A division bench of the Delhi High Court has upheld the order of the Delhi bench of the Income Tax Appellate Tribunal (ITAT) that the income from the supply of CAS and middleware products to Indian customers does not fall under the ‘royalty’ under the India- Swiss DTAA.
The appellant-Revenue contended that the ITAT has erred in holding that the income from supply of CAS and middleware products to Indian customers, does not fall under the ‘royalty’ as defined under Section 9(l)(vi) of the Income Tax Act, 1961 and Article 12(3) of the India- Swiss DTAA. The questions of law urged in the present appeal are covered by the decision of the Supreme Court in the case of Engineering Analysis Centre of Excellence Pvt. Ltd. Vs. CIT 432 ITR 471 SC. It was further contended that the revenue has not accepted the decision in Engineering Analysis (supra) and has preferred a review petition against the same.
Justice Manmohan and Justice Manmeet Pritam Singh Arora dismissed the appeal and held that though the review petition in Engineering Analysis (supra) is pending before the Supreme Court, yet there is no stay of the said judgment till date.
“Consequently, in view of the judgments of the Supreme Court in Kunhayammed and Others Vs. State of Kerala And Another, (2000) 6 SCC 359 and Shree Chamundi Mopeds Ltd. Vs. Church of South India Trust Association CSI Cinod Secretariat, Madras (1992) 3 SCC 1, the present appeal is covered by the judgment of the Supreme Court in Engineering Analysis,” the Court said.
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