Payment for International Private Leased Circuits not royalty hence disallowance u/s. 40(a)(i) not justified

Cognizant Technology Solutions India Private Limited Vs CIT (Madras High Court) Madras High Court held that payment made for International Private Leased Circuits [IPLC] doesn’t constitute royalty within the expression provided under clause (iva) to Explanation 2 to section 9(1)(vi) of the Income Tax Act. Hence, disallowance u/s. 40(a)(i) of the Income Tax Act not sustained. Facts- The assessee is a company engaged in the business of software development and export. Apropos of assessment year 2003-2004, the Assessing Officer finding that the amount paid by the assessee to Sprint USA, for In...