Outright purchase of plant know-how in the form of technical / engineering data, design, drawings is not royalty subject to withholding taxes

Himachal Pradesh High Court holds that Outright purchase of plant knowhow in the form of technical / engineering data, design, drawings etc. is not royalty / fee for technical service, subject to withholding taxes. The Assessee company is in the business of manufacturing audio magnetic sound heads used in a variety of audio systems. It entered into an agreement with a Singapore Company (M/s Sankyo Seiki Pvt Ltd.) for supply of plant knowhow and product knowhow. Supply of plant knowhow includes delivery of technical and engineering data, design, drawings, sketches and photographs. The agreement...