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MANMOHAN, DINESH KUMAR SHARMA
Commissioner Of Income Tax International Taxation-2 – Appellant
Versus
Micro Focus Ltd. – Respondent
JUDGMENT
Manmohan, J . - Present appeal has been filed under Section 260a of the Income Tax act, 1961 (hereinafter referred to as 'act') for the assessment Year 2014-15 challenging the judgment and order dated 04th November, 2020 passed by the Income Tax appellate Tribunal, Delhi Bench 'D', New Delhi. The questions of law sought to be agitated by the appellant-Revenue in the present appeal are reproduced hereinbelow:-
'a. Whether on facts and circumstances of the case and in law, the ITaT erred in holding that receipts of the assessee from sale of software is not taxable as royalty under the India-UK DTaa?
B. Whether on the facts and circumstances of the case and in law, the ITaT was right in holding the Explanation 4 to Section 9(1)(vi) of the Income Tax act, 1961, would not apply to India-UK DTaa without considering the fact that Explanation 4 is reiteration of legislature view already expressed in Circular No.588 dated 2nd January, 1991 and Circular No.621 dated 19th December, 1991 which were issued prior to entry into force of India-UK DTaa?'
C. Whether the ITaT erred in not holding receipts of assessee as Royalty though as per Section 14(b)(ii) of India copyright act selling or
The principle of judicial discipline mandates that the High Court is bound to follow the judgment and order of the apex Court till it is set aside.
The High Court upheld the ITAT's ruling that software receipts are not taxable as royalty under the India-UK DTAA, following binding Supreme Court precedent.
Payments for software deemed to be for copyrighted articles are not taxable as royalty, as established by precedent concerning copyright transfer under tax law.
The interpretation of the Income Tax Act, Indo US DTAA, and Copyright Act, 1957 in determining the taxability of software licensing in India.
A licence conferring no proprietary interest on the licencee, does not entail parting with the copyright. Where the core of a transaction is to authorise the end-user to have access to and make use o....
Payments for software under licensing agreements do not constitute taxable royalty under Indian law, following precedent established by the Supreme Court.
Software licensing fees received by Indian distributors from foreign manufacturers do not constitute taxable royalty under the Income Tax Act and relevant treaties.
Licensing payments for software access do not constitute royalty and are not taxable under the Income Tax Act, affirming distinctions between rights of use and copyright transfer.
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