Payments to non-residents would be subject to withholding tax only if the income is chargeable to tax- SC

Brief: Appellant(s) are the distributors of imported prepackaged shrink wrapped standardized software from Microsoft and other Suppliers outside India. During the relevant assessment year(s) appellant(s) made payments to the said software Suppliers which according to the appellant(s) represented the purchase price of the above mentioned software. The ITO (TDS) held that since the sale of software included a license to use the same, payments made by the appellant(s) to the foreign Suppliers constituted royalty, which was deemed to accrue or arise in India. Therefore, TAS was liable to be deduct...