Case Law Details
Norton Lifelock Inc. Vs DCIT (IT) (ITAT Pune)
Conclusion: Income earned by assessee from sale of software, either directly to the customers in India or through Distributors or Resellers constituted its business income and not the Royalty income. As admittedly assessee did not have any Permanent Establishment in India, such income will not magnetize Indian taxation.
Held: Assessee earned revenue from sale of software licenses in India including certification and software for authentication business which was claimed as not chargeable to tax in the absence of it having any Permanent Establishment (PE) in India. AO held that such income should be treated as “Royalty” under the Income Tax Act, 1961. It was held that it was not as if the Distributors or the Resellers acquire any right from the assessee to copy the software and then exploit it commercially. Their transactions were confined to purchasing specific Symantec Products from the assessee and then eventually selling the same to the end customers in India. There was no qualitative difference between the direct sales made by assessee to its customers in India, which had already passed the scrutiny by Tribunal in assessee’s own case for earlier year and the sales made by assessee through the Distributors or the Resellers. In both the sets of circumstances, it was only one-to-one sale of the Symantec Products by assessee and at no stage the right to use the copyright in the software was licensed either to the Distributor or the Reseller. Tribunal held that the income earned by assessee from sale of software, either directly to the customers in India or through Distributors or Resellers constituted its business income and not the Royalty income.
FULL TEXT OF THE ORDER OF ITAT PUNE
This appeal by the assessee lays challenge to the final Assessment Order dated 23-08-2017 passed by the Assessing Officer (AO) u/s.144C(13) read with section 143(3) of the Income-tax Act, 1961 (hereinafter also called ‘the Act’) in relation to the assessment year 2014-15.
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