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Explanation 4.--For the removal of doubts, it is hereby clarified that the transfer of all or any rights in respect of any right, property or information includes 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.

Explanation 5.--For the removal of doubts, it is hereby clarified that the royalty includes and has always included consideration in respect of any right, property or information, whether or not--

(a), (b) & (c) of section 9(1) (vi), the wording is somewhat vague and negatively written. Even, if we apply and read the negatively written wording in clause (c) in relation to a payment made by a non resident into the clause

(b), i.e. in relation to payment made by a resident Indian and read the clause(b) in terms of clause(c), even then what the 'royalty' may constitute will be the income payable in respect of any right, property or information used or services utilized for the purpose of business or profession by such resident to a non resident. However, vide explanation 2 the vast definition provided in sub clauses (a), (b) & (c) of section 9(1) (vi), have been restricted only to the consideration paid for the items as mentioned (i) to (vi) of Explanation 2. However, 'Explanation 4' inserted by Finance Act, 2012, provides that the transfer of rights in respect of any right, property or information includes and has always included the right for use or right to use a computer software including granting of a license. We find that so far as Income Tax Act is concerned, 'computer software' has neither been included nor is deemed to be included within the scope or definition of 'literary work' in any definition or explanation provided under the Act. The term 'literary work' has been separately mentioned under clause (v) to Explanation 2 to include the M/s. Capgemini Business Services (India) Ltd.

44. A perusal of the above provisions of the copyright Act reveals that the computer software is included in the definition of literary work and is covered under the purview and scope of copyright. The exclusive rights to do or authorize the doing of certain acts as mentioned in clause (a) and clause (b) of section 14 vests in the owner of the work and as per section 51 of the Act, M/s. Capgemini Business Services (India) Ltd.

copyright in a work shall be deemed to be infringed when any person without license granted by the owner of the copyright or in contravention of the conditions of a license so granted does anything, the copyright of the owner is stated to be infringed.

copyright. Even import of one infringed copy of the work for private and domestic work of the importer has been excluded from the scope of infringement of Copyright under the Act.

45. It is also pertinent to mention here that the Income Tax Act does not specifically include the 'computer software' in the term 'literary work' and under such circumstances, if we apply the same analogy to the treaty, then perhaps the 'computer software' will be out of the scope of the treaty. However, if we apply the Copyright Act, then the 'computer software' will have to be included in the term 'literary work' but to constitute 'royalty' under the treaty, the consideration should have been paid for the use of or the right to use the copyright in the 'literary work' and not the 'literary work' itself.