Case Law Details
In re Citrix Systems Asia Pacific Pty. Ltd. (AAR)- We find from the decision of the Karnataka High Court in CIT v. M/s. Samsung Electronics Co. Ltd (ITA No. 2808 of 2005) and connected cases that that High Court has held that in that case, the argument that it would be only a sale of copy of the copyright software could not be accepted. It was a payment towards the price of CD, the software and the license to use granted. The payment was royalty as defined in the Income-tax Act and the DTAC involved therein.
Some decisions of Income-tax Appellate Tribunals and the decision of the High Court of Delhi in DIT v. Ericssion AB are also brought to our notice where the view has been taken that the payment would not be royalty. The decision of a Delhi Tribunal, taking a contrary view has also been brought to our notice. We are not persuaded to adopt the reasoning of the Bombay Tribunal and that of the High Court of Delhi in the light of our discussion above and that in the Ruling in Millennium.
In the light of our discussion above, on question no.1, it has to be ruled that the payments received by the applicant from the distributor for sale of the software product is in the nature of royalty within the meaning of Section 9(1)(vi) of the Income-tax Act.
FULL TEXT OF THE AAR IS AS FOLLOWS-
AUTHORITY FOR ADVANCE RULINGS (INCOME TAX), NEW DELHI
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