Data Processing Cost reimbursement did not constitute ‘Royalty’

DCIT Vs KBC NV (ITAT Mumbai) The issue involved in this ground of appeal i.e., data processing cost paid to head office is in the nature of royalty as per Clause-3, Explanation 1 to Section 9(1)(vi) of the Income Tax Act, 1961 which is liable for withholding tax u/s.194J of the Income Tax Act, 1961 has been the subject matter of discussions by the Co-ordinate Benches of ITAT in assessee’s own case for the A.Y.2012-13. The Co-ordinate Bench, after considering relevant provisions of the Act, and also scope of Article 12(3)(a) of DTAA between India and Netherlands held that data processing cost...