The Income Tax Appellate Tribunal (ITAT) delivered its decision on 18 July 2012 in the case of Pinstorm Technologies Pvt. Ltd. v. ITO (ITA No. 4332/Mum/2009) that payments for uploading and displaying banner advertisements on the internet are not taxable as royalties.

(a) Facts. The Taxpayer (i.e. Pinstorm Technologies Pvt. Ltd.) was an Indian resident engaged in digital advertisi…