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13. We have given a thoughtful consideration to the facts of the case and are of the considered view that as per the Explanation 4 of Section 9(1)(vi), as had been made available on the statute vide the Finance Act, 2012, w.r.e.f 01.06.1976, it has been clarified that „royalty‟ takes within its sweep any amount paid in lieu of transfer of all or any rights in respect of any right, property or information, which shall include and has always included transfer of all or any „right for use‟ or „right to use‟ a computer software (including granting of a licence), irrespective of the medium through which such right is transferred. We find that the assessee had during the year under consideration made a payment towards renewal of SAP licence for two years, but however had not deducted tax at source in respect of the same. We find that the fees paid by the assessee for renewal of the SAP licence for a period of two years, therein only vested with it the rights which were limited to those necessary to enable it to use the software only for its own business, for the aforesaid period of two years, and in no way vested with it any right to loan/rent/sale/sub-licence or transfer the copy of software to any third party. Thus to be brief and explicit, the grant of the aforesaid licence to the assessee specifically prohibited the latter from copying, decompiling, de-assembling or reverse engineering the software. That all the incorporeal rights in respect of the software remained with the owner and were not transferred to the assessee. We have deliberated on the issue under consideration and are of the considered view that the assessee while making the payment towards renewal of SAP licence, had only acquired a copy of the copyrighted article, whereas the copyright remained with the owner. We are of the considered view that as the assessee company by making the payment towards renewal of licenses fees had merely acquired a computer programme for being used in its business, and no right is granted to it to utilize the copyright in respect of the aforesaid programme, therefore, what had been acquired by the assessee cannot be characterized as being in the nature of „royalty‟. We have given a thoughtful consideration to the issue P a g e | 15 Metro Shoes Ltd. Vs. ITO A.Y's. 2009-10 to 2012-13 before us, and are of the view that pursuant to the payment of the aforesaid amount for renewal of SAP licence, what is transferred to the assessee is neither the copyright in the software, nor the use of the copyright in the software, but what is transferred is the right to use the copyrighted material or article, which is clearly distinct from the rights in a copyright. Thus, now when the right that is transferred to the assessee company is not a right to use the copyright, but is only limited to the right to use the copyrighted material, therefore, the same cannot be characterized as a payment towards „royalty‟ by the assessee company. We find that our aforesaid view stands fortified by the judgment of the Hon'ble High Court of Delhi in the case of DIT Vs. Infrasoft Ltd. (2013) 39 taxmann.com 88 (Del).

14. We further find that the coordinate bench of ITAT, Mumbai, in the case of DDIT Vs. Reliance Industries Ltd. [ITA(s). Nos.1980 - 1982,1884,1986,2523,2529/Mum/2008, dated 26.05.2016, had further observed that as the Explanation 4 of Section 9(1)(vi) had been inserted by the Finance Act, 2012 w.r.e.f 01.06.1976, vide which consideration paid for the right for use or right to use a computer software (including granting of a licence) is to be deemed to fall within the sweep of the term „royalty‟ u/s. 9(1)(vi) of the „Act‟, being clarificatory in nature is to be taken as had always been available on the statute, however, the fact that the aforesaid position of law was not available at the time when the assessee had made the payments towards purchase of the software, nor there was any such judgment of any Court on the basis of which a payment made by an assessee towards purchase of software could be construed as „royalty‟ u/s. 9(1)(vi) and subjected to deduction of tax at source, therefore, the assessee who remained under a bonafide belief that no tax at source was deductible in respect of the said amount, thus could not be held as being in default for having failed to have deducted tax at source u/s. 194J at the time of making of the aforesaid payment. We respectfully follow the aforesaid judgment of the Hon'ble High Court of Delhi in the case of Infrasoft Ltd. (supra), and finding ourselves as being in agreement with the aforesaid view arrived at by the coordinate bench of Tribunal in the case of Reliance Industries Ltd.