The Indian Income Tax Appellate Tribunal (ITAT) delivered a ruling dated 4 July 2008 in the case of Parsons Brinckerhoff India Pvt. Ltd. v. Assistant Director of Income Tax (2008-TIOL-375-ITAT-DEL) on whether the payment for an outright sale/supply of drawings and designs would be taxable in India as "royalty" and whether the payment can be taxed in India under a tax treaty even if such payment is not taxable under India's domestic tax laws. (a) Facts. The Taxpayer (i.e. Parsons Brinckerhoff India Pvt. Ltd.) was an Indian company which entered into a contract with Parson Brinckerhoff Asia Pvt. Ltd (PBAT),...