Case Law Details
Prolific Research Pvt. Ltd Vs DCIT (ITAT Ahmedabad)
ITAT Ahmedabad held that the transfer of copyright including the right to make copy of software for international business, any payment made in that regard would constitute ‘Royalty’. Thus, TDS is deductible u/s 195 on the payment made by the assessee to the non-resident supplier.
Facts-
The assessee is a company is engaged in the business of collecting market research data and conducting surveys/interviews in the different countries based on project specifications provided by its clients. In consideration, it receives payments on Cost Per Interview (CPI) basis. For the purpose of preparation of questionnaire and survey design, the assessee log into the Web Portal of the NEBU, A Netherlands-based Company and utilizes its survey link for the purpose. The assessee company charges its customer for the survey data and the assessee made payments of Rs. 7,24,268/- i.e. Euro 8790 in 6 installments to NEBU of Netherland.
AO held that the combined reading of the meaning of hoisting charges as claimed by the assesse and the nature of services rendered by the NEBU of Netherlands makes it clear that the services which NEBU of Netherland renders to its clients are Royalty and Fees for Technical Services as defined u/s. 9(1)(vii) of the Act. Thus the assessee failed to withhold the tax before making payment to NEBU of Netherland.
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