“Section 9(1)(11)”

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.

Payments made for mere information, not involving the imparting of secret, confidential, or specialized technical, industrial, commercial, or scientific knowledge, experience, or skill, do not qualify as 'royalty' under Section 9(1)(vi) of the Income Tax Act or relevant DTAA articles. Not every piece of commercial information constitutes royalty; expertise or skill in providing it is required.

Payments are liable for deduction of tax at source when they are in the nature of royalty. The withholding tax liability can be worked out by applying a proportion to the total remittance.

Payments for software licenses that do not involve a transfer of copyright or proprietary interest, but merely authorize end-user access and use, do not constitute 'royalty' income. Additionally, IT support services are not taxable as Fees for Technical Services (FTS) or royalty.

Payments for the use of copyrighted articles, including computer software, constitute royalty income under Section 9(1)(vi) of the Income Tax Act, and are therefore subject to withholding tax under Section 195.

Payments for strategic counselling and advisory services are not royalty if they do not involve imparting information concerning industrial, commercial, or scientific experience, but rather are for business promotion, marketing, publicity, or financial advisory services.

This case establishes principles for distinguishing operating leases from finance leases and determining if leased equipment constitutes a Permanent Establishment (PE). It also clarifies that reassessment proceedings initiated on borrowed satisfaction without independent application of mind are invalid.

Expenses incurred and reimbursed for seconded employees under a secondment agreement are not liable to tax deduction at source and do not constitute 'fees for technical services'. The secondment agreement itself forms an independent arrangement for securing services.