section 9(1)(vi)

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IN THE INCOME TAX APPELLATE TRIBUNAL “I” BENCH, MUMBAI BEFORE SHRI SANDEEP GOSAIN, JUDICIAL MEMBER & SHRI PRABHASH SHANKAR, ACCOUNTANT MEMBER Ι.Τ.Α. Νο. 5505/Mum/2025 Α.Υ: 2010-11 with Ι.Τ.Α. Νο. 5506/Mum/2025 A.Y: 2011-12 with Ι.Τ.Α. Νο. 5507/Mum/2025 Α.Υ: 2012-13 with Ι.Τ.Α. Νο. 5508/Mum/2025 DCIT- Circle 1(3)(1) A.Y: 2013-14 Room No. 540, 5th Floor, Aayakar Bhavan, Maharshi Karve Road, Mumbai-400020 Vs Diebold India Private Limited Rolta Tower-1, 5th Floor, Plot No. 39, Central Road, MIDC, Marol, Andheri(E), Mumbai-400093 PAN – AABCD633ΟΝ (Appellant) (Respondent) CO. No. 308/Mum/2025 (Arising out of ITA No. 5505/Mum/2025) Α.Υ: 2010-11 with CO. No. 309/Mum/2025 (Arising out of ITA No. 5506/Mum/2025) A.Y: 2011-12 with CO. No. 310/Mum/2025 (Arising out of ITA No. 5507/Mum/2025) A.Y: 2012-13 with CO. No. 311/Mum/2025 (Arising out of ITA No. 5508/Mum/2025) A.Y: 2013-14 Diebold India Private Limited Diebold India Private Limited Rolta Tower-1, 5th Floor, Plot No. 39, Central Road, MIDC, Marol, Andheri(E), Mumbai-400093 PAN – AABCD6330N (Appellant)

Vs DCIT- Circle 1(3)(1)

Room No. 540, 5th Floor, Aayakar Bhavan, Maharshi Karve Road, Mumbai-400020. (Respondent)

Assessee by Shri Nishant

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