Karnataka High Court
The Commr Of Income Tax vs M/S Ansys Software Pvt Ltd on 20 March, 2012
Bench: N.Kumar, Ravi Malimath
IN THE HIGH COURT OF KARNATAKA,
DATED THIS THE 20TH DA:'{"'OFIMI§ll§C}i:v Vi
PRESENT; 'is T} X
THE HON'BLE
THE HON'l3LE
1.The ConIIh._1fssi:d'nei'----of 'Income tax IrIteI'natiQnal.Ta2§atibn, RaStr_Vothan_a Bail.-ding, ;' Nrupaihu'nga Road, " B.a11galo1'e.v ~ ---------- --« * " I. 'l"lTe :vlnI::Vo*:(ne tax Officer, lSri.K.V.AraVind, Adv. for " --. l'rIt'fejrna.tional Taxation, 19(2), " Rastrothana Building, I T Nifiipathunga Road, Bangalore.
' Appellants M.V. Seshachala, Adv.) AND:
M / s.Amsys Software Private Limited, No.5, ll Floor, Crimson Court, V HAL III Stage, J eevanbhimanagaii, 1 Bangalore -560 075. T. _ ' 'C . R'e.spond.ent [By Sri A.Shankar and 'A.c_1Vocates)...v:§ This ITA is filed under-Section"v26Q'+A of I.T.Act, 1961 arising oui=._o'f order diatedv '.2,7V,O'V7.2OO6 passed in I.T.A No_,2323f[_BangA/2QO4},ijforythe assessment year 2003-2004;, praying. that "this Hon'ble Court may be .... .pleats'ed:;;:A_ foirnulate the substantial questions of law sVta.ted_thperein, etc. This appeal-.dc'oin_ing"'on for hearing, this day, N.KUMAR, J;,.. delivered the following:
has preferred this appeal _chali-engingifthe orders passed by the Income Tax :".v4.""--T;ribu4na1';'C.which has held that the consideration the assessee do not fall Within the mischief 'royalty' as defined under sub--clause [V] to \/ Explanation 2 to Clause [vi] of section Income--tax Act 1961.
2. In fact, the substa.ntiall.. which arises for consideration in this lapp'z'eallllarose'V.t' for consideration before .in"tlwo_.Eappeals, firstly, in the case of INCOME TAX AND ANOTHVERL; _p§Tie1i1vATIoNAL OLD LTD.,' in: ::1p5l,."2008 decided on 3.8.2:O'1"()' question of law was as 1,1I'ld'3I'I '-
"l/.V'he«ther»the consideration paid by the customers or end users to the it a foreign supplier, for transfer of to use the software/computer l programrrie in respect of the copyrights falls u)ithin the mischief of 'royalty' as defined '-- under sub--clause [v] to Explanation 2 to Clause [vi] of section 9[1] of the Act. "
3. Again in the case of 'COmmssIONER_1'-'OF INCOME TAX AND ANOTHER -vs-_._'. ---- ELECTRONICS PRIVATE H " :vyIT;4:x''l 1' No.2808/2005 and connectedVnilattersriaelciaelti'~:é1i._V 15.10.2011, the is as under:
question' Court will 4 facts and circlzzrzstéiageéé O the ITAT was ' thatluthev amOunt[s] paid by the foreign software supplierslllugaslyriotjfrbyalty' and that the same gt "did not ri;-selto any 'income' taxable in Ifidi"a.'and,lvtherefore, the appellant[s] was not 1 _ "liable torieduct any tax at source?"
V In both the Cases, it was held that Consideration paid by the Indian Customers or end users to the assessee -- a foreign supplier, for transfer of \i/ Qgwa the right to use the software / computer "_iI1 respect of the copyrights falls within the 'royalty' as defined under subjciause [V] a i 2 to Clause [vi] of section 9[1]1°o_f 1961.
5. In View decluared by this court, the substantial. in this case is the revenue and against " V' i V __ 7 A L " ..... Sd/..
JUDGE sd/-
JUDGE