Non-resident — Income deemed to accrue or arise in India — Payment to non-resident — Royalty — Amount paid for use and resale of computer software through distribution or end user licence agreement is not royalty — Not assessable in India.

24. (2025) 475 ITR 57 (Bom):

CIT(LTU) vs. Reliance Industries Ltd.:

Date of order 21.06.2024:

Section 9(1)(vi)

In its application as filed u/s. 195(2) of the Income-tax Act, 1961, the assessee raised contentions as to why remittance made to such foreign parties was not liable to be taxed as “royalty”, under the provisions of section 9(1)(vi) of the Act. Such application of the assessee was rejected by an order dated September 14, 2003 passed by the Deputy Director of Income-tax (International Taxation).

The Commissioner of Income-tax (Appeals) allowed appeal filed by the assessee. In the appeal filed by the Revenue, the primary issue which had arisen for consideration of the Tribunal was as to whether the remittance made by the assessee to foreign parties on account of purchase of certain computer software, required for the business of the assessee, would be liable to tax in India as “royalty” under the provisions of section