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very broad to cover consideration paid for any right, property or information used or services utilized for the purpose of business or profession. Further, we find that the said clauses (a), (b) & (c) of section 9(1) (vi), are not properly worded. To gather as to what payment made by the Indian resident to a foreign resident would constitute royalty, one requires to draw inference from the wording of exception to clause (b). Even, if we draw inference from the exception under clause (b) read with the wording in clause (c) which is in relation to a payment made by a non resident, even then, what the 'royalty', under the Act, 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. Further, vide various explanations introduced subsequently; the above definition of the 'royalty' has been further expanded. '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‟ under section 9(1)(vi) of the Act. The term 'literary work' has been separately mentioned under clause (v) to "Explanation 2"to include the consideration paid for the same within the scope of royalty, whereas, the „Explanation 4‟ has broadened the scope of clauses (a) (b) and (c) of section 9(1)(vi) to include „computer software‟ under the definition of "right", „property‟ or „information.‟ Hence, the computer software has been recognized as a separate item not only in 2nd proviso to clause (vi) but in „Explanation 4‟ also and has been included in the definition and within the scope of the words „right‟, „property‟ or „information‟ as provided under clauses (b) and (c) to section 9(1)(vi) . The term „computer software‟ has not been included in the meaning and scope of the term "literary work‟ under clause (v) to Explanation 2. It is also pertinent to mention here that the consideration paid for „computer software‟ has not been specifically included under the definition of royalty under the DTAA.

Art 3. (2.) As regards the application of the Agreement by a Contracting State, any term not defined therein shall, unless the context otherwise requires, have, the meaning which it has under

the law of that State concerning the taxes to which the Agreement applies.

25. Hence, the first question before us, at this stage, is as to whether the term literary work' as mentioned in the definition of royalty in the treaty would include software' or not?

We note that the term 'Literary work' covers work, which is expressed in print or writing irrespective of the question of its literary merit or quality. It must be expressed in some material form, i.e. writing or print or in some form of notation or symbols, which means in a form capable of either visually or audibly recreating the representation of the original work. As per the provisions of section 2(o) of the Indian Copyright Act, 1957, the term literary work includes computer programs, tables and compilations including computer data base. Therefore, the computer software has been recognized as a literary work in India, if they are original intellectual creations.

Provided that such commercial rental does not apply in respect of computer programmes where the programme itself is not the essential object of the rental. ........................

36. 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 such as to reproduce the work, to issue copies, to make translation or adaptation, to sell or give on commercial rental in respect of a work. The internal use of the work for the purpose it has been purchased does not constitute right to use the copy right in work. Our above view also finds support from certain other provisions of the Copyright Act, which we discuss in the following paras.

and legally obtained copy from non-commercial personal use, have been excluded from the definition of infringement of 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.

41. 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 provisions of Income Tax to define the scope of "Literary Work‟, then perhaps the „computer software‟ will be out of the scope of the term royalty as defined under the DTAA. 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.