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4.6 On merits of the case, the Ld.AO based on the decision of Coordinate Bench of this Tribunal in case of Vodafone South Ltd. vs. DIT reported in (2015) 53 taxmann.com 441 held that the payment was liable for TDS u/s. 195.

4.7 On receipt of the draft assessment order, assessee filed objections before the DRP. The DRP upheld the view of the Ld.AO by observing as under:

"2.6.12 In this regard as discussed in detail in preceding paras the payments in the nature of Interconnect charges made by VSL are not in the nature of business income. On the other hand, such receipts constitute Royalty and taxable u/s. 9(1)(vi) of the I.T. Act,1961 as well as per the provisions of DTAA between India and Netherlands. To elaborate further, with a view of get over the rulings which favoured the stand of the taxpayers on the issue of "Royalty", the Finance Act, 2012 made a series of retrospective amendments to nullify various rulings involving interpretations pertaining to the definition of 'Royalty'. It has now been clarified that irrespective of the medium through which the transfer of all or any rights for the use or right to use computer software (including granting of license) would take place, the same would be treated as 'Royalty'. The law has been amended similarly to provide that the term "process" would include and shall he deemed to have always included transmission by IT(IT)A Nos. 201 to 204/Bang/2023 satellite (including up-linking, amplification, conversion for down-linking of any signal), cable, and optic fibre or by any other similar technology, whether or not such process is secret.