Payment to non-resident to purchase advertisement space for resale to advertisers in India constitutes Royalty

Advertisement Google India (P.) Ltd. Vs Jt. DIT (ITAT Bangalore) In terms of Google Adwords distribution agreement, assessee was licensed to use trademarks, brand features and other intangibles owned by Google Ireland though same not stood transferred to the assessee. Therefore, payments made by the assessee-company to Google Ireland for use of all the intangibles constituted ‘Royalty’ under section 9(1)(vi) and assessee was under an obligation to withhold tax under section 195. Therefore, disallowance made by AO was justified. FULL TEXT OF THE ITAT JUDGMENT These appealsare preferred b...