“ royalty income ”

CIT v. Samsung Electronics Ltd.

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.

345 ITR 494 · 2012 · High Court

461

Asia Satellite Telecommunications Co. Ltd. v. DIT

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.

332 ITR 340 · 2011 · High Court

359

DIT v. New Skies Satellite BV

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.

382 ITR 114 · 2016 · High Court

325

358 ITR 259 · 2013 · High Court

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

276

39 Taxmann.com 88 · 2013 · High Court

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).

DIT v. Infrasoft Ltd.

269

CIT v. Siemens Aktiongesellschaft

Payments for the use of copyrighted software, without the transfer of any rights in the underlying copyright itself, do not constitute 'royalty' under the Income-tax Act or tax treaties. Such payments are often treated as business income, taxable only if a permanent establishment exists.

310 ITR 320 · 2009 · High Court

259

343 ITR 470 · 2012 · High Court

Reimbursements of actual expenses without any profit element are not taxable income. Additionally, mere amendments to the Income-tax Act do not override the provisions of Double Taxation Avoidance Agreements (DTAAs).

DIT v. Ericsson A.B

256

ITA 268/MUM/2018[2013-14]Status: DisposedITAT Mumbai05 Mar 2024AY 2013-14

Payments for the use of copyrighted software or reimbursement of data processing costs do not constitute 'royalty' under Section 9(1)(vi) of the Income-tax Act or Article 12(3) of a DTAA where there is no transfer of copyright or rendering of services that "make available" technical knowledge. This position was later upheld by the Supreme Court.

Judgments citing royalty income

Asian Paints Ltd, Mumbai vs. Asst CIT (Ltu) 2, Mumbai

Appeal is allowed

Bench: Shri Prashant Maharishi & Shri Sandeep Singh Karhailasian Paints Ltd. Asian Paints House

For Appellant: Shri Madhur AgrawalFor Respondent: Shri Vachashpati Tripathi

Section 10(34)Section 142(1)Section 143(2)Section 143(3)Section 144C(3)Section 14ASection 250

IN THE INCOME TAX APPELLATE TRIBUNAL “K” BENCH, MUMBAI BEFORE SHRI PRASHANT MAHARISHI, ACCOUNTANT MEMBER AND SHRI SANDEEP SINGH KARHAIL

Amadeus It Group Sa, Spain vs. ACIT, New Delhi

In the result, the appeal of the assessee is allowed

ITA 3175/DEL/2023[2021-22]Status: DisposedITAT Delhi05 Mar 2024AY 2021-22

Bench: Sh. Kul Bharatdr. B. R. R. Kumar

For Appellant: Sh. Neeraj Jain, AdvFor Respondent: Sh. Vizay B.Vasanta, CIT-DR

assessing officer, having held the appellant to have permanent establishment in India, erred on facts and in law in bringing to tax the alleged ‘royalty’ income on gross basis, without appreciating that in terms of section 44DA of the Act and Article 13(5) of the Treaty, royalty income effectively

DCIT (Ltu) 2, Mumbai vs. Asian Paints Ltd, Mumbai

Appeal is partly allowed

ITA 5934/MUM/2017[2012-13]Status: DisposedITAT Mumbai01 Mar 2024AY 2012-13

Bench: Shri Prashant Maharishi & Shri Sandeep Singh Karhail

For Appellant: Shri Madhur AgrawalFor Respondent: Shri Vachashpati Tripathi

Section 10Section 142(1)Section 143(2)Section 143(3)Section 144C(3)Section 14ASection 250

IN THE INCOME TAX APPELLATE TRIBUNAL “K” BENCH, MUMBAI BEFORE SHRI PRASHANT MAHARISHI, ACCOUNTANT MEMBER AND SHRI SANDEEP SINGH KARHAIL

Asian Paints Ltd, Mumbai vs. Asst CIT Ltu, Mumbai

Appeal is partly allowed

ITA 5363/MUM/2017[2012-13]Status: DisposedITAT Mumbai01 Mar 2024AY 2012-13

Bench: Us.

Section 10Section 142(1)Section 143(2)Section 143(3)Section 144C(3)Section 14A

ASIAN PAINTS LTD. ITA NO.5363/MUM./2017 ITA NO.5934/MUM./2017 ("the Act") by the learned Commissioner of Income Tax (Appeals)-55

Appdynamics International Limited, Noida vs. ACIT Intl Taxation Circle 1(1)(1), New Delhi

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

ITA 2413/DEL/2023[2020-21]Status: DisposedITAT Delhi29 Feb 2024AY 2020-21

Bench: Shri Saktijit Dey- & Shri Pradip Kumar Kedia-

For Appellant: Shri Nageshwar Rao, AdvocateFor Respondent: Shri Vizay B. Vasanta, CIT-DR

Section 143(3)Section 144CSection 144C(13)Section 144C(5)

directions are bad in law, unlawful and illegal as same wrongly assume estopple in law to treat all amounts reflected in form 26AS as Royalty income contrary to provisions of Income Tax Act, relevant Double taxation avoidance agreement, CBDT circular and authentic decisions of Hon'ble Supreme Court. B. Grounds ... customers in India which is stated to be sale proceeds of off-the- shelf software. Such receipts were offered to tax in India as ‘Royalty Income’ while filing its return of income. The customers in India while I.T.A. No.2413/Del/2023 3 remitting the sale proceeds to the non-resident assessee deducted

Saic Motor Overseas Intelligent Mobility Technology Co . Ltd., Shanghai vs. Assistant Commissioner of Income Tax, International Taxation, Hsiidc Building

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

ITA 2194/DEL/2023[2020-21]Status: DisposedITAT Delhi23 Feb 2024AY 2020-21

Bench: Shri Shamim Yahya & Ms. Astha Chandraasstt. Year: 2020-21

For Appellant: Shri Ajay Vohra, Sr. AdvocateFor Respondent: Shri Vizay B. Vasanta, CIT-DR

Section 115ASection 143(3)Section 144CSection 144C(13)Section 234ASection 234BSection 270ASection 9(1)(vi)

proceedings a show cause notice dated 14.03.2022 was issued to the assessee asking to explain why the above receipts may not be treated as royalty income. The assessee filed its response on 17.03.2022 and 21.04.2022 and contended before the Ld. Assessing Officer (“AO”) that: i) the assessee has not transferred ... requested to keep them open. 8. We shall now proceed to deal with ground No. 4 and 4.1 relating to royalty income. 9. The Ld. AR submitted that the Ld. AO treated the supply of software as royalty for use of Industrial, commercial, scientific experience alleging that

ACIT, Circle-3(1)(2), International Taxation, New Delhi vs. Sheraton Overseas Management Corporation, Noida

In the result, appeal of the Revenue is dismissed

ITA 2392/DEL/2023[2021-22]Status: DisposedITAT Delhi13 Feb 2024AY 2021-22

Bench: Shamim Yahya & Ms. Astha Chandraasstt. Year: 2021-22

For Appellant: Shri Amit AroraFor Respondent: Shri Vizay B. Vasanta, CIT-DR

Section 143(3)Section 9Section 9(1)(vii)

right to use trade name, the Indian hotels have paid license fee to the affiliates. The affiliates have also offered such license fee as royalty income. There is no dispute that the license fee paid to the affiliates have been taxed in India. It is the reasoning of learned Commissioner

M/S Six Continents Hotels Inc., Gurgaon vs. The Dy CIT Circle-4(2)(1), International Taxation, Mumbai

ITA 6657/MUM/2019[2015-16]Status: DisposedITAT Mumbai08 Feb 2024AY 2015-16

Bench: Shri Om Prakash Kant & Shri Sandeep Singh Karhail

For Appellant: Revenue byFor Respondent: S/Shri S.K. Aggarwal a/w Siddesh Chaugule

ITA 6656/MUM/2019[2014-15]Status: DisposedITAT Mumbai08 Feb 2024AY 2014-15

quality of services as offered by Holiday Inn and Crowne Plaza worldwide. The assessee entered into license agreements with hotels in India and earned Royalty income, which was offered to tax in India. Marketing Contribution and Reservation Fees received by the assessee from hotels in India were claimed

M/S Six Continents Hotels Inc., Gurgaon vs. Dy CIT Circle 4 (2)(1)(Inter National Taxation), Mumbai

Bench: Shri Om Prakash Kant & Shri Sandeep Singh Karhail

For Appellant: S/Shri S.K. Aggarwal a/w Siddesh ChauguleFor Respondent: Shri Anil Sant

ITA 6655/MUM/2019[2013-14]Status: DisposedITAT Mumbai08 Feb 2024AY 2013-14

Six Continents Hotels Inc., Gurgaon vs. Dy CIT Circle- 4 (2)(1), Mumbai

In the result, the appeal by the assessee for the assessment year 2012-

Bench: Shri Om Prakash Kant & Shri Sandeep Singh Karhail

For Appellant: S/Shri S.K. Aggarwal a/w Siddesh ChauguleFor Respondent: Shri Anil Sant

ITA 3662/MUM/2019[2012-13]Status: DisposedITAT Mumbai08 Feb 2024AY 2012-13

quality of services as offered by Holiday Inn and Crowne Plaza worldwide. The assessee entered into license agreements with hotels in India and earned Royalty income, which was offered to tax in India. The Six Continents Hotels, Inc. ITA no.3362/Mum./2019, ITA no.6655/Mum./2019, ITA no.6656/Mum./2019, ITA no.6657/Mum./2019

Six Continents Hotels, Inc, Mumbai vs. DCIT (It) - 4(2)(1), Mumbai

In the result, the appeal by the assessee for the assessment year 2012-

Bench: Shri Om Prakash Kant & Shri Sandeep Singh Karhail

For Appellant: S/Shri S.K. Aggarwal a/w Siddesh ChauguleFor Respondent: Shri Anil Sant

ITA 365/CHNY/2023[2020-21]Status: DisposedITAT Chennai23 Jan 2024AY 2020-21

quality of services as offered by Holiday Inn and Crowne Plaza worldwide. The assessee entered into license agreements with hotels in India and earned Royalty income, which was offered to tax in India. The Six Continents Hotels, Inc. ITA no.3362/Mum./2019, ITA no.6655/Mum./2019, ITA no.6656/Mum./2019, ITA no.6657/Mum./2019

Dassault Systemes Simulia Corp, Chennai vs. DCIT International Taxation -1(1), Chennai

The appeal stand allowed in terms of our above order

Bench: Hon’Ble Shri V. Durga Rao, Jm & Hon’Ble Shri Manoj Kumar Aggarwal, Am आयकरअपीलसं./ Ita No.365/Chny/2023 (िनधा"रणवष" / Assessment Year: 2020-21) M/S. Dassault Systems Simulia Corp Dcit C/O. Deloitte Haskins & Sells Llp, International Taxation-1(1), बनाम/ 7Th Floor, Asv Ramana Towers Chennai. Vs. 52, Venkatnarayana Road, Chennai-600 017. "थायीलेखासं./जीआइआरसं./Pan/Gir No. Aadcd-3705-D (अपीलाथ"/Appellant) : (!"थ" / Respondent) अपीलाथ"कीओरसे/ Appellant By : Shri S.P. Chidambaram (Advocate)- Ld.Ar !"थ"कीओरसे/Respondent By : Shri Nandakumar (Cit)-Ld. Dr सुनवाईकीतारीख/Date Of Hearing : 17-01-2024 घोषणाकीतारीख /Date Of Pronouncement : 23-01-2024 आदेश / O R D E R Manoj Kumar Aggarwal ()

For Appellant: Shri S.P. Chidambaram (Advocate)- Ld.ARFor Respondent: Shri Nandakumar (CIT)-Ld. DR

Section 143(3)Section 144C(5)Section 155(14)Section 199

26AS. 1.3. The learned AO and DRP has erred in law and on facts in restricting the TDS credit to a proportion of the royalty income offered to tax. 1.4. The learned AO and DRP failed to appreciate the fact that the entire income as per Form 26AS has been ... States of America (USA). The assessee returned income of Rs.37.95 Crores and claimed refund of Rs.3.51 Crores. It transpired that the assessee earned contractual royalty income from M/s Dassault Systems India Pvt. Ltd. and offered the same to tax. However, in the financial statements, the assessee offered royalty income

DCIT Intl. Tax 1(2)(2), New Delhi vs. Dassault Systemes Biovia K.K., Japan

ITA 1253/DEL/2023[2017-18]Status: DisposedITAT Delhi23 Jan 2024AY 2017-18

Bench: Dr. B.R.R. Kumar & Shri Anubhav Sharma

For Appellant: Shri Vishal Kalra, Shri S.S. TomarFor Respondent: Shri Sanjay Kumar, Sr. DR

Section 143(3)Section 9(1)(vi)

correct in holding that the consideration received by the assessee from Indian end customers for sale of software products does not constitute royalty income and is not taxable under Article 12 of the India - Japan Double Taxation Avoidance Agreement( DTAA) and is not business profits under Article ... Engineering Analysis, and accordingly holding that the consideration received by the assessee from Indian end customers for sale of software products does not constitute royalty income, despite review petition of revenue against said judgement is pending before SC. III) The revenue craves leave to add, alter, amend or vary from

DCIT, Circle 1(2)(2), International Taxation, New Delhi vs. Dassault Systems Biovia K.K., Japan

ITA 1252/DEL/2023[2016-17]Status: DisposedITAT Delhi23 Jan 2024AY 2016-17

Bench: Dr. B.R.R. Kumar & Shri Anubhav Sharma

For Appellant: Shri Vishal Kalra, Shri S.S. TomarFor Respondent: Shri Sanjay Kumar, Sr. DR

Section 143(3)Section 9(1)(vi)

Ge Precision Healthcare Llc, Usa vs. The Assistant Commissioner of Income Tax, Circle 1(3)(1), Minto Road, New Delhi

In the result, the appeal of the assessee is allowed

ITA 2623/DEL/2023[AY 2021-22]Status: DisposedITAT Delhi17 Jan 2024

Bench: Sh. Saktijit Deydr. B. R. R. Kumar

For Appellant: Sh. Ravi Sharma, AdvFor Respondent: Sh. Vizay B. Vasanta, CIT-DR

Section 143(3)Section 144C(13)Section 234ASection 234BSection 234FSection 270ASection 56Section 9(1)(vii)

characterized as royalty under section 9(1)(vi) of the Act and Article 12 of the DTAA. In case, it is not taxable as royalty income, it can be treated as 25 GE Precision Healthcare LLC business income under Article 7 of the tax treaty. Thus, to our understanding ... conditions mentioned therein. 20. In the facts of the present appeal, to our understanding, the receipts in dispute could have been characterized either as royalty income falling under Article 12 or business income under Article 7 of the tax treaty. However, in view of the ratio laid down in judicial

ACIT Circle Intl Taxation 3(1)(1), New Delhi vs. Westin Hotel Management L.P., Noida

In the result, the appeal of the Revenue stands dismissed

ITA 2391/DEL/2023[2021-22]Status: DisposedITAT Delhi16 Jan 2024AY 2021-22

Bench: Shri Shamim Yahya & Ms. Astha Chandra[Assessment Year: 2021-22]

Section 143(3)Section 9Section 9(1)(vii)

The Dy. DIT (It) 1(2), Mumbai vs. Atl Media Limited (As A Successor to Expand Fast Holdings Ltd.), Mumbai

In the result, appeal of Revenue is dismissed

ITA 3880/MUM/2007[2003-2004]Status: DisposedITAT Mumbai02 Jan 2024AY 2003-2004

For Appellant: Shri Niraj Sheth, Advocate with Shri Jai BhansaliFor Respondent: Shri Anil Sant

ITA 3149/MUM/2007[2003-2004]Status: DisposedITAT Mumbai02 Jan 2024AY 2003-2004

advertisement revenue. In respect of subscription income from pay channels, the Assessing Officer held subscription as 'royalty' and levied tax @20% on such royalty income. There is no Double Taxation Avoidance Agreement (DTAA) between India and BVI. The Assessing Officer assessed income of the assessee from its operations in India ... circumstances of the case and in law, the ITAT erred is not appreciating that the assessing officer has correctly assessed distribution receipt as 'Royalty Income'?" Answering the aforesaid question in negative the Hon'ble Court held: "12. Section 9 of the Act pertains to income deemed to accrue or arise

Atl Media Limited (As A Successor to Expand Fast Holdings Ltd.), Mumbai vs. The ITO (It) 3(1), Mumbai

Bench: Shri Vikas Awasthy & Shri Gagan Goyalआ.अ.सं.4479/मुं/2006 (नि. व.2002-03)

For Appellant: Shri Niraj Sheth, Advocate withFor Respondent: Shri Anil Sant

ITA 4631/MUM/2006[2002-2003]Status: DisposedITAT Mumbai02 Jan 2024AY 2002-2003

ADIT (I.T) - 1(2), Mumbai vs. Atl Media Limited (As A Successor to Expand Fast Holdings Ltd.), Mumbai

Bench: Shri Vikas Awasthy & Shri Gagan Goyalआ.अ.सं.4479/मुं/2006 (नि. व.2002-03)

For Appellant: Shri Niraj Sheth, Advocate withFor Respondent: Shri Anil Sant

ITA 4479/MUM/2006[2002-2003]Status: DisposedITAT Mumbai02 Jan 2024AY 2002-2003

Atl Media Limited (As A Successor to Expand Fast Holdings Ltd.), Mumbai vs. DDIT (I.T.) - 1(2), Mumbai

Bench: Shri Vikas Awasthy & Shri Gagan Goyalआ.अ.सं.4479/मुं/2006 (नि. व.2002-03)

For Appellant: Shri Niraj Sheth, Advocate withFor Respondent: Shri Anil Sant