Payment towards leasing/ hiring of equipment doesn’t constitute royalty

Spicejet Limited Vs Addl. CIT (ITAT Delhi) ITAT Delhi held that payment towards leasing/ hiring of the equipment will not constitute a royalty under the provisions of the India – Netherlands Double Taxation Avoidance Agreement (DTAA). Facts- AO noticed an amount of Rs. 1,32,00,000/- was paid to KLM Engineering and Maintenance towards leasing of rotables and repair work. Being of the view that the payment made is in the nature of royalty, on which, assessee was required to withhold tax under section 195 of the Act, AO made disallowance under section 40(a)(i) of the Act. The assessee contested...