No TDS on reversal of Royalty Payment according to Government Policy

In the  Case of DIT v M/s Ericsson Communications Ltd. , Delhi High Court held that when the Industrial policy of Government of India mentions that there should be no royalty paid to the parent foreign collaborator company by the Indian wholly subsidiary company then the reversal of royalty payment was rightly done by the Assessee and there would be no income accrued. Hence, no TDS will be made.

Facts of the Case

The facts of the case are that the Assessee is a wholly owned subsidiary of

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