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“Section 9(1)”

Section References (mined)Section 9Section 9(1)1,741 judgments

The decision most relied on for Section 9(1) is Engineering Analysis Centre of Excellence (P) Ltd. v. CIT (432 ITR 471), cited in 914 judgments on BharatTax.

Leading authorities on Section 9(1)

Engineering Analysis Centre of Excellence (P) Ltd. v. CIT
432 ITR 471 · 2021 · Supreme Court
914
citing judgments

Payments for the supply or use of computer software, where there is no transfer of copyright but only a right to use the copyrighted product, are generally considered business profits and not 'royalty' or 'fees for technical services' under the Income Tax Act, 1961 or relevant DTAAs. This principle also applies to transponder fees, which are not taxable as royalty.

CIT v. Samsung Electronics Ltd.
345 ITR 494 · 2012 · High Court
461
citing judgments

Payments by Indian residents to non-resident foreign software suppliers for software are considered royalty, constituting income deemed to accrue in India under section 9(1)(v), thereby requiring tax deduction at source under section 195.

Ishikawajima Harima Heavy Industries Ltd. v. DIT
288 ITR 408 · 2007 · Supreme Court
394
citing judgments

Income from offshore supply of goods and services is not taxable in India if the entire transaction, including transfer of ownership and payments, occurs outside India.

CIT v. De Beers India Minerals (P.) Ltd.
346 ITR 467 · 2012 · High Court
371
citing judgments

For fees for technical or consultancy services to 'make available' technical knowledge or know-how under a DTAA, the service must transmit such knowledge, allowing the recipient to derive an enduring benefit and utilize it independently in the future.

Asia Satellite Telecommunications Co. Ltd. v. DIT
332 ITR 340 · 2011 · High Court
359
citing judgments

Payments for the use of equipment, such as satellite transponders, do not constitute 'royalty' under Section 9(1)(vi) of the Income-tax Act, 1961, or under applicable tax treaties, especially when there is no transfer of the right to use a process or underlying technology.

DIT v. New Skies Satellite BV
382 ITR 114 · 2016 · High Court
325
citing judgments

An amendment to the Income Tax Act, such as the Finance Act, 2012 amendment to Section 9(1)(vi) defining royalty, does not automatically override or alter the definition of 'royalty' as provided in a Double Taxation Avoidance Agreement (DTAA) unless the DTAA itself is bilaterally amended. The definition of royalty in a DTAA remains unaffected by unilateral changes to domestic law.

DIT v. Nokia Networks OY
358 ITR 259 · 2013 · High Court
276
citing judgments

Payments for the supply of software along with telecom equipment are not in the nature of royalty if they are for the use of a copyrighted article, not the copyright itself. Such payments are not taxable in India in the absence of a Permanent Establishment (PE).

CIT v. Toshoku Ltd.
125 ITR 525 · 1980 · Supreme Court
270
citing judgments

A non-resident commission agent is not chargeable to tax in India on commission income if no business operations are carried out in India. Consequently, no TDS is required under Section 195 on such payments.

Judgments citing Section 9(1)

DCIT, Cir 16(2), Mumbai vs. M/S Kpmg Assurance and Consulting Services LLP, Mumbai

ITA 2277/MUM/2023[2017-18]Status: DisposedITAT Mumbai12 Aug 2024AY 2017-18

paid to non resident under Section 195 of the Act as the same were chargeable to tax in India in terms of Section 9(1)(vii) of the Act read with either Article 12 or Article 22/23 of the corresponding DTAAs as FTS or Other Income, respectively. Since the Assessee ... Table in paragraph 5 above] it was contended that professional fee were not liable to tax in India in terms of Section 9(1)(vii)(b) of the Act for the reason the same were utilized outside India and/or for earning income from source outside India. [Refer to Note

DCIT, Cir 16(2), Mumbai vs. M/S Kpmg Assurance and Consulting Services LLP, Mumbai

ITA 2276/MUM/2023[2016]Status: DisposedITAT Mumbai12 Aug 2024

paid to non- resident under Section 195 of the Act as the same were chargeable to tax in India in terms of Section 9(1)(vii) of the Act read with either Article 12 or Article 22/23 of the corresponding DTAAs as FTS or Other Income, respectively. Since the Assessee ... Table in paragraph 5 above] it was contended that professional fee were not liable to tax in India in terms of Section 9(1)(vii)(b) of the Act for the reason the same were utilized outside India and/or for earning income from source outside India. [Refer to Note

DCIT, Cir 16(2), Mumbai vs. M/S Kpmg Assurance and Consulting Services LLP, Mumbai

ITA 2275/MUM/2023[2015-16]Status: DisposedITAT Mumbai12 Aug 2024AY 2015-16

paid to non- resident under Section 195 of the Act as the same were chargeable to tax in India in terms of Section 9(1)(vii) of the Act read with either Article 12 or Article 22/23 of the corresponding DTAAs as FTS or Other Income, respectively. Since the Assessee ... Table in paragraph 5 above] it was contended that professional fee were not liable to tax in India in terms of Section 9(1)(vii)(b) of the Act for the reason the same were utilized outside India and/or for earning income from source outside India. [Refer to Note

DCIT, Cir 16(2), Mumbai vs. M/S Kpmg Assurance and Consulting Services LLP, Mumbai

Accordingly, Ground No. 5 & 6 raised by the Revenue are dismissed

ITA 2274/MUM/2023[2014-15]Status: DisposedITAT Mumbai12 Aug 2024AY 2014-15

Bench: IN THE INCOME TAX APPELLATE TRIBUNAL "I" BENCH, MUMBAI SHRI PRASHANT MAHARISHI, ACCOUNTANT MEMBER SHRI RAHUL CHAUDHARY (Judicial Member)

paid to non- resident under Section 195 of the Act as the same were chargeable to tax in India in terms of Section 9(1)(vii) of the Act read with either Article 12 or Article 22/23 of the corresponding DTAAs as FTS or Other Income, respectively. Since the Assessee ... Table in paragraph 5 above] it was contended that professional fee were not liable to tax in India in terms of Section 9(1)(vii)(b) of the Act for the reason the same were utilized outside India and/or for earning income from source outside India. [Refer to Note

DCIT, Cir 16(2), Mumbai vs. M/S Kpmg Assurance and Consulting Services LLP, Mumbai

ITA 2273/MUM/2023[2013-14]Status: DisposedITAT Mumbai12 Aug 2024AY 2013-14

paid to non resident under Section 195 of the Act as the same were chargeable to tax in India in terms of Section 9(1)(vii) of the Act read with either Article 12 or Article 22/23 of the corresponding DTAAs as FTS or Other Income, respectively. Since the Assessee ... Table in paragraph 5 above] it was contended that professional fee were not liable to tax in India in terms of Section 9(1)(vii)(b) of the Act for the reason the same were utilized outside India and/or for earning income from source outside India. [Refer to Note

DCIT, Cir 16(2), Mumbai vs. M/S Kpmg Assurance and Consulting Services LLP, Mumbai

ITA 2272/MUM/2023[2012-13]Status: DisposedITAT Mumbai12 Aug 2024AY 2012-13

paid to non- resident under Section 195 of the Act as the same were chargeable to tax in India in terms of Section 9(1)(vii) of the Act read with either Article 12 or Article 22/23 of the corresponding DTAAs as FTS or Other Income, respectively. Since the Assessee ... Table in paragraph 5 above] it was contended that professional fee were not liable to tax in India in terms of Section 9(1)(vii)(b) of the Act for the reason the same were utilized outside India and/or for earning income from source outside India. [Refer to Note

Shriram Finance Limited, Chennai vs. DCIT, Corporate Circle 3(1), Chennai

In the result, the appeal filed by the assessee is partly allowed for statistical purposes

ITA 173/CHNY/2024[2020-2021]Status: DisposedITAT Chennai09 Aug 2024AY 2020-2021

Bench: Shri S.S. Viswanethra Ravi & Shri S.R. Raghunathaआयकर अपील सं./I.T.A. No.173/Chny/2024 िनधा"रण वष"/Assessment Year: 2020-21 Shriram Finance Limited Vs. The Deputy Commissioner Of [Formerly Known As Shriram Transport Income Tax, Finance Company Limited), Corporate Circle 3(1), Sri Towers, Plot No. 14A, South Phase, Chennai. Industrial Estate, Guindy, Chennai 600 017. [Pan: Aaacs7018R] (अपीलाथ"/Appellant) (""थ"/Respondent) अपीलाथ" की ओर से / Appellant By : Shri R. Sivaraman, Advocate ""थ" की ओर से/Respondent By : Shri R.V. Aroon Prasad, Addl. Cit सुनवाई की तारीख/ Date Of Hearing : 25.07.2024 घोषणा की तारीख /Date Of Pronouncement : 09.08.2024 आदेश /O R D E R Per S.S. Viswanethra Ravi: This Appeal Filed By The Assessee Is Directed Against The Order Dated 29.11.2023 Passed By The Ld. Commissioner Of Income Tax (Appeals), National Faceless Appeal Centre [Nfac], Delhi For The Assessment Year 2020-21. 2. Ground No. 1 Is General In Nature & Requires No Adjudication.

For Appellant: Shri R. Sivaraman, AdvocateFor Respondent: Shri R.V. Aroon Prasad, Addl. CIT
Section 14ASection 2

earlier assessment years. 12. In this state of the law, on 27-2-1999 the Finance Bill, 1999 substituted the Explanation to Section 9(1)(ii) (or what has been referred to by us as the 1999 Explanation). Section 5 of the Bill expressly stated that with effect from 1 ... employment, shall be regarded as income earned in India." The Finance Act, 1999 which followed the Bill incorporated the substituted Explanation to Section 9(1)(ii) without any change. 13. The Explanation as introduced in 1983 was construed by the Kerala High Court in CIT v. S.R. Patton

Intas Biopharmaceuticals Ltd., Ahmedabad vs. The Dy.Commissioner of Income Tax, Circle-2(1)(1), Ahmedabad

In the result, appeal preferred by the assessee is allowed in part

ITA 865/AHD/2016[2011-12]Status: DisposedITAT Ahmedabad07 Aug 2024AY 2011-12

Bench: Ms. Suchitra Kamble, Judical Member & Shri Narendra Prasad Sinhaआयकर अपील सं./I.T.A. No. 865/Ahd/2016 (िनधा"रण वष" िनधा"रण वष" / Assessment Year : 2011-12) िनधा"रण वष" िनधा"रण वष" Intas The Dy. Commissioner Of बनाम बनाम/ बनाम बनाम Biopharmaceuticals Ltd. Income Tax Vs. Plot 423/P/A, Sarkhej Circle-2(1)(1), Ahmedabad Bavla Highway, Moraiya, Sanand, Ahmedabad, Gujarat, 382213 "थायी लेखा सं./जीआइआर सं./Pan/Gir No. : Aabci4722M (Appellant) .. (Respondent) Shri Bandish Soparkar & Shri Parin अपीलाथ" ओर से /Appellant By : Shah, Ars. ""यथ" क" ओर से/Respondent By : Dr. Darsi Suman Ratnam, Cit. Dr & Shri Ashish Rajesh Revar, Sr. Dr Date Of Hearing 24/07/2024 Date Of Pronouncement 07/08/2024 O R D E R Per Shri Narendra Prasad Sinha, Am: This Appeal Is Filed By The Assessee Against The Order Of The Commissioner Of Income-Tax (Appeals)-7, Ahmedabad (In Short ‘The Cit(A)’) Dated 20.01.2016 For The Assessment Year 2011-12. Ita No. 865/Ahd/2016 [Intas Biopharmaceuticals Ltd. Vs. Dcit] A.Y. 2011-12 - 2 –

For Appellant: Shah, ARsFor Respondent: Dr. Darsi Suman Ratnam, CIT. DR
Section 143(3)Section 35Section 40

income of the non-residents was in India and, therefore, their income was deemed to be accrued or arisen in India under Section 9(1)(i) of the Act. Accordingly, he rejected the contention of the assessee and disallowed the commission paid to the non-resident under Section

Ernst and Young U.S. LLP, United States vs. ACIT, Circle International Tax 1(2)(2), New Delhi

In the result, the appeal of the assessee is allowed

ITA 3253/DEL/2023[2021-22]Status: DisposedITAT Delhi07 Aug 2024AY 2021-22

Bench: Dr. B. R. R. Kumar, Ms. Madhumita Roy

For Appellant: Sh. S. Ganesh, Sr. Adv. &For Respondent: Sh. Vivek Vardhan, Sr. DR
Section 143(3)Section 144CSection 192

services. Further, even as per Section 9 of the Act, the payment cannot be treated as fees for technical service. Explanation 2 to Section 9(1)(vii) gives the meaning of the expression "fees for technical services" as per which, inter alia, any consideration which would be income

Deputy Commissioner Income Tax, Circle-3(1)(1), Benglauru, Bengaluru vs. Goldman Sachs Services Pvt Ltd, Bengaluru

In the result, the appeal of the assessee is partly allowed for statistical purposes

ITA 1242/BANG/2024[2013-14]Status: DisposedITAT Bangalore06 Aug 2024AY 2013-14

Bench: Shri Chandra Poojari & Shri Keshav Dubey

For Appellant: Sri Sharat Rao, A.RFor Respondent: Ms. Neera Malhotra, D.R
Section 195Section 201(1)Section 40Section 9(1)(vii)

considering ' fact that reimbursements of salary costs to the Es, amounted to payment towards Fee for Technical Services (FTS) under explanation 2 to section 9(1)(vii) of the Act. 4. The CIT(A) erred in not appreciating that the AO has rightly considered the reimbursements paid the assessee ... other personnel" and are in the nature of fees for technical services within the meaning of Explanation 2 to sub clause (vii) of section 9(1) and article 12(4) of the relevant DTAA and are subject to deduction of tax at source under section195. ITA Nos.1241 & 1242/Bang/2024 M/s. Goldman

Deputy Commissioner of Income Tax, Circle-3(1)(1), Bengaluru vs. Goldman Sachs Services Pvt. Ltd, Bengaluru

In the result, the appeal of the assessee is partly allowed for statistical purposes

ITA 1241/BANG/2024[2011-12]Status: DisposedITAT Bangalore06 Aug 2024AY 2011-12

Bench: Shri Chandra Poojari & Shri Keshav Dubey

For Appellant: Sri Sharat Rao, A.RFor Respondent: Ms. Neera Malhotra, D.R
Section 195Section 201(1)Section 40Section 9(1)(vii)

considering ' fact that reimbursements of salary costs to the Es, amounted to payment towards Fee for Technical Services (FTS) under explanation 2 to section 9(1)(vii) of the Act. 4. The CIT(A) erred in not appreciating that the AO has rightly considered the reimbursements paid the assessee ... other personnel" and are in the nature of fees for technical services within the meaning of Explanation 2 to sub clause (vii) of section 9(1) and article 12(4) of the relevant DTAA and are subject to deduction of tax at source under section195. ITA Nos.1241 & 1242/Bang/2024 M/s. Goldman

Dy. Commissioner of Income Tax, Circle-2(2), Hyderabad vs. Hsbc Electronic Data Processing India Private Limited, Hyderabad

In the result, the appeal filed by the Revenue is dismissed

ITA 1632/HYD/2017[2010-11]Status: DisposedITAT Hyderabad05 Aug 2024AY 2010-11

Bench: Shri Laliet Kumar & Shri Madhusudan Sawdia

For Appellant: Shri Rajan Vora, C.AFor Respondent: : Shri Kumar Pranav, CIT-DR
Section 10ASection 115Section 115JSection 251(1)(a)Section 37(1)Section 41(1)

payments which was decision of Karnataka High Court in case of considered as royalty under Samsung Electronics Co Ltd held that the section 9(1)(vi) of the Act. payment for purchase of licensed software was royalty and tax was required to be deducted. Wipro Ltd. (ITA The Assessee company ... same being in the nature constituted royalty or not and whether TDS of royalty as per Explanation was applicable on the same. to section 9(1)(vi) of the Act The dispute in Appellant’s case is whether and no TDS u/s.194 of the the software maintenance expenses paid

Eximcorp India (P) Ltd., Kolkata vs. ACIT, Cir-5(2), Kolkata.

In the result, the appeal of the assessee is dismissed

ITA 702/KOL/2023[2016-17]Status: DisposedITAT Kolkata05 Aug 2024AY 2016-17

Bench: Sri Rajpal Yadav, Vice- & Sri Sanjay Awasthi

Section 115JSection 195Section 195(1)Section 2Section 40

ITAT were reversed. Some portions from the High Court judgement (261 ITR 113- Gujarat) deserve to be extracted: “The provisions of section 9(1)(v)(b), read with section 5(2) and section 4(1)(2) leave no room for doubt that the income payable by way of interest ... price, such interest payable to non-resident would be income deemed to have accrued or arisen to the non- resident in India under section 9(1)(v)(b) and would be chargeable to income- tax under section 4(1), read with section 5(2). If that be so, income

Eximcorp India Private Limited., Kolkata vs. ACIT, Cir-5(2), Kolkata.

In the result, the appeal of the assessee is dismissed

ITA 701/KOL/2023[2015-16]Status: DisposedITAT Kolkata05 Aug 2024AY 2015-16

Bench: Sri Rajpal Yadav, Vice- & Sri Sanjay Awasthi

Section 115JSection 195Section 195(1)Section 2Section 40

ITAT were reversed. Some portions from the High Court judgement (261 ITR 113- Gujarat) deserve to be extracted: “The provisions of section 9(1)(v)(b), read with section 5(2) and section 4(1)(2) leave no room for doubt that the income payable by way of interest ... price, such interest payable to non-resident would be income deemed to have accrued or arisen to the non- resident in India under section 9(1)(v)(b) and would be chargeable to income- tax under section 4(1), read with section 5(2). If that be so, income

Qai India Ltd., New Delhi vs. DCIT, Circle-14(1), New Delhi

In the result, the appeals of the assessee are allowed

ITA 3999/DEL/2017[2012-13]Status: DisposedITAT Delhi05 Aug 2024AY 2012-13

Bench: Dr. B. R. R. Kumar, Ms. Madhumita Roy

For Appellant: Sh. Ved Jain Adv. &For Respondent: Sh. Saurabh Anand, Sr. DR
Section 192Section 195Section 251(1)(a)Section 40Section 9(1)(vii)

expenses paid to QAI Singapore Pte. Ltd. in relation to the services rendered for earning income from overseas ignoring the explicit provision of Section 9(1)(vii)(b) of the Act. 5. On the facts and circumstances of the case, the Ld. CIT(A) has erred both on facts ... earning any income from any source outside India is not subject to tax in India in view of the exception carved in Section 9(1)(vii)(b) of the Act. 3.(i) On the facts and circumstances of the case, the Id. CIT(A) has erred, both on facts

Qai India Ltd., New Delhi vs. DCIT, Circle-14(1), New Delhi

In the result, the appeals of the assessee are allowed

ITA 3998/DEL/2017[2011-12]Status: DisposedITAT Delhi05 Aug 2024AY 2011-12

Bench: Dr. B. R. R. Kumar, Ms. Madhumita Roy

For Appellant: Sh. Ved Jain Adv. &For Respondent: Sh. Saurabh Anand, Sr. DR
Section 192Section 195Section 251(1)(a)Section 40Section 9(1)(vii)

expenses paid to QAI Singapore Pte. Ltd. in relation to the services rendered for earning income from overseas ignoring the explicit provision of Section 9(1)(vii)(b) of the Act. 5. On the facts and circumstances of the case, the Ld. CIT(A) has erred both on facts ... earning any income from any source outside India is not subject to tax in India in view of the exception carved in Section 9(1)(vii)(b) of the Act. 3.(i) On the facts and circumstances of the case, the Id. CIT(A) has erred, both on facts

M/S Longview Tea Co. Ltd., Kolkata vs. DCIT, Cir. -6(1), Kolkata

In the result, the appeal of the assessee is allowed for statistical purposes

ITA 130/KOL/2024[2014-15]Status: DisposedITAT Kolkata02 Aug 2024AY 2014-15

Bench: Shri Rajesh Kumar & Shri Sonjoy Sarma]

Section 143(2)Section 14ASection 250

earlier assessment years. 12. In this state of the law, on 27-2-1999 the Finance Bill, 1999 substituted the Explanation to Section 9(1)(ii) (or what has been referred to by us as the 1999 Explanation). Section 5 of the Bill expressly stated that with effect from 1 ... employment, shall be regarded as income earned in India.” The Finance Act, 1999 which followed the Bill incorporated the substituted Explanation to Section 9(1)(ii) without any change. 6 AY: 2014-15 M/s. Longview Tea Co. Ltd. 13. The Explanation as introduced in 1983 was construed by the Kerala

M/S. Idea Cellular Limited, Indore vs. The DCIT (TDS), Indore

Appeals are allowed

ITA 111/IND/2015[2013-14 (Quarter 4)]Status: DisposedITAT Indore01 Aug 2024

Bench: Shri Vijay Pal Rao & Shri B.M. Biyani

Section 194Section 194HSection 194JSection 201(1)

roaming charges paid by assessee to OTOs as falling within the expression “fee for technical services (FTS)” in terms of Explanation 2 to section 9(1)(vii) or alternatively as “royalty” in terms of Explanation 2 & 6 to section 9(1)(vi) and accordingly held assessee as liable ... Ground No. V to deal both points respectively. 8. The expression “fee for technical services” is defined in Explanation 2 to section 9(1)(vii) as under: “Explanation 2. - For the purposes of this clause, “fees for technical services” means any consideration (including any lump sum consideration) for the rendering

M/S. Idea Cellular Limited, Indore vs. The DCIT (TDS), Indore

Appeals are allowed

ITA 110/IND/2015[2013-14 (for first three quarter)]Status: DisposedITAT Indore01 Aug 2024

Bench: Shri Vijay Pal Rao & Shri B.M. Biyani

Section 194Section 194HSection 194JSection 201(1)

roaming charges paid by assessee to OTOs as falling within the expression “fee for technical services (FTS)” in terms of Explanation 2 to section 9(1)(vii) or alternatively as “royalty” in terms of Explanation 2 & 6 to section 9(1)(vi) and accordingly held assessee as liable ... Ground No. V to deal both points respectively. 8. The expression “fee for technical services” is defined in Explanation 2 to section 9(1)(vii) as under: “Explanation 2. - For the purposes of this clause, “fees for technical services” means any consideration (including any lump sum consideration) for the rendering

M/S. Idea Cellular Limited, Indore vs. The DCIT (TDS), Indore

Appeals are allowed

ITA 109/IND/2015[2012-13]Status: DisposedITAT Indore01 Aug 2024AY 2012-13

Bench: Shri Vijay Pal Rao & Shri B.M. Biyani

Section 194Section 194HSection 194JSection 201(1)

roaming charges paid by assessee to OTOs as falling within the expression “fee for technical services (FTS)” in terms of Explanation 2 to section 9(1)(vii) or alternatively as “royalty” in terms of Explanation 2 & 6 to section 9(1)(vi) and accordingly held assessee as liable ... Ground No. V to deal both points respectively. 8. The expression “fee for technical services” is defined in Explanation 2 to section 9(1)(vii) as under: “Explanation 2. - For the purposes of this clause, “fees for technical services” means any consideration (including any lump sum consideration) for the rendering