Section 195 Payment towards Import of Software Amounts to Royalty

Telecomone Teleservices India Private Limited Vs DCIT (ITAT Bangalore)

Thus the only issue involved is whether the consideration paid for import of software can be capitalised. The amount paid to obtain computer software cannot be added to the block of assets of computer as the jurisdiction High Court has held that the nature of payment for computer software is that of Royalty. Accordingly, the assessing officer is directed to treat the expenditure on royalty as revenue expenditure. Further, since assessee failed to deduct tax at source U/S 195/194J in relation to

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