i) Whether payment for software license (as a vendor) for the purpose of resale to customers constitutes payment of a royalty.

ii) Whether payment of software license for own in-business use without a right to make copies of a license constitutes payment of royalties

Withholding Tax on Software Imported

i) That the Respondent erred in law and fact in their definition of the term royalty leading to an erroneous classification of purchase price for software as royalty payment.

ii) That the Respondent erred in law and fact by constituting the consideration paid for software as payment for the use of copyright.

iii)That the Respondent erred in law and fact by classifying the consideration paid for purchase of software classified as software for resale and shrink-wrapped software as royalties in "APPENDICIES Land M" in this appeal as royalties.

iv) That the Respondent erred in law and fact by disallowing interests.

In view of the elaborate analysis we find as follows;

i) The payment made by the Appellant as consideration on account of supply of software products to end-user customers results in payment in the nature of Royalty and therefore comes under the ambit of sections 2 and 35 of the Income Tax Act. We are therefore in agreement with the Respondent.

ii) Secondly the Appellant procured a computer program to be used in it's business and was allowed to use the software for its own use but failed to demonstrate that it was not permitted to loan/sale/sub-License the software to any third party.

By reason of the foregoing the Appeal herein is dismissed with no orders as to costs.