Indian Kanoon - Search engine for Indian Law

18. The learned Counsel for the assessee further submitted that the issue of taxability of Rs.52,55,881/- has to be considered both in terms of section 9(1)(i) and 9(1)(vi) of the I.T. Act and also DTAA between India and Netherlands. It was submitted that the assessee cannot meddle with the source code of the software in the process of customisation and it can bundle only its own software with the Small World Software utilising available facilities in the said Small Word Software. It was further submitted that the assessee has to purchase the said software each time it wanted to sell the bundled software to its customers and the assessee did not get any rights to the copyright to the said software. Further, the assessee did not obtain any license in respect of software purchased from GE Network Solutions, Netherland. It was submitted that there is no business connection at all between the assessee and the Netherlands company and they are not Associated Enterprises (AE) and the amount of Rs.52,55,881/- is simply the purchase cost of trading goods and not royalty payment and hence, there is no liability to deduct tax at source and section 40(a)(i) is not attracted.