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“computer software”

Chapter III - Incomes Not IncludedSection 10BSection 10B Explanation 2 / Section 80HHF951 judgments

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

Leading authorities on computer software

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.

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.

III v. HCL Technologies Ltd.
93 Taxmann.com 33 · 2018 · Supreme Court
245
citing judgments

When computing the deduction available under Section 10A of the Income-tax Act, communication expenses must be excluded from the total turnover for the purpose of calculating the eligible relief.

CIT v. Synopsis International Old Ltd.
212 Taxmann 454 · 2013 · High Court
177
citing judgments

Payments for computer software are treated as royalty income under Section 9(1)(vi) of the Income-tax Act, particularly concerning the expanded definition provided by Explanation 2 and Explanation 4.

CIT v. Asahi India Safety Glass Ltd.
346 ITR 329 · 2012 · High Court
129
citing judgments

Expenses incurred for software license purchase, development of miscellaneous software, and maintenance of websites are considered revenue in nature. Such expenses are deductible in the year they are incurred.

Amway India Enterprises v. DCIT
111 ITD 112 · 2008 · ITAT
127
citing judgments

Depreciation is allowable on computer software, including software licenses, at the rate of 60%.

Kotak Mahindra Primus Ltd. v. DDIT
11 SOT 578 · 2007 · ITAT
99
citing judgments

Payments for data processing services using a mainframe computer and specialized software are not taxable as fees for the use of equipment if the Indian entity lacks independent rights or physical access to use the computer or software.

Judgments citing computer software

Income Tax Officer Ward 2(1)(1) Intl.Taxation, Delhi vs. Hcl Technologies Limited, New Delhi

In the result, appeal is partly allowed

ITA 1392/DEL/2024[2012-13]Status: DisposedITAT Delhi28 Nov 2024AY 2012-13

Bench: Ms Madhumita Roy & Shri Naveen Chandra

For Appellant: Shri Neeraj Jain, AdvFor Respondent: Ms. Surbhi Sharma, CIT-DR
Section 10ASection 201Section 201(1)Section 9(1)(vii)

considering the assessee's claims of exemption u/s 10A/10AA of the Income Tax Act, in ITR in respect of profit generated from export of computer software to clients located (refer to para 11.8(c), Page No.93 of AO order) in various jurisdictions as the income earned from export of software

Lanco Solar (Gujarat) Private Limited, Hyderabad vs. ITO., Ward-16(1), Hyderabad

In the result, appeals filed by the assessee are allowed

ITA 906/HYD/2024[2018-19]Status: DisposedITAT Hyderabad27 Nov 2024AY 2018-19

Bench: Shri Vijay Pal Rao, Vice-A N D Shri Manjunatha, G. & आ.अपी.सं /Ita Nos. 905 & 906/Hyd/2024 (िनधा"रण वष"/Assessment Years: 2017-18 & 2018-19) Lanco Solar (Gujarat) Vs. Income Tax Officer Private Limited, Hyderabad Ward 16(1) Pan:Aabcl1095J Hyderabad (Appellant) (Respondent) िनधा""रती "ारा/Assessee By: Shri Rakesh Joshi, Ca राज" व "ारा/Revenue By:: Shri Gudimella V P Pavan Kumar, Dr सुनवाई की तारीख/Date Of Hearing: 13/11/2024 घोषणा की तारीख/Pronouncement: 27/11/2024 आदेश/Order

For Appellant: Shri Rakesh Joshi, CAFor Respondent: : Shri Gudimella V P Pavan
Section 80I

slump sale. He has accordingly referred to the CBDT Circular No.1/2013 dated 17/01/2013 and submitted that an identical issue relating to the export of computer software has been examined by the CBDT and the same has been clarified in Para 2(iv) of the said circular wherein the CBDT ... Finance Department of Revenue Central Board of Direct Taxes New Delhi, the 17th January 2013 Circular No. 01/2013 Subject: Issues relating to export of computer software – Direct tax benefits – Clarification reg The Indian Software Industry has been the beneficiary of direct tax incentives under the provisions like sections 10A, 10AA

Lanco Solar (Gujarat) Private Limited, Hyderabad vs. ITO., Ward-16(1), Hyderabad

In the result, appeals filed by the assessee are allowed

ITA 905/HYD/2024[2017-18]Status: DisposedITAT Hyderabad27 Nov 2024AY 2017-18

Bench: Shri Vijay Pal Rao, Vice-A N D Shri Manjunatha, G. & आ.अपी.सं /Ita Nos. 905 & 906/Hyd/2024 (िनधा"रण वष"/Assessment Years: 2017-18 & 2018-19) Lanco Solar (Gujarat) Vs. Income Tax Officer Private Limited, Hyderabad Ward 16(1) Pan:Aabcl1095J Hyderabad (Appellant) (Respondent) िनधा""रती "ारा/Assessee By: Shri Rakesh Joshi, Ca राज" व "ारा/Revenue By:: Shri Gudimella V P Pavan Kumar, Dr सुनवाई की तारीख/Date Of Hearing: 13/11/2024 घोषणा की तारीख/Pronouncement: 27/11/2024 आदेश/Order

For Appellant: Shri Rakesh Joshi, CAFor Respondent: : Shri Gudimella V P Pavan
Section 80I

slump sale. He has accordingly referred to the CBDT Circular No.1/2013 dated 17/01/2013 and submitted that an identical issue relating to the export of computer software has been examined by the CBDT and the same has been clarified in Para 2(iv) of the said circular wherein the CBDT ... Finance Department of Revenue Central Board of Direct Taxes New Delhi, the 17th January 2013 Circular No. 01/2013 Subject: Issues relating to export of computer software – Direct tax benefits – Clarification reg The Indian Software Industry has been the beneficiary of direct tax incentives under the provisions like sections 10A, 10AA

Newgen Imaging Systems Pvt. Ltd., Chennai vs. DCIT, International Taxation-2(2), Chennai

In the result the grounds of appeal raised by the assesse is allowed

ITA 1626/CHNY/2024[2010-11]Status: DisposedITAT Chennai27 Nov 2024AY 2010-11

Bench: Shri Aby T Varkey & Shri Amitabh Shuklaआयकर अपील सं./Ita Nos.1626/Chny/2024 निर्धारण वर्ा /Assessment Years: 2010-11 Newgen Imaging Systems Private Deputy Commissioner Of Income Limited, International Taxation-2(2), No.268, Royapettah High Road, Chennai. Royapettah, Madras, Tamil Nadu-600014. [Pan: Aaacn2041B] (अपीलार्थी/Appellant) (प्रत्यर्थी/Respondent) : Shri G. Shiva Kumar, Advocate अपीलार्थी की ओर से/ Assessee By : Shri Keerthi Narayanan, Jcit प्रत्यर्थी की ओर से /Revenue By सुनवाई की तारीख/Date Of Hearing : 02.09.2024 घोषणा की तारीख /Date Of Pronouncement : 27.11.2024

For Appellant: Shri Keerthi Narayanan, JCIT
Section 201(1)Section 250Section 40Section 9(1)

section 9(1) (vi) of the IT act as amended by finance act 2012 postulates that amounts paid for right to use computer software would tantamount to income of the deductee within the meanings of that section and therefore TDS deduction u/s 40(a)(i) was required to be done ... noted that during the year 2011 - 2012 relevant to the Assessment Year, the Assessee debited an amount of Rs.7,79,78,139/- under computer software and maintenance. According to the Assessing Officer, the Assessee has to deduct Tax Deducted at Source [TDS] and under the Domestic Law the above payment

ACIT, Aayakar Bhawan Church Gate vs. Sbicap Securities Limited, Mumbai

In the result, the appeal of the revenue is dismissed

ITA 5076/MUM/2024[2014]Status: DisposedITAT Mumbai25 Nov 2024

Bench: Shri Narendra Kumar Billaiya & Shri Rahul Chaudharyassessment Year: 2014

For Appellant: NoneFor Respondent: Shri Suresh Gaikwad, Sr.DR

that during the course of the scrutiny assessment proceedings the AO noticed that the assessee has claimed depreciation at the rate of 60% on computer software. The AO was of the opinion that the assessee is eligible for depreciation at the rate of 25%. Accordingly, the AO asked the assessee ... find that the depreciation schedule provides separate rates of depreciation for computer with Softwares and intangible assets. The schedule provides depreciation on computers including computer software at the rate of 60%. Computer Software has not been further bifurcated which means that any software whether imbibed in the computer

The Hongkong and Shanghai Banking Corporation Limited, Mumbai vs. The Deputy Commissioner of Income Tax (International Taxation)-2(2)(2), Mumbai

ITA 2203/MUM/2024[2014-15]Status: DisposedITAT Mumbai21 Nov 2024AY 2014-15

Bench: Shri Narendra Kumar Billaiya, Hon'Ble & Shri Sunil Kumar Singh, Hon'Ble

For Appellant: Shri Porus Kaka & Shri Divesh Chawla, A/RsFor Respondent: Shri Vivek Perampurna, CIT D/R
Section 143(3)Section 148Section 44ASection 92E

आयकर अपीलीय अधिकरण न्यायपीठ, मुंबई । IN THE INCOME TAX APPELLATE TRIBUNAL “I” BENCH, MUMBAI BEFORE SHRI NARENDRA KUMAR BILLAIYA, HON

The Hongkong and Shanghai Banking Corporation Limited India Branches, Mumbai vs. The Deputy Commissioner of Income Tax (International Taxation)-2(2)(2), Mumbai

ITA 2202/MUM/2024[2015-16]Status: DisposedITAT Mumbai21 Nov 2024AY 2015-16

Bench: Shri Narendra Kumar Billaiya, Hon'Ble & Shri Sunil Kumar Singh, Hon'Ble

For Appellant: Shri Porus Kaka & Shri Divesh Chawla, A/RsFor Respondent: Shri Vivek Perampurna, CIT D/R
Section 143(3)Section 148Section 44ASection 92E

आयकर अपीलीय अधिकरण न्यायपीठ, मुंबई । IN THE INCOME TAX APPELLATE TRIBUNAL “I” BENCH, MUMBAI BEFORE SHRI NARENDRA KUMAR BILLAIYA, HON

The Hongkong and Shanghai Banking Corporation Limited -India Branches, Mumbai vs. The Deputy Commissioner of Income Tax (International Taxation)-2(2)(2), Mumbai

ITA 2201/MUM/2024[2013-14]Status: DisposedITAT Mumbai21 Nov 2024AY 2013-14

Bench: Shri Narendra Kumar Billaiya, Hon'Ble & Shri Sunil Kumar Singh, Hon'Ble

For Appellant: Shri Porus Kaka & Shri Divesh Chawla, A/RsFor Respondent: Shri Vivek Perampurna, CIT D/R
Section 143(3)Section 148Section 44ASection 92E

आयकर अपीलीय अधिकरण न्यायपीठ, मुंबई । IN THE INCOME TAX APPELLATE TRIBUNAL “I” BENCH, MUMBAI BEFORE SHRI NARENDRA KUMAR BILLAIYA, HON

DCIT(It)-2(2)(2), Nariman Point vs. The Hongkong and Shanghai Banking Corporation Ltd, Bandra

ITA 1335/MUM/2024[2015-16]Status: DisposedITAT Mumbai21 Nov 2024AY 2015-16

Bench: Shri Narendra Kumar Billaiya, Hon'Ble & Shri Sunil Kumar Singh, Hon'Ble

For Appellant: Shri Porus Kaka & Shri Divesh Chawla, A/RsFor Respondent: Shri Vivek Perampurna, CIT D/R
Section 143(3)Section 148Section 44ASection 92E

आयकर अपीलीय अधिकरण न्यायपीठ, मुंबई । IN THE INCOME TAX APPELLATE TRIBUNAL “I” BENCH, MUMBAI BEFORE SHRI NARENDRA KUMAR BILLAIYA, HON

DCIT(It) - 2(2)(2), Air India Building vs. The Hongkong and Shanghai Banking Corporation Ltd, Bandra

ITA 1334/MUM/2024[2014-15]Status: DisposedITAT Mumbai21 Nov 2024AY 2014-15

Bench: Shri Narendra Kumar Billaiya, Hon'Ble & Shri Sunil Kumar Singh, Hon'Ble

For Appellant: Shri Porus Kaka & Shri Divesh Chawla, A/RsFor Respondent: Shri Vivek Perampurna, CIT D/R
Section 143(3)Section 148Section 44ASection 92E

आयकर अपीलीय अधिकरण न्यायपीठ, मुंबई । IN THE INCOME TAX APPELLATE TRIBUNAL “I” BENCH, MUMBAI BEFORE SHRI NARENDRA KUMAR BILLAIYA, HON

DCIT(It)-2(2)(2), Air India Building vs. The Hongkong and Shanghai Banking Corporation Ltd, Bandra

ITA 1333/MUM/2024[2013-14]Status: DisposedITAT Mumbai21 Nov 2024AY 2013-14

Bench: Shri Narendra Kumar Billaiya, Hon'Ble & Shri Sunil Kumar Singh, Hon'Ble

For Appellant: Shri Porus Kaka & Shri Divesh Chawla, A/RsFor Respondent: Shri Vivek Perampurna, CIT D/R
Section 143(3)Section 148Section 44ASection 92E

आयकर अपीलीय अधिकरण न्यायपीठ, मुंबई । IN THE INCOME TAX APPELLATE TRIBUNAL “I” BENCH, MUMBAI BEFORE SHRI NARENDRA KUMAR BILLAIYA, HON

Deputy Commissioner of Income Tax, Corporate Circle, Madurai vs. M/S Ramco Systems Limited, Rajapalayam

ITA 1269/CHNY/2023[2009-10]Status: DisposedITAT Chennai20 Nov 2024AY 2009-10
For Appellant: Mr.S. Muralidhar, FCA &For Respondent: Mr. Nilay Baran Som, CIT
Section 143(3)Section 147Section 148Section 154

impugned First Appellate order which is noted as under: "The assessee-company is engaged in business of software development and resale of computer software and hardware and filed its return of income for Α.Υ.2009-10 on 29.09.2009 admitting a total Income of Rs. Nil. The return was processed

Dy. Commissioner of Income Tax-5(2)(1), Mumbai vs. Infinite Computer Solutions (India) Limited, Delhi

In the result, all the appeals of the revenue and all the cross-

ITA 2217/MUM/2024[2015-16]Status: DisposedITAT Mumbai18 Nov 2024AY 2015-16
Section 10ASection 143(3)Section 148

under MAT and the tax was computed under the provisions of MAT. The assessee company engaged in the business of computer software development and providing technical services. The case of the assessee was reopened by issuing of notice u/s 148 of the Act on 24.06.2021 and the AO has described

Dy. Commissioner of Income Tax-5(2)(1), Mumbai vs. Infinite Computer Solutions (India) Limited, Mumbai

In the result, all the appeals of the revenue and all the cross- objections filed by the assessee are dismissed

ITA 2010/MUM/2024[2013-14]Status: DisposedITAT Mumbai18 Nov 2024AY 2013-14

Bench: Shri Amarjit Singh & Shri Rahul Chaudhary

For Appellant: Shri Dharan Gandhi a/w Ms. Ritu PunjabiFor Respondent: Ms. Madhu Malati Ghosh, CIT/DR & Shri H.M
Section 10ASection 143(3)Section 148

under MAT and the tax was computed under the provisions of MAT. The assessee company engaged in the business of computer software development and providing technical services. The case of the assessee was reopened by issuing of notice u/s 148 of the Act on 24.06.2021 and the AO has described

Dy. Commissioner of Income Tax -5(2)(1), Mumbai vs. Infinite Computer Solutions (India) Limited, Delhi

In the result, all the appeals of the revenue and all the cross- objections filed by the assessee are dismissed

ITA 2005/MUM/2024[2014-15]Status: DisposedITAT Mumbai18 Nov 2024AY 2014-15

Bench: Shri Amarjit Singh & Shri Rahul Chaudhary

For Appellant: Shri Dharan Gandhi a/w Ms. Ritu PunjabiFor Respondent: Ms. Madhu Malati Ghosh, CIT/DR & Shri H.M
Section 10ASection 143(3)Section 148

under MAT and the tax was computed under the provisions of MAT. The assessee company engaged in the business of computer software development and providing technical services. The case of the assessee was reopened by issuing of notice u/s 148 of the Act on 24.06.2021 and the AO has described

Qualcomm Incorporated, San Diego vs. The Deputy Commissioner of Income-Tax Circle 3(1)(1) International Taxation, Civic Centre Minto Road

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

ITA 3742/DEL/2023[2021-22]Status: DisposedITAT Delhi14 Nov 2024AY 2021-22

Bench: Shri Saktijit Dey, Hon’Ble & Shri M. Balaganeshqualcomm Incorporated, Vs. Dcit, 5775, Morehouse Drive, Circle-3(1), San Diego, California, International Taxation, Usa, 92121, Usa New Delhi (Appellant) (Respondent) Pan:Aaacq1484H Assessee By : Shri Percy Pardiwala, Sr. Adv Shri Nishant Thakkar, Adv Ms. Jasmin Amalsadavala, Adv Shri Zoheb Balwani, Ca Revenue By: Shri Vijay B. Basanta, Cit Dr Shri Amit Katoch, Sr. Dr Date Of Hearing 20/09/2024 Date Of Pronouncement 14/11/2024

For Appellant: Shri Percy Pardiwala, Sr. AdvFor Respondent: Shri Vijay B. Basanta, CIT DR
Section 115ASection 9(1)(vi)

consequence post this amendment as the transfer of any rights in an intellectual property includes transfer of any right to use of a computer software irrespective of the medium through which it is transferred. 166. In a nutshell the submissions of the Revenue are that Qualcomm has made available ... equipment and does not relate to royalty on licensing of any computer Qualcomm Incorporated software. The OEMs received no income from licensing in computer software. The OEMs sell handsets/equipments to the service providers, outside India and hence the OEMs have no source of income in India. 178. Thus

Digcert Inc, Usa vs. ACIT, Income Tax Officer, Circle Int. Taxation 1(2)(2), New Delhi

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

ITA 3626/DEL/2023[2021-22]Status: DisposedITAT Delhi14 Nov 2024AY 2021-22

Bench: Shri Saktijit Dey, Hon’Ble & Shri M. Balaganeshdigicert Inc. Vs. Acit, 2600, West Executive Pkwy, Income Tax Officer, Suite 500 Lehi, Utah, Foreign, Circle International United States Taxation-1(2)(2), New Delhi (Appellant) (Respondent) Pan:Aaecd9837H Assessee By : Ms. Tanmayee Rajkumar, Adv Revenue By: Shri Vijay B. Basanta, Cit(Dr) Shri Amit Katoch, Sr. Dr Date Of Hearing 25/10/2024 Date Of Pronouncement 14/11/2024

For Appellant: Ms. Tanmayee Rajkumar, AdvFor Respondent: Shri Vijay B. Basanta, CIT(DR)
Section 143(3)Section 144C(1)Section 144C(13)Section 9(1)(vii)

before us. 6. The assessee during the year under consideration earned income from license of software where it provides the right to use the computer software license through End User License Agreements (EULAs) / reseller agreements to Indian customers which in its opinion, was neither taxable

Infosys Limited, Bangalore vs. Deputy Commissioner of Income Tax, Circle-3(1)(1), Bangalore

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

ITA 962/BANG/2024[2016-17]Status: DisposedITAT Bangalore12 Nov 2024AY 2016-17

Bench: Shri Waseem Ahmed & Shri Keshav Dubeyassessment Year: 2016-17

For Appellant: Shri P.C Kincha, C.AFor Respondent: Shri A Sreenivasa Rao, CIT (DR)
Section 1Section 10ASection 2Section 234BSection 250Section 32A

Machinery' as per annual report. 2.3. learned AO has erred in holding that new asset for claiming deduction under section 32AC excludes computers or computer software along with any office appliances, vehicles etc. The learned AO has erred in not appreciating the fact that the exclusion from new asset under ... section 32AC is for office appliances including computers or computer software, which would mean that computers or computer software used for office purposes only have to be excluded. 2.4. On facts and circumstances of the case, the appellant is engaged in the business of manufacture of an article or thing

Dassault SystÈMes Soildworks Corporaion, Chennai vs. ACIT (International Taxation)_2(1)(2), Mumbai

In the result, appeal of the assessee is allowed

ITA 4534/MUM/2023[2021-22]Status: DisposedITAT Mumbai08 Nov 2024AY 2021-22

Bench: Shri Narendra Kumar Billaiya, Hon’Ble & Shri Sunil Kumar Singh, Hon’Ble

For Appellant: Shri Akshay Kumar, A/RFor Respondent: Shri Vivek Perampurna, D/R
Section 143(3)Section 234BSection 9(1)(vi)

/2018) (vide order dated 02 March 2021) held that the amount paid by resident Indian end users/ distributors to non-resident computer software manufacturers/ suppliers, is not payment for royalty for the use of copyright in the computer software, and held that such income shall not taxable in the hands ... cinematograph films or recordings on any means of reproduction for use for radio or television broadcasting, any patent, trade mark, design or model, plan, computer software programme, secret formula or process, or for information concerning industrial, commercial or scientific experience; and (b) payments of any kind received as consideration

Cadmatic Oy, Mumbai vs. ACIT International Circle, 2 (1) (1), Mumbai

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

ITA 1799/MUM/2022[2019-20]Status: DisposedITAT Mumbai07 Nov 2024AY 2019-20

Bench: Shri Narendra Kumar Billaiya, Hon’Ble & Shri Sunil Kumar Singh, Hon’Ble

For Appellant: Shri Suresh Joshi, A/RFor Respondent: Shri Arun Kumar, Sr. D/R
Section 143(3)Section 195

wherein it has been held that the amounts. paid by resident Indian Company to non-resident computer software manufacturers/suppliers, as consideration for the resale/use of the computer software is not the payment of royalty for the use of copyright in the computer software, and that the same does not give