Case Law Details
Aveva Information Technology India (P) Ltd. Vs DCIT (ITAT Mumbai)
Payment to parent company for copyrighted software on principle to principle basis cannot be treated royalty and TDS not applicable on payment to parent company not having PE in India.
Hon’ble ITAT considered distribution agreement between the assessee and its parent company Aveva Information Technology India Pvt. Ltd., England and after considering relevant facts and on analysis of provisions of section 9(1)(vi) of the Act, and Article 5 and 13 of Indo-UK tax treaty held that payment made by the assessee to its parent company for procuring and distributing copyrighted software on principle to principle basis could not be treated as payment towards royalty. The Tribunal, further held that since the parent company was not having PE in India, therefore, the assessee was not liable to deduct tax at source as required u/s 195 of the Act and hence for failure to deduct TDS, no disallowance could be made u/s 40(a)(ia) of the Act.
FULL TEXT OF THE ITAT JUDGEMENT
This appeal filed by the assessee is directed against order of the Ld CIT(A)-24, Mumbai, dated 30/08/2017 and it pertains to Assessment Year-2011-12.
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