Karnataka High Court
The Commissioner Of Income Tax vs M/S Rational Software Corpn (India) Ltd on 21 February, 2012
Bench: N.Kumar, Ravi Malimath
IGH COURT OF KARNATAKA HIGH COURT OF KARNATAKA HIGH C ek a -
HRUPATUNGA ROAD, BANGALORE. H COURT OF KARNATAKA HIGH COURT OF KARNATAKA HIGH COURT OF KARNATAKA IN THE HIGH COURT OF KARNATAKA AT BANGALORE DATED: 21% Day of February, 2012. _ PRESENT 7 HON'BLE Mr. JUSTICE N KY MAR. AND HON'BLE Mr. JUSTICE RAVI MALIMATH income Tan appl Na 2741 2006 IN INCOME. TAX APPEAL LO 127612006 Between: = |
1. 'THE COMMISSIONER OF INCOME-TAX INTERNATIONAL TAXATION,
-. RASTROTHANA BUILDING, . BRUPATURGA. ROAD, . "BANGALORE. | as "aE INCOME TAX OFFICER, INTERNATIORAL TAXATION,
---WARD-19(2},
-. RASTROTILANA BUILDING, . APPELLANTS [By Sri K V Aravind, Adv.j L-
GH COURT OF KARNATAKAHIGH COURT OF KARNATAKA HIGH COURT OF KARNATAKA HIGH COURT OF KARNATAKA HIGH COURT OF KARNATAKA HIGH COL And:
_M/{S.RATIONAL SOFTWARE CORPORATION INDIA LTD.
NO.3K, ESTEEM ASRANI, KO RAMANGAL INDUSTRIAL LAYOUT, SARJAPURA ROAD, BANGALORE. RESFOR DENT [By Smt. Vani.H. Advocate) THIS APPEAL IS FILED UNDER SECTION 260-4. OF THE INCOME TAX ACT, 1961, AGAINST INE ORDER DATED 27.07.2005 PASSED IN ITA NO. 60/BANG/2005 FOR THE ASSESSMENT YEAR 2002-03 AND ETC., IN INCOME TAX APPEAL W0.374/200€ Between: | es lL. THE COMMISSIONER OF INCOME: TAX INTERRATIGNAL TAXATION, =~ RASTROTHANA BU: LDING, _ NRUPATUNGA ROAD. -
3. THE INCOME TAX OFFICER.
INTERNATIONAL TAXATION, WARD-19(2), _. RASTROTHANA BUILDING,
-. NRUPATUNGA ROAD, BANGALORE. 2 Lo . APPELLANTS *\ [By Sri K V Aravind, Adv,] And:
es My. DATIGNAL SOFTWARE CORPORATION INDIA LTD.
"NO.3K, ESTEEM ASRANI, . KORAMANGAL INDUSTRIAL LAYOUT,
- SARJAPURA ROAD, BANGALORE.
RESPONDENT uf r IGH COURT OF KARNATAKA THGE COURT OF KARNATAKA HIGH COURT OF KARNATAKA HIGH COURT OF KARNATAKA HIGH COURT OF KARNATAKA HIGH Ci 3 [BY Smt. Vani.H. Advocate) THIS APPEAL IS FILED UNDER SECTION 260-A OF . THE INCOME TAX ACT, 1961, AGAINST THE ORDER DATED 37.07.2695 ~ PASSED IN ITA NO. 58/BANG/2005 FOR THE ASSESSMENT. YEAR Bo 2000-01 AND ETc., THESE APPEALS COMING ON FOR FINAL BEARING, THIS DAY, : N KUMAR, J., DELIVERED THE FOLLOWING.
The Revenue has preferred this appeal against the order passed by the Tribunal which has. granted relief to the assessee following the Judgment of the | 'Tribunal dated 29.9.2005 in ITA No. 3707-375 10/ Bass) 2004 in the case of M/s. Hewlett-Packard | Daatial Pt. Lid.
2. In fact, the sauna S wmntion of law which arises for consijeration in. this appeal arose for consideration before thie court m two appeals, firstly, in the case of CoMmenssroNS or INCOME TAX AND ANOTHER vw. | SENOPSDS INTERNATIONAL OLD LTD.,' in ITA Nos.11 to 15/2908. decided on 3.8.2010 where the substantial ~ * question of law was as under: | GH COURT OF KARNATAKAHIGH COURT OF KARNATAKA HIGH COURT OF KARNATAKA HIGH COURT OF KARNATAKA HIGH COURT OF KARNATAKA HIGH COL 4 "Whether the consideration paid by the --. Indian customers or end users to the assessee-a Joreign supplier, for transfer of the right to use the software/computer programme in respect of the = copyrights falls within the mischief of royalty' as defined under sub-clause [vu] to Explanation 2 fo Clause {vi} of section S{1] of the Act." ae
3. Again in the case of (COMMIBSIONER OF INCOME TAX AND ANOTHER w. SAMBUNG ELECTRONICS PRIVATE LIMITED' in ITA No.2808/ 2008 and connected inatters decided on 15. 10. 2011, the substantial "question of law framed is as under: 7 | "The question which the. High Court will answer is -- whet 'her on facts and circumstances of the case, the ITAT was pestified in hotding frat the amcunt{[s] paid by tie appellant{s} to foreign software suppliers was not 'royalty' and that. the same did not give rise to any 'income'
-. taxable in India and, therefore, the appellant{s} 'was not lable to deduct any tax at source?"
4. tn boti: the cases, it was held that consideration . paid by the Indian customers or end users to the agsesace - ke foreign supplier, for transfer of the right to use the _ software/ computer programme in reapect of the copyrights "falls within the mischief of 'royalty' as defined under sub- | -
IGH COURT OF KARNATAKA HIGH COURT OF KARNATAKA HIGH COURT OF KARNATAKA HIGH COURT OF KARNATAKA HIGH COURT OF KARNATAKA HIGH CC 5 clause [v] to Explanation 2 to Clause [vi] of section 9[1] of the Income Tax Act, 1961.
S. In view of the aforesaid law declared by this court, mo the substantial questions of law framed iri this vase are also answered in favour of the revenue aid against the assessce.
6. Ordered accordingly. 7
7. Appeals are allowed. 7 . ; 7 |