“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

M/S Unisys India Pvt Ltd, Bangalore vs. Deputy Commissioner of Income Tax Circle-7(1)(1), Bangalore

In the result, the appeal of the assessee is allowed and the appeal of the revenue is dismissed

ITA 2027/BANG/2017[2010-11]Status: DisposedITAT Bangalore17 May 2022AY 2010-11

Bench: Shri N.V Vasudevan & Ms. Padmavathy Sassessment Year : 2010-11

For Appellant: Shri Dhanesh Bafna, AR & Shri PratikFor Respondent: Shri Srinivasa T Bidari, CIT(DR)

Section 92Section 92(1)Section 92B(1)

Hence, it would be inappropriate to compare the business operations of the assessee with that of a company following hybrid business model comprising of royalty income as well as regular software services income, for which revenue break-up is not available. He finally submitted that this was a good reason

Deputy Commissioner of Income Tax Circle-7(1)(1), Bangalore vs. M/S Unisys India Pvt Ltd, Bangalore

In the result, the appeal of the assessee is allowed and the appeal of the revenue is dismissed

ITA 2024/BANG/2017[2010-11]Status: DisposedITAT Bangalore17 May 2022AY 2010-11

Bench: Shri N.V Vasudevan & Ms. Padmavathy Sassessment Year : 2010-11

For Appellant: Shri Dhanesh Bafna, AR & Shri PratikFor Respondent: Shri Srinivasa T Bidari, CIT(DR)

Section 92Section 92(1)Section 92B(1)

Strides Pharma Science Ltd, Navi Mumbai vs. Dy CIT 15 (3)(2), Mumbai

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

ITA 7992/MUM/2019[2015-16]Status: DisposedITAT Mumbai06 Apr 2022AY 2015-16

Bench: Shri Prashant Maharishi & Shri Sandeep Singh Karhail

For Appellant: Shri Nishit Gandhi a/w Ms. Akshita BhandariFor Respondent: Ms. Vatsalaa Jha (CIT)

Section 143(3)Section 144C(1)Section 144C(13)Section 144C(5)Section 92C

assessee’s appeal is allowed. 44. Ground no.8, relates to non–grant of foreign tax credit amounting to Rs.6,77,61,054, on royalty income and Rs.2,13,99,088, on interest income offered to tax in the return of income. 45. During the course of hearing, the learned

ACIT (It)-4(3)(1), Mumbai vs. M/S. Viacom 18 Media P. Ld., Mumbai

In the result, the appeals filed by the Revenue are dismissed

ITA 1177/MUM/2021[2017-18]Status: DisposedITAT Mumbai28 Mar 2022AY 2017-18

Bench: Shri Om Prakash Kant () & Shri Amarjit Singh () Assessment Year: 2017-18 & Assessment Year: 2017-18 Acit (It)-4(3)(1), M/S Viacom 18 Media Pvt. Ltd., Room No. 1613, 16Th Floor, Air Vs. Zion Bizworld, Subhash Road-A, Near India Building, Nariman Point, Garware Office, Ville Parle (East), Mumbai-400020. Mumbai-400057 Pan No. Aaacm 9164 E Appellant Respondent

For Appellant: Mr. Nimesh Vora, ARFor Respondent: Mr. S.N. Kabra , DR

Section 195Section 195(2)Section 9(1)Section 9(1)(vi)

held that payment of transponder service fees to Intelsat by Applicant is a 'process' and thus it is in the nature of royalty income taxable in India in terms of the provisions of Section 9(1) (vi) of the IT Act as well as treaty. The definition of Royalties ... been preferred in this case. Also, the orders passed earlier, in the case of the applicant treating the transponder services fee as ‘royalty income’ has been upheld by the Ld. CIT(A) and ITAT." 2.2 Accordingly, the Assessing Officer held those payments as ‘royalty’ and directed the assessee to withhold

M/S Talisma Corporation Pvt Ltd, Bangalore vs. Deputy Commissioner of Income Tax Circle-7(1)(1), Bangalore

In the result, the appeal filed by the assessee stands allowed

ITA 2499/BANG/2017[2013-14]Status: HeardITAT Bangalore21 Mar 2022AY 2013-14

Bench: Shri. Chandra Poojari & Smt. Beena Pillaiit(Tp)A No. 2499/Bang/2017 Assessment Year : 2013-14 M/S. Talisma Corporation Pvt. Ltd., 3Rd Floor, Olympia The Deputy Building, Commissioner Of Bagmane Tech Park, Income Tax, C V Raman Nagar, Circle 7 (1)(1), Byrasandra Post, Bangalore. Vs. Bangalore – 560 093. Pan: Aabct1052F Appellant Respondent Assessee By : Shri T. Suryanarayan, Advocate Revenue By : Dr. Manjunath Karkihalli, Cit-Dr Date Of Hearing : 21-03-2022 Date Of Pronouncement : 21-03-2022 Order Per Beena Pillaipresent Appeal Filed By Assessee Against The Final Assessment Order Dated 26.09.2017 For A.Y. 2013-14 By Ld.Dcit, Circle – 7(1)(1), Bangalore On Following Grounds Of Appeal: “Based On The Facts & Circumstances Of The Case & In Law. Talisma Corporation Private Limited (Hereinafter Referred To As "Appellant"), Respectfully Craves Leave To Prefer An Appeal Against The Appeal Order Passed By The Learned Assessing Officer [Hereinafter Referred To As The Learned A01 Under Section 143(3) Read With Section 144C(13) Of The Income-Tax Act. 1961 (The Act") On The Following Grounds: That On The Facts & Circumstances Of The Case & In Law: 1. The Learned Ao/ Transfer Pricing Officer (.Tpo') Erred. In Law & In Facts. In Making An Addition Of Inr 1,44.13,409

For Appellant: Shri T. Suryanarayan, AdvocateFor Respondent: Dr. Manjunath Karkihalli, CIT-DR

Section 133(6)Section 143(3)Section 144C(13)Section 271(1)(c)

which the AE shall pay to assessee a licence fee equal to 30% of gross revenue. This receipt by assessee has been shown as royalty income by assessee. Apart from this, the assessee sells this software directly to third party customers in Asia-pacific region. It is noted that assessee

Income Tax Officer -4(3)(2), Mumbai vs. Zee Entertainment Enterprises Limited, Mumbai

In the result, these appeals by the revenue stand dismissed

ITA 6177/MUM/2019[2013-14]Status: DisposedITAT Mumbai01 Mar 2022AY 2013-14

Bench: Shri Shamim Yahya (Am) & Shri Laliet Kumar (Jm)

Section 195Section 201(1)Section 9Section 9(1)(vi)

directions given by the DRP the Assessing Officer passed assessment orders and taxed the income pertaining to satellite transmission service/telecasting companies as royalty income. This order of the Assessing Officer was challenged before the ITAT. The ITAT has allowed the appeal of the assessee. Perusal of the order

JCIT, Bangalore vs. M/S Pmc Sierra India Pvt. Ltd., Bangalore

In the result, appeal of the revenue stands dismissed and the cross objection of assessee stands partly allowed

ITA 1139/BANG/2016[2009-10]Status: DisposedITAT Bangalore28 Feb 2022AY 2009-10

Bench: Shri. Chandra Poojari & Smt. Beena Pillaiit(Tp)A No. 1139/Bang/2016 Assessment Year : 2009-10 M/S. Micro Semi Storage Solutions India Pvt. Ltd., The Deputy (Formerly Known As Commissioner Of Pmc-Sierra India Pvt. Income Tax, Ltd.) Circle – 4(1)(1), 19, Church Street, Bangalore. Vs. Bangalore – 560 001. Pan: Aadcp6802F Appellant Respondent & C.O. No. 84/Bang/2017 (In It(Tp)A No. 1139/Bang/2016) (By Assessee) : Smt. Tanmayee Rajkumar, Assessee By Advocate : Shri Sankar Ganesh K, Jcit & Revenue By Shri Sumer Singh Meena, Cit Dr Date Of Hearing : 23-12-2021 Date Of Pronouncement : 28-02-2022 Order Per Beena Pillaipresent Cross Appeals Are Filed By Revenue As Well As Assessee Against The Assessment Order Dated 30.04.2013 By The Ld.Dcit

Section 143(3)Section 92C

Asstt. CIT(It)-4(3)(1), Mumbai vs. M/S. Viacom 18 Media P. Ltd, Mumbai

In the result, the appeals filed by the revenue are dismissed

ITA 1138/MUM/2021[2019-20]Status: DisposedITAT Mumbai24 Feb 2022AY 2019-20

Bench: Shri Prashant Maharishi, Am & Shri Sandeep Singh Karhail, Jm

For Appellant: Shri Nimesh Vora, ARFor Respondent: Shri Milind S. Chavan, SR DR

Section 195Section 9

held that payment of transponder service fees to Intelsat by Applicant is a 'process' and thus it is in the nature of royalty income taxable in India in terms of the provisions of Section 9(1)(vi) of the IT Act as well as treaty. The definition of Royalties ... been preferred in this case. Also, the orders passed earlier, in the case of the applicant treating the transponder services fee as ' royalty income' has been upheld by the id. CIT(A) and IT AT. " Basically, the Assessing Officer held these payments as royalty on the basis of Honourable ITAT

Asstt. CIT(It)-4(3)(1), Mumbai vs. M/S. Viacom 18 Media P. Ltd, Mumbai

In the result, the appeals filed by the revenue are dismissed

ITA 1137/MUM/2021[2019-20]Status: DisposedITAT Mumbai24 Feb 2022AY 2019-20

Bench: Shri Prashant Maharishi, Am & Shri Sandeep Singh Karhail, Jm

For Appellant: Shri Nimesh Vora, ARFor Respondent: Shri Milind S. Chavan, SR DR

Section 195Section 9

held that payment of transponder service fees to Intelsat by Applicant is a 'process' and thus it is in the nature of royalty income taxable in India in terms of the provisions of Section 9(1)(vi) of the IT Act as well as treaty. The definition of Royalties ... been preferred in this case. Also, the orders passed earlier, in the case of the applicant treating the transponder services fee as ' royalty income' has been upheld by the id. CIT(A) and IT AT. " Basically, the Assessing Officer held these payments as royalty on the basis of Honourable ITAT

Asstt. CIT(It)-4(3)(1), Mumbai vs. M/S. Viacom 18 Media P. Ltd, Mumbai

In the result, the appeals filed by the revenue are dismissed

ITA 1136/MUM/2021[2019-20]Status: DisposedITAT Mumbai24 Feb 2022AY 2019-20

Bench: Shri Prashant Maharishi, Am & Shri Sandeep Singh Karhail, Jm

For Appellant: Shri Nimesh Vora, ARFor Respondent: Shri Milind S. Chavan, SR DR

Section 195Section 9

held that payment of transponder service fees to Intelsat by Applicant is a 'process' and thus it is in the nature of royalty income taxable in India in terms of the provisions of Section 9(1)(vi) of the IT Act as well as treaty. The definition of Royalties ... been preferred in this case. Also, the orders passed earlier, in the case of the applicant treating the transponder services fee as ' royalty income' has been upheld by the id. CIT(A) and IT AT. " Basically, the Assessing Officer held these payments as royalty on the basis of Honourable ITAT

Asstt. CIT(It)-4(3)(1), Mumbai vs. M/S. Viacom 18 Media P. Ltd, Mumbai

In the result, the appeals filed by the revenue are dismissed

ITA 1135/MUM/2021[2019-20]Status: DisposedITAT Mumbai24 Feb 2022AY 2019-20

Bench: Shri Prashant Maharishi, Am & Shri Sandeep Singh Karhail, Jm

For Appellant: Shri Nimesh Vora, ARFor Respondent: Shri Milind S. Chavan, SR DR

Section 195Section 9

held that payment of transponder service fees to Intelsat by Applicant is a 'process' and thus it is in the nature of royalty income taxable in India in terms of the provisions of Section 9(1)(vi) of the IT Act as well as treaty. The definition of Royalties ... been preferred in this case. Also, the orders passed earlier, in the case of the applicant treating the transponder services fee as ' royalty income' has been upheld by the id. CIT(A) and IT AT. " Basically, the Assessing Officer held these payments as royalty on the basis of Honourable ITAT

Asstt. CIT(It)-4(3)(1), Mumbai vs. M/S. Viacom 18 Media P. Ltd, Mumbai

In the result, the appeals filed by the revenue are dismissed

ITA 1134/MUM/2021[2019-20]Status: DisposedITAT Mumbai24 Feb 2022AY 2019-20

Bench: Shri Prashant Maharishi, Am & Shri Sandeep Singh Karhail, Jm

For Appellant: Shri Nimesh Vora, ARFor Respondent: Shri Milind S. Chavan, SR DR

Section 195Section 9

held that payment of transponder service fees to Intelsat by Applicant is a 'process' and thus it is in the nature of royalty income taxable in India in terms of the provisions of Section 9(1)(vi) of the IT Act as well as treaty. The definition of Royalties ... been preferred in this case. Also, the orders passed earlier, in the case of the applicant treating the transponder services fee as ' royalty income' has been upheld by the id. CIT(A) and IT AT. " Basically, the Assessing Officer held these payments as royalty on the basis of Honourable ITAT

Asstt. CIT(It)-4(3)(1), Mumbai vs. M/S. Viacom 18 Media P. Ltd, Mumbai

In the result, the appeals filed by the revenue are dismissed

ITA 1133/MUM/2021[2019-20]Status: DisposedITAT Mumbai24 Feb 2022AY 2019-20

Bench: Shri Prashant Maharishi, Am & Shri Sandeep Singh Karhail, Jm

For Appellant: Shri Nimesh Vora, ARFor Respondent: Shri Milind S. Chavan, SR DR

Section 195Section 9

held that payment of transponder service fees to Intelsat by Applicant is a 'process' and thus it is in the nature of royalty income taxable in India in terms of the provisions of Section 9(1)(vi) of the IT Act as well as treaty. The definition of Royalties ... been preferred in this case. Also, the orders passed earlier, in the case of the applicant treating the transponder services fee as ' royalty income' has been upheld by the id. CIT(A) and IT AT. " Basically, the Assessing Officer held these payments as royalty on the basis of Honourable ITAT

Asstt. CIT(It)-4(3)(1), Mumbai vs. M/S. Viacom 18 Media P. Ltd, Mumbai

In the result, the appeals filed by the revenue are dismissed

ITA 1132/MUM/2021[2019-20]Status: DisposedITAT Mumbai24 Feb 2022AY 2019-20

Bench: Shri Prashant Maharishi, Am & Shri Sandeep Singh Karhail, Jm

For Appellant: Shri Nimesh Vora, ARFor Respondent: Shri Milind S. Chavan, SR DR

Section 195Section 9

held that payment of transponder service fees to Intelsat by Applicant is a 'process' and thus it is in the nature of royalty income taxable in India in terms of the provisions of Section 9(1)(vi) of the IT Act as well as treaty. The definition of Royalties ... been preferred in this case. Also, the orders passed earlier, in the case of the applicant treating the transponder services fee as ' royalty income' has been upheld by the id. CIT(A) and IT AT. " Basically, the Assessing Officer held these payments as royalty on the basis of Honourable ITAT

Asstt. CIT(It)-4(3)(1), Mumbai vs. M/S. Viacom 18 Media P. Ltd, Mumbai

In the result, the appeals filed by the revenue are dismissed

ITA 1131/MUM/2021[2019-20]Status: DisposedITAT Mumbai24 Feb 2022AY 2019-20

Bench: Shri Prashant Maharishi, Am & Shri Sandeep Singh Karhail, Jm

For Appellant: Shri Nimesh Vora, ARFor Respondent: Shri Milind S. Chavan, SR DR

Section 195Section 9

held that payment of transponder service fees to Intelsat by Applicant is a 'process' and thus it is in the nature of royalty income taxable in India in terms of the provisions of Section 9(1)(vi) of the IT Act as well as treaty. The definition of Royalties ... been preferred in this case. Also, the orders passed earlier, in the case of the applicant treating the transponder services fee as ' royalty income' has been upheld by the id. CIT(A) and IT AT. " Basically, the Assessing Officer held these payments as royalty on the basis of Honourable ITAT

Asstt. CIT(It)-4(3)(1), Mumbai vs. M/S. Viacom 18 Media P. Ltd, Mumbai

In the result, the appeals filed by the revenue are dismissed

ITA 1130/MUM/2021[2019-20]Status: DisposedITAT Mumbai24 Feb 2022AY 2019-20

Bench: Shri Prashant Maharishi, Am & Shri Sandeep Singh Karhail, Jm

For Appellant: Shri Nimesh Vora, ARFor Respondent: Shri Milind S. Chavan, SR DR

Section 195Section 9

held that payment of transponder service fees to Intelsat by Applicant is a 'process' and thus it is in the nature of royalty income taxable in India in terms of the provisions of Section 9(1)(vi) of the IT Act as well as treaty. The definition of Royalties ... been preferred in this case. Also, the orders passed earlier, in the case of the applicant treating the transponder services fee as ' royalty income' has been upheld by the id. CIT(A) and IT AT. " Basically, the Assessing Officer held these payments as royalty on the basis of Honourable ITAT

Asstt. CIT(It)-4(3)(1), Mumbai vs. M/S. Viacom 18 Media P. Ltd, Mumbai

In the result, the appeals filed by the revenue are dismissed

ITA 1129/MUM/2021[2019-20]Status: DisposedITAT Mumbai24 Feb 2022AY 2019-20

Bench: Shri Prashant Maharishi, Am & Shri Sandeep Singh Karhail, Jm

For Appellant: Shri Nimesh Vora, ARFor Respondent: Shri Milind S. Chavan, SR DR

Section 195Section 9

held that payment of transponder service fees to Intelsat by Applicant is a 'process' and thus it is in the nature of royalty income taxable in India in terms of the provisions of Section 9(1)(vi) of the IT Act as well as treaty. The definition of Royalties ... been preferred in this case. Also, the orders passed earlier, in the case of the applicant treating the transponder services fee as ' royalty income' has been upheld by the id. CIT(A) and IT AT. " Basically, the Assessing Officer held these payments as royalty on the basis of Honourable ITAT

Asstt. CIT(It)-4(3)(1), Mumbai vs. M/S. Viacom 18 Media P. Ltd., Mumbai

In the result, the appeals filed by the revenue are dismissed

ITA 1097/MUM/2021[2019-20]Status: DisposedITAT Mumbai24 Feb 2022AY 2019-20

Bench: Shri Prashant Maharishi, Am & Shri Sandeep Singh Karhail, Jm

For Appellant: Shri Nimesh Vora, ARFor Respondent: Shri Milind S. Chavan, SR DR

Section 195Section 9

held that payment of transponder service fees to Intelsat by Applicant is a 'process' and thus it is in the nature of royalty income taxable in India in terms of the provisions of Section 9(1)(vi) of the IT Act as well as treaty. The definition of Royalties ... been preferred in this case. Also, the orders passed earlier, in the case of the applicant treating the transponder services fee as ' royalty income' has been upheld by the id. CIT(A) and IT AT. " Basically, the Assessing Officer held these payments as royalty on the basis of Honourable ITAT

Asstt. CIT(It)-4(3)(1), Mumbai vs. M/S. Viacom 18 Media P. Ltd., Mumbau

In the result, the appeals filed by the revenue are dismissed

ITA 1096/MUM/2021[2019-20]Status: DisposedITAT Mumbai24 Feb 2022AY 2019-20

Bench: Shri Prashant Maharishi, Am & Shri Sandeep Singh Karhail, Jm

For Appellant: Shri Nimesh Vora, ARFor Respondent: Shri Milind S. Chavan, SR DR

Section 195Section 9

held that payment of transponder service fees to Intelsat by Applicant is a 'process' and thus it is in the nature of royalty income taxable in India in terms of the provisions of Section 9(1)(vi) of the IT Act as well as treaty. The definition of Royalties ... been preferred in this case. Also, the orders passed earlier, in the case of the applicant treating the transponder services fee as ' royalty income' has been upheld by the id. CIT(A) and IT AT. " Basically, the Assessing Officer held these payments as royalty on the basis of Honourable ITAT

Asstt. CIT(It)-4(3)(1), Mumbai vs. M/S. Viacom 18 Media P. Ltd., Mumbai

In the result, the appeals filed by the revenue are dismissed

ITA 1095/MUM/2021[2019-20]Status: DisposedITAT Mumbai24 Feb 2022AY 2019-20

Bench: Shri Prashant Maharishi, Am & Shri Sandeep Singh Karhail, Jm

For Appellant: Shri Nimesh Vora, ARFor Respondent: Shri Milind S. Chavan, SR DR

Section 195Section 9

held that payment of transponder service fees to Intelsat by Applicant is a 'process' and thus it is in the nature of royalty income taxable in India in terms of the provisions of Section 9(1)(vi) of the IT Act as well as treaty. The definition of Royalties ... been preferred in this case. Also, the orders passed earlier, in the case of the applicant treating the transponder services fee as ' royalty income' has been upheld by the id. CIT(A) and IT AT. " Basically, the Assessing Officer held these payments as royalty on the basis of Honourable ITAT