Karnataka High Court
The Commr Of Income Tax vs M/S Sasken Communications Tech Ltd on 1 March, 2012
Bench: N.Kumar, Ravi Malimath
son 88" Cross, HAL II Stage, » Bangalore - 560 038. ..RESPONDENT _s Advocates) IN THE HIGH COURT OF KARNATAKA AT BANGALORE DATED THIS THE 1$° DAY OF MARCH 2012... ° : PRESENT THE HON'BLE MR.JUSTICE.N.KUMAR © AND THE HON'BLE MR.JUSTICE, RAVI MALIMATH ITA.NO.1266 OF 2006 BETWEEN: ; 1. The Commissioner of Income - "Tax: . International Taxation, 8 Rastrothana' Buiiding, Nrupathungea Road, Bangalore. « : 2. The Income Tax Office | TDS-t, Rastrothiana Bull i ding, Nrupathunga Road, Bangalore. Oe .. APPELLANTS (By Sti. K, v. Aravind, Advocate) AND: M/s. Sasken. Cormmunicat ons Tech Ltd., -No.3008, '12"°B Ma _ (By Sri K.P.Kumar, Sr.Counsel for M/s.King & Patridge, Se KORE a we Bo This ITA filed under section 260-A of I.T.Act, 4961 arising out of order dated 16.05.2005 passed <in ITA.No.62/Bang/2002 for the Assessment year 2000-01 praying to formulate the substantial questions of laws. stated therein, allow the appeal and set asi side» the. order dated 16.05.2005 confirm the order 'of "the: Appel late Commissioner confirming the order passed by: the. income: Tax Officer-TDS-1, Bangalore. This ITA coming on for heari ing this day, NLKUMAR l., delivered the following:- a JUDGMENT
order passed by: the Tribunat, which has. granted relief to the assessee. ~
2. . . In fact, the substantial question of law which arises for "eonsideration" in this appeal arose for . 'consideration: before this court in two appeals, firstly, in 'the case 'of 'COMMISSIONER OF INCOME TAX AND | ANOTHER v. SYNOPSIS INTERNATIONAL OLD LTD.,' Soin ITA Nos.11 to 18/2008 decided on 3.8.2010 where os tie substantial question of law was as under:
ae"
v _.
_ 2 { lad I "Whether the consideration paid by the Indian customers or end users to the assessee ©. : ~ a foreign supplier, for transfer of the right.to - use the software/computer programme iy. : a respect of the copyrights falls within' the"
mischief of 'royalty' as defined. under sub- no clause [v] to Explanation. 2 to Cla Clause [ [vil OF section 9[1] of the Act." . ,
3. Again in the: case of 'COMMISSIONER OF INCOME TAX AND "ANOTHER, "y. . SAMSUNG ELECTRONICS. : PRIVATE" "LIMITED" in ITA No. 2808/2005 'and connected imatters decided on 15.10. 2011, the supstant) ial | questi on of law framed was as under:
| "The questicn which the High Court will "answer. is whether on facts and circumstances
-- of the case, the ITAT was justified in holding _ that the amount[s] paid by the appellant{[s/ to . the foréii gn 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 liable to deduct any tax Sy _ at source?"
4, In both the cases, it was held thatthe consideration paid by the Indian customers or end. users to the assessee - a foreign supplier, for transfer of the. ne right to use the software/computer programme i in respect of the . copyrights falls within the mi ischief of " oya ty' as defir: se under sub-clause [v] to Explanatio on 2 to. Clause Wi) of section 9[1] of the Inconie Tax Act; 196%.
5. In view of the aforesald law declared by this court, the substantia | questions of law . framed in this case are also answered % m favour of the revenue and against the assessee.
6. Appeal is. allowed.