Software purchased across the counter as shrink proof software is not akin to royalty

Opus Software Solutions Pvt. Ltd. Vs ACIT (ITAT Pune) The issue which arises in the present appeal is whether the deduction claimed by assessee on purchase of licensed software is to be allowed as deduction in the hands of assessee or not. The Revenue authorities were of the view that purchase of licensed software by the assessee is akin to royalty and the assessee was duty bound to deduct tax at source. Since the assessee has failed to deduct tax at source, expenditure was disallowed in the hands of assessee. In this regard, the CIT(A) had placed reliance on the ratio laid down by Pune Bench ...