SLACK TECHNOLOGIES LIMITED vs ASSISTANT COMMISSIONER OF INCOME TAX

Whether the subscription fee received by the assessee from Indian customers for access to the Slack software/platform is in the nature of royalty under Section 9(1)(vi) of the Income Tax Act, 1961 and Article 12(3) of the India-Ireland DTAA --- Held No; the receipts are not royalty and, in the absence of a permanent establishment, are not taxable in India as business receipts. Whether there was transfer of the right to use copyright or any process embedded in the software to subscribers --- Held No; subscribers received only a limited non-exclusive right to access/use the platform, and the assessee itself used the processes to render services. Whether the Assessing Officer was justified in treating the subscription receipts as royalty --- Held No; the additions were directed to be deleted.