Provision of section 9(1)(vi) of IT Act 1961 on royalty on sale of software

Last updated: 14 August 2013

Court :
INCOME TAX APPELLATE TRIBUNAL

Brief :
The assessee has impugned action of learned Dispute Resolution Panel (‘DRP’) confirming the additions proposed by the Assessing Officer in the draft assessment order as against the returned income by holding that the revenue earned by the assessee from sale of Microsoft software products to the Indian distributors is taxable in the hands of the assessee as royalty under the provisions of Section 9(1)(vi) of the Income-tax Act, 1961. This action of the learned DRP has been questioned on several grounds. Besides, the assessee has also questioned initiation of penalty proceedings under Section 271(1)(c) of the Act and levy of interest under Section 234B of the Act.

Citation :
M/s Microsoft Regional Sales Corporation, USA C/o Mr.Ashwin Ravindranath, Partner, SRBC & Associates, Golf View Corporate Tower B, Sector-42, Sector Road, Gurgaon, Haryana. PAN: AADCA1638A.(Appellant) Vs. Additional Director of Income-tax, International Taxation, Range-3, New Delhi. (Respondent)