Mumbai's Income Tax Appellate Tribunal recently ruled on whether a payment for packaged off-the-shelf software constitutes a royalty payment under the 1994 India-Singapore income tax treaty.
The case involved Capgemini Business Services (India) Ltd. (Capgemini), which purchased packaged accounting software for its own use from a vendor resident in Singapore and claimed a deduction for the purchase. In reviewing Capgemini's return for the year concerned, the assessing officer took the positi…