Karnataka High Court
The Commissioner Of Income Tax vs M/S Bses Telecom Limited on 21 February, 2012
Bench: N.Kumar, Ravi Malimath
IIGH COURT OF KARNATAKA HIGH COURT OF KARNATAKA HIGH COURT OF KARNATAKA HIGH COURT OF KARNATAKA HIGH COURT OF KARNATAKA HIGH C IN THE HIGH COURT OF KARNATAKA AT BANGALGRE DATED: 21" Day of February, 2012 PRESENT HON'BLE Mr. JUSTICE HN KUMAR AND: - HON'BLE Mr JUSTICE 1 RA Vi MALIMATH poor Tax Appeal No.121/2006 Between: 1. THE COMMISSIONEX OF INCOME. TAX C.R.BUILDING, QUEENS ROAD, BANGALORE- 260 O01, 2. THE DEPUTY COMMISSIGNSER OF INCOME TAX, COMPARY CIRCLE-4(1), C.E.BUILDING, QUEENS ROAD, oo BANGALORE . | . APPELLANTS a s . [By Sri K V Aravind, Adv] ad: | 7 SS - M/S BSES TELECOM LIMITED, °- NO.20, ST! CROSS, 5TH BLOCK, _ KORAMANGALA, BANGALORE. vas RESPONDENT
[NOTICE SERVED] THIS APPEAL IS FILED UNDER SECTION 260-A OF THE = INCOME TAX ACT, 1961, AGAINST THE ORDER DATED 19.08.2005 i GH COURT OF KARNATAKAHIGH COURT OF KARNATAKA HIGH COURT OF KARNATAKA HIGH COURT OF KARNATAKA HIGH COURT OF KARNATAKA HIGH COL 2 FASSED IN ITA NO.928/BANG/2002 FOR THE ASSESSMENT YEAR 2002-03 AND ETC., THIS APPEAL COMING ON FOR FINAL HEARING, Tas DAY, os N KUMAR, J., DELIVERED THE FOLLOWING: aa The Revenue has preferred this 'eppeal agairst tthe order passed by the Tribunal which has granted reliet to the assessee following the Judgment of the Tribunal dated 29.9.2005 in ITA No. 3707-37 110/ Pang! 2004 5 in the case of M/s. Hewlett-Packard dia] P Pvt. itd.
2. In fact, the substantia' question of law which ares for consideration in this, appeal arose for consideration before this court im two aypeals, firstly, in the case of 'COMMISSIONER OF INCOME TAX AND ANOTHER vw. SYNOPSIS INTERNATIONAL OLD LTD,' in TTA Nos.11 to a 15/2008. decided on 3.8,2010 where the substantial 7 question of} iaw was as under:
: 7 "Whether the consideration paid by the _aindim customers or end users to the assessee -- a foreign supplier, for transfer of the right to use the a _ Software/camputer programme in respect of the copyrights falls within the mischief of 'royalty' as Le if KARNATAKA HIGH COURT OF KARNATAKA HIGH COURT OF KARNATAKA HIGH COURT OF KARNATAKA HIGH CC IGH COURT OF KARNATAKA HIGH COURT i 3 defined under sub-clause [vu] to Explanation 2 to Clause [ui] of section 9[1] of the Act.' a
3. Again in the case of 'COMMISSIONER OF INCOSE TAX AND ANOTHER v. SAMSUNG ELECTRONICS PRIVATE.
LIMITED in ITA No.2808/ 2005 and. 'connected matters - | decided on 15. 10. 2011, the substantial question, of law | framed is as under: oO _ "The question which the High Court will answer is -- tonether on facts and circumstances of the case, the ITAT was justified in holding that the amourufs] paid by the appellant{s}] to the 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 Hable t te deduct ay tax at source?"
4, in both the 'Cases, it was held that consideraton paid 1 by the Indian customers or end users to the assessece - a foveg supplier, for transfer of the night to use the 7 software; computer programme in respect of the copyrights als wit thin the mischief of royalty' as defmed under sub- "as - clause [vj to Explanation 2 to Clause fvi] of section 9[1] of the Income Tax Act, 1961. le GH COURT OF KARNATAKAHIGH COURT OF KARNATAKA HIGH COURT OF KARNATAKA HIGH COURT OF KARNATAKA HIGH COURT OF KARNATAKA HIGH COL 4
5. In view of the aforesaid law declared by this court, the substantial questions of law framed in this case are alse - answered in favour of the revenue and against the dinceaee. | ss,
6. Ordered accordingly.
7. Appeal is allowed. | MP/-