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“royalty income”

International TaxSection 9(1)(vi)Section 9(1)(vi)629 judgments

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

Leading authorities on royalty income

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.

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).

DIT v. Infrasoft Ltd.
39 Taxmann.com 88 · 2013 · High Court
269
citing judgments

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.

CIT v. Siemens Aktiongesellschaft
310 ITR 320 · 2009 · High Court
259
citing judgments

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
343 ITR 470 · 2012 · High Court
256
citing judgments

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

Indian Institute of Banking and Finance ( Formerly Known As the Indian Institute of Bankers), Mumbai vs. CIT (Exemptions), Mumbai

In the result, all the appeals by the assessee are dismissed

ITA 874/MUM/2021[2016-17]Status: DisposedITAT Mumbai17 May 2023AY 2016-17

Bench: Shri Om Prakash Kant & Shri Sandeep Singh Karhail

For Appellant: Shri Nitesh JoshiFor Respondent: Shri Purushottam Tripuri
Section 10Section 10(22)Section 2(15)

From the perusal of financials of the assessee, forming part of the paper book, we find that during the year assessee earned a Royalty income of Rs.2,04,98,322 on publications. As per the assessee, upto the financial year 2003-04, the assessee was itself publishing its courseware which

Indian Institution of Banking and Finance (Formerly Known As the India Institute of Bankers), Mumbai vs. CIT (Exemption), Mumbai

In the result, all the appeals by the assessee are dismissed

ITA 6955/MUM/2019[2018-19]Status: DisposedITAT Mumbai17 May 2023AY 2018-19

Bench: Shri Om Prakash Kant & Shri Sandeep Singh Karhail

For Appellant: Shri Nitesh JoshiFor Respondent: Shri Purushottam Tripuri
Section 10Section 10(22)Section 2(15)

From the perusal of financials of the assessee, forming part of the paper book, we find that during the year assessee earned a Royalty income of Rs.2,04,98,322 on publications. As per the assessee, upto the financial year 2003-04, the assessee was itself publishing its courseware which

The Indian Institute of Banking & Finance ( Formerly Known As the Indian Insitute of Bankers), Mumbai vs. Commissioner of Income Tax (Exemptions), Mumbai

In the result, all the appeals by the assessee are dismissed

ITA 7447/MUM/2018[2017-18]Status: DisposedITAT Mumbai17 May 2023AY 2017-18

Bench: Shri Om Prakash Kant & Shri Sandeep Singh Karhail

For Appellant: Shri Nitesh JoshiFor Respondent: Shri Purushottam Tripuri
Section 10Section 10(22)Section 2(15)

From the perusal of financials of the assessee, forming part of the paper book, we find that during the year assessee earned a Royalty income of Rs.2,04,98,322 on publications. As per the assessee, upto the financial year 2003-04, the assessee was itself publishing its courseware which

M/S. ACIT 1(1), Mumbai vs. The Hindustan Unilever Ltd, Mumbai

In the result, the appeal of the assesse is partly allowed and the appeal of the revenue stand dismissed

ITA 4033/MUM/2008[2000-2001]Status: DisposedITAT Mumbai16 May 2023AY 2000-2001

Bench: Shri Vikas Awasthy & Shri Amarjit Singhm/S Hindustan Unilever Vs. Addl. Commissioner Of Ltd., Hindustan Lever Income Tax, Range 1(1) House, 165/166 Backbay Mumbai Reclamation Mumbai – 400 020 स्थायी लेखा सं./जीआइआर सं./Pan/Gir No: Aaach1004N Appellant .. Respondent Acit-1(1), Vs. M/S Hindustan Unilever Room No. 579, Ltd., 165/166, Backbay Aayakar Bhavan, Reclamation Mumbai – 400 020 Mumbai – 400 020 स्थायी लेखा सं./जीआइआर सं./Pan/Gir No: Aaach1004N Appellant .. Respondent Appellant By : Nishant Thakkar & Ms. Jasmin Amalsadvala Respondent By : Chandip Singh Date Of Hearing 09.03.2023 Date Of Pronouncement 16.05.2023 आदेश / O R D E R Per Amarjit Singh (Am): Both These Appeals Filed By The Assesse & The Revenue Are Pertained To Assessment Year 2000-01 Based On Similar Fact & P A G E | 2

For Appellant: Nishant Thakkar &For Respondent: Chandip Singh
Section 80Section 80ASection 80H

Rs.77,319/- 15.1 He failed to appreciate and ought to have held that the appellant did not incur any expenditure on earning of royalty income. The appellant craves leave to add to, alter or amend all or any of the aforestated grounds of appeal.” 2. The fact in brief

M/S. Hindustan Unilever Ltd, Mumbai vs. The ACIT (TDS)-1(1), Mumbai

In the result, the appeal of the assesse is partly allowed and the appeal of the revenue stand dismissed

ITA 3951/MUM/2008[2000-2001]Status: DisposedITAT Mumbai16 May 2023AY 2000-2001

Bench: Shri Vikas Awasthy & Shri Amarjit Singhm/S Hindustan Unilever Vs. Addl. Commissioner Of Ltd., Hindustan Lever Income Tax, Range 1(1) House, 165/166 Backbay Mumbai Reclamation Mumbai – 400 020 स्थायी लेखा सं./जीआइआर सं./Pan/Gir No: Aaach1004N Appellant .. Respondent Acit-1(1), Vs. M/S Hindustan Unilever Room No. 579, Ltd., 165/166, Backbay Aayakar Bhavan, Reclamation Mumbai – 400 020 Mumbai – 400 020 स्थायी लेखा सं./जीआइआर सं./Pan/Gir No: Aaach1004N Appellant .. Respondent Appellant By : Nishant Thakkar & Ms. Jasmin Amalsadvala Respondent By : Chandip Singh Date Of Hearing 09.03.2023 Date Of Pronouncement 16.05.2023 आदेश / O R D E R Per Amarjit Singh (Am): Both These Appeals Filed By The Assesse & The Revenue Are Pertained To Assessment Year 2000-01 Based On Similar Fact & P A G E | 2

For Appellant: Nishant Thakkar &For Respondent: Chandip Singh
Section 80Section 80ASection 80H

Rs.77,319/- 15.1 He failed to appreciate and ought to have held that the appellant did not incur any expenditure on earning of royalty income. The appellant craves leave to add to, alter or amend all or any of the aforestated grounds of appeal.” 2. The fact in brief

Owens Corning Inc., Mumbai vs. The Dy Comm of Income Tax (International Tax), Circle -3(2)(2), Mumbai

In the result, appeal filed by the assessee is allowed

ITA 376/MUM/2023[2020-21]Status: DisposedITAT Mumbai10 May 2023AY 2020-21

Bench: Shri B.R. Baskaran (Am) & Shri Pavan Kumar Gadale (Jm)

Section 143(3)Section 144C(13)Section 9(1)(vi)

covered by the decisions rendered by the Coordinate Benches in assessee’s own case in the earlier years and accordingly prayed for deletion of royalty income assessed by the Assessing Officer. 5. The Learned DR, however, supported the order passed by learned DRP. 6. We have heard the rival contentions ... Tribunal in the earlier years on an identical issue, we hold that the lease rental income earned by the assessee cannot be treated as royalty income, both under provisions of DTAA and Income Tax Act. Accordingly we direct the Assessing Officer to delete the assessment of Rs. 14.88 crores made

Factiva Ltd. C/O. Price Waterhouse & Co. Lltp, Mumbai vs. Asstt. CIT (International Taxation)-2(3)(1), Mumbai

In the result, both the appeals of the assessee are allowed

ITA 1247/MUM/2021[2017-18]Status: DisposedITAT Mumbai09 May 2023AY 2017-18
Section 9(1)(vi)

consider the beneficial provisions of the tax treaty to see whether the contention of the assessee that the alleged payment from DJCIPL is not royalty income. 11. As per article 12 of the Tax Treaty, "Royalty" is defined as under: 10.1.4.1. (a) "payments of any kind received as a consideration

L'Oreal India Private Limited, Mumbai vs. Assistant Commissioner of Income Tax Income Tax, Circle-7(1)(1), Mumbai

In the result, the appeal filed by the assessee is partly allowed

ITA 2269/MUM/2022[2018-19]Status: DisposedITAT Mumbai03 May 2023AY 2018-19

Bench: Shri Om Prakash Kant, Am & Ms. Kavitha Rajagopal, Jm L’Oreal India Private Limited Asst. Cit, Circle-7(1)(1) A-Wing, 8Th Floor, Marathon Futurex, Mumbai-400 020 N.M.Joshi Marg, Lower Parel, Vs. Mumbai-400 013

For Appellant: Shri Niraj ShethFor Respondent: Dr. Yogesh Kamat
Section 143(3)Section 4Section 92Section 92BSection 92C

adjustment which was based thereon, could not survive. (vii) It is further submitted that L'Oreal SA, France (recipient of income) has offered the royalty income received from the Appellant and the said royalty income has been accepted to be at arm's length by the TPO in hands

I.A.R. Systems Aktiebolag, Mumbai vs. DCIT(It)-2(2)(1), Mumbai

In the result, appeals filed by the assessee are allowed

ITA 598/MUM/2022[2018-19]Status: DisposedITAT Mumbai02 May 2023AY 2018-19

Bench: Shri Amit Shukla, Hon'Ble & Shri S. Rifaur Rahman, Hon'Ble

Section 144C(5)Section 9(1)(vi)

consideration was receipt for provision of support services rendered by it which income is not taxable in India but has been erroneously taxed as 'royalty' income by the Assessing Officer under the India-Sweden Tax Treaty. During the previous year relevant to assessment year (AY) 2018-19, the assessee ... directions dated 27.01.2022, the Ld. DRP has refuted the arguments of the assessee with respect to both the types of income - FTS and Royalty income. For instance, in Para 10.14 Ld. DRP has noted that, "Thus, issuance of notification is part of legislative requirement to implement a DTAA, which

Deputy Commissioner of Income Tax (It)-3(2)(1), Mumbai vs. M/S Marriott International Design & Construction Services Inc., Mumbai

In the result the appeal filed by the Assessing Officer is thus dismissed

ITA 2977/MUM/2022[2018-2019]Status: DisposedITAT Mumbai02 May 2023AY 2018-2019

Bench: Shri Amit Shukla, Hon'Ble & Shri S. Rifaur Rahman, Hon'Bledcit (It) – 3(2)(1) V. M/S. Marriott International Design Room No. 1632, 16Th Floor & Construction Services Inc., Air India Building, Nariman Point C/O. Marriot Hotels India Pvt. Ltd., Mumbai – 400 021 303A, 304, Fulcrum B-Wing, Hiranandani Business Park Mumbai, Sahar Road Andheri (E) - 400099 Pan: Aagcm5401Q (Appellant) (Respondent) C.O. No. 01/Mum/2023 [Arising Out Of Ita No. 2977/Mum/2022 (A.Y: 2018-19)] M/S. Marriott International Design V. Dcit (It) – 3(2)(1) & Construction Services Inc., Room No. 1632, 16Th Floor C/O. Marriot Hotels India Pvt. Ltd., Air India Building 303A, 304, Fulcrum Nariman Point B-Wing, Hiranandani Business Park Mumbai – 400 021 Mumbai, Sahar Road Andheri (E) - 400099 Pan: Aagcm5401Q (Appellant) (Respondent) Assessee Represented By : Shri Paras Savla Department Represented By : Shri Kunal Haver

Section 143(2)Section 143(3)Section 144C

company viz MARRIOTT INTERNATIONAL HOTELS INC.. for AY 2006-07 to 2009- 10, on holding the receipts of Marriott International Hotels Inc as Royalty income, had discussed in the order as under: "8.10 Entire Agreement: The following constitute the entire agreement between the parties and/or their respective affiliates, supersede

Inter Continental Hotels Group (Asia Pacific) Pte Ltd., Singapore vs. ACIT, Circle- 2(1)(1), International Taxation, New Delhi

In the result, the appeal is allowed

ITA 698/DEL/2021[2017-18]Status: DisposedITAT Delhi05 Apr 2023AY 2017-18

Bench: Dr. B. R. R. Kumarsh. Yogesh Kumar Us

For Appellant: Sh. S. K. Aggarwal, CA &For Respondent: Sh. Anshuman Pattnaik, CIT DR
Section 143(3)

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

Upaid Systems Ltd., New Delhi vs. DCIT, Circle- 3(1)(2), Intl. Taxation, New Delhi

In the result, the appeal is partly allowed

ITA 3460/DEL/2018[2012-13]Status: FixedITAT Delhi24 Mar 2023AY 2012-13

Bench: Shri G.S. Pannu, Hon’Ble & Shri Saktijit Deyassessment Year: 2012-13

Section 9(1)(vi)

Rs.18,83,16,253/-. Subsequently, on 29.03.2014, the assessee filed a revised return of income, declaring total income of Rs.24,71,55,622/-, including royalty income of Rs.3,16,68,603/-. 4.2 In the meanwhile, to determine taxability of the compensation received from Satyam, the assessee moved an application before ... amount of royalty out of the compensation received. In course of assessment proceeding, the Assessing Officer noticing that there is huge difference in royalty income offered by the assessee in the original return of income and revised return of income called upon the assessee to furnish the necessary details

Quasar Media Private Limited, New Delhi vs. ACIT Circle-20(2), New Delhi

Appeal are allowed and the remaining grounds being consequential in nature follow the event

ITA 7088/DEL/2019[2015-16]Status: DisposedITAT Delhi10 Mar 2023AY 2015-16

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

For Appellant: Sh. Anil Bhalla, CAFor Respondent: Sh. Sanjay Kumar, Sr. DR
Section 195Section 40Section 5Section 9(1)Section 9(1)(b)Section 9(1)(i)Section 9(1)(vi)

4915/DEL/2016 [A.Y 2010-11] with six other connected was relied to contend that subscription to the cloud computing services do not give rise royalty income. The Ld DR supported the findings of Tax authorities below. 7.1 Giving thoughtful consideration to the matter on record, the bench is of considered view ... considered view that the ld. Tax Authorities below had fallen in error in considering the subscription received towards Cloud Services to be royalty income.” 8 Quasar Media Pvt. Ltd No distinction on facts or law could be pointed by Ld. DR. Therefore, ITA No. 312/Del/2021 Microsoft Regional Sales

Tata Nyk Shipping Pte. Ltd., Singapore vs. CIT International Taxation-3, New Delhi

In the result, the appeal is allowed

ITA 1067/DEL/2022[2016-17]Status: DisposedITAT Delhi09 Mar 2023AY 2016-17

Bench: Shri Saktijit Dey & Shri Pradip Kumar Kediaassessment Year: 2016-17 M/S. Tata Nyk Shipping Pte. Vs. Commissioner Of Income Tax, Ltd., International Taxation-3, 6, Shenton Way, #18-08B, New Delhi Oue Downtown 2, Singapore Pan :Aadct9945P (Appellant) (Respondent)

Section 142(1)Section 263Section 92C

observed, since, the receipts of the assessee from Indian customers is for letting out of vessels, therefore, they have to be treated as royalty income, once, section 44B would not apply as its scope 12 AY: 2016-17 extends only to business income. Thus, basis the aforesaid reasoning, he held ... effective management of shipping activity is not controlled from Netherlands, the income from shipping business would be liable for taxation in India as royalty income. Similarly, scope of Article 8 of India–Japan DTAA is extremely limited and does not include the nature of profits as derived by the assessee

DCIT, Circle-5(2), New Delhi vs. Canon India Pvt. Ltd, Gurgaon

In the result, the appeal of the revenue is otios

ITA 6367/DEL/2019[2009-10]Status: DisposedITAT Delhi15 Feb 2023AY 2009-10

Bench: Sh. N. K. Billaiya & Sh. Anubhav Sharmaassessment Year: 2009-10 Canon India Pvt. Ltd. 7Th Dcit Circle – 5 (2) Vs Floor, Tower-B, Building New Delhi No.5, Dlf Epitome, Dlf Phase-3, Gurgaon Pan No.Aaacc4275D (Appellant) (Respondent)

Section 10Section 10ASection 143Section 148

Income Tax Act, 1961 on account of remittance from associate enterprise treating it as export remittance instead of royalty income. 2. The appellant craves leave for reserving the right to amend, modify alter, add or forego any ground(s) of appeal at any time before or during the hearing

Harparshad and Company Pvt. Ltd., New Delhi vs. Addl. CIT, Special Bench-4, New Delhi

In the result, the appeal of the assessee is allowed

ITA 7622/DEL/2017[2014-15]Status: DisposedITAT Delhi14 Feb 2023AY 2014-15

Bench: Sh. C. M. Gargdr. B. R. R. Kumar

For Appellant: Sh. Ved Jain, AdvFor Respondent: Sh. Anuj Garg, Sr. DR
Section 14ASection 37

expenses in order to advertise and publicize its brand with a view to enhance its visibility and exploitation for the purpose of earning higher royalty income. 2 Harprashad and Company Pvt. Ltd 2. That the learned CIT(A) has erred in law and on facts of the case in sustaining ... this brand name for the purpose of marketing their products and in turn ‘royalty’ is received from M/s Escorts Ltd. The gross royalty income earned during the year is Rs.21.32 crores. During the year under consideration, the assessee has incurred the brand promotion expenses of Rs.1.92 crores to stimulate

Yum! Restaurants Marketing Pvt. Ltd., Haryana vs. ITO, Ward- 27(4), New Delhi

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

ITA 3945/DEL/2019[2015-16]Status: DisposedITAT Delhi09 Feb 2023AY 2015-16

Bench: Shri Challa Nagendra Prasad & Shri Pradip Kumar Kediaआ.अ.सं/.I.T.A No.3945/Del/2019 िनधा"रणवष"/Assessment Year: 2015-16 बनाम Yum Restaurants Marketing Ito Vs. Pvt. Ltd. Ward-27(4), 12Th Floor, Tower-D, New Delhi. Global Business Park, M.G. Road, Gurgaon, Haryana. Pan No. Aaacy1884D अपीलाथ" Appellant ""यथ"/Respondent

wherein the Ld. AO did not recognise that in the current assessment year the increase in the sales and net royalty income of YRIPL bore a direct nexus to the AMP activities carried on by the Appellant, and as such the benefit to YRIPL was clearly established. Every receipt ... Ld.ClT(A) has grossly erred in not recognizing that in the current assessment year the increase in the sales and net royalty income of YRIPL bore a direct nexus to the AMP activities carried on by the Appellant, and as such the benefit to YRIPL was clearly established. 6. That

Shri Suresh Mal Lodha, 537-38, Mahima Trinity, New Sanganer Road, Swej Farm, Jaipur vs. ACIT Jaipur, Jaipur

In the result, the appeal of the assessee is partly allowed

ITA 968/JPR/2019[2009-10]Status: DisposedITAT Jaipur12 Jan 2023AY 2009-10

Bench: SHRI SANDEEP GOSAIN (Judicial Member), SHRI RATHOD KAMLESH JAYANTBHAI (Accountant Member)

For Appellant: Shri Mahenda Gargieya, AdvocateFor Respondent: Shri A.S. Nehra, Addl. CIT-DR
Section 139(1)Section 143(2)Section 143(3)Section 24Section 271(1)Section 271(1)(c)Section 274

return - Whether since revenue could not controvert assessee’s plea and further assessee had paid TDS on salary and advance tax on his royalty income and after adjusting same, balance amount of tax along with interest was also deposited, it could be held that assessee had not concealed particulars

Kony Inc., Usa vs. ACIT, Circle- 2(1)(2), Intl. Taxation, New Delhi

In the result, appeal is allowed, as indicated above

ITA 616/DEL/2021[2017-18]Status: DisposedITAT Delhi11 Jan 2023AY 2017-18

Bench: Shri G.S. Pannu, Hon’Ble & Shri Saktijit Deyassessment Year: 2015-16

Section 143(3)Section 144C(13)Section 9(1)(vi)

nature of royalty under the treaty provisions. That being the case, the receipt from annual maintenance charges being not ancillary or subsidiary to any royalty income cannot be brought to tax under Article 12(4)(a) of the tax treaty. Therefore, it has to be seen, whether it can come

Inter Continental Hotels Group (Asia Pacific) Pte Ltd., Gurgaon vs. DCIT, Circle- 2(1)(1), International Taxation, New Delhi

In the result, the appeal is allowed

ITA 4608/DEL/2019[2013-14]Status: DisposedITAT Delhi11 Jan 2023AY 2013-14

Bench: Shri G.S. Pannu & Shri Saktijit Dey

Section 144C(3)

Management Support Services are in the nature of the FTS under Article 12(4)(a) as it is ancillary and subsidiary to the royalty income received from license to use brand names by various hotels in India. 15. Thus, we have to examine whether the services rendered by the assessee ... 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