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 DAY"O'F« V PRESEN'1'lV.. THE HON'BLE MR.JUSTICE Vlxl./_K1ll\/[ARV
THE HON'B_LE MR.J1JS'lll§3.l3i\?IALIMATH 1 . The Con1InfisVsio'ne_f"*oi' Income tax lntsfnational' axaiion. Rastrothana Building, _; ' l\lrupath.1_inga Road, ' . . . . .
- tax Officer, A Ini<éi'national Taxation, V_Vard~~'---- 19(2), ..Ra_strothana Building, .. Nrupathunga Road, Bangalore.
~. Appellants (Sri.K.V.AraVind, Adv. for M.V. Seshachala, Adv.) \l/ AND:
M / s.Amsys Software Private Limited, . No.5, 11 Floor, Crimson Court, ._ HAL III Stage, J eevanbhirnanagar, Bangalore -560 075. ' A V. , .
(By Sri A. Shankar & SI7i_M.Lava,"pAdVocates)'--..
This ITA is filed under Se§:tion"2.,E)Q"--A of I.T.Act, 1961 arising outaof order.dateda_27;O7'.'2006 passed in I.T.A No.2321./iBAN/2004;. for assessment year 2003-2004,fpraying- ._thatf this Hon'ble Court may be pleased to the substantial questions t--of_l"aW' stated _ therei--n.,...e"tc.
Thlilsé hearing, this day, N.KUMAR, VJ,, rd€liV€'i'€:','d following:
lORDER has preferred this appeal _challe.ngii11g-the orders passed by the Income Tax "which has held that the consideration the assessee do not fall within the mischief 'royalty' as defined under sub--c1ause [V] to l/ Explanation 2 to Clause [vi] of section 9[1_'}~fo'_'f.l_lt1ie Income-tax Act 196 1.
2. In fact, the substavntialle.question'Ala}? which arises for consideration in this arose,"
for consideration before -tiyofiappeals, firstly, in the case of INCOME TAX AND ANon:m§V ii\r1fei§NATIoNAL ow LTD.,' hi5,/2008 decided on question of law was as under:
_ ff _ "Wi'1ether the consideration paid by the custorners or end users to the it --~ a foreign supplier, for transfer of L' to use the software/ computer ~~ lprovgramrne in respect of the copyrights falls Vu)ithin the mischief of 'royalty' as defined under sub-clause [u] to Explanation 2 to Clause [vi] of section 9[1] of the Act."
3. Again in the Case of INCOME TAX AND ANOTHER -vs- ELECTRONICS PRIVATE " f'_i'IT'A' ll No.2808/2005 and Connected} 1 5. 1 0.20 1 1, the substantiallV:'V:'question liranied if is as under:
' .?th_e 1 Co urt will 44 facts and the ITAT was tn bamount[s] paid by the 1' the foreign software suppliers Vwas'.'not:_'T.royalty' and that the same did rise to any 'income' taxable in India and, therefore, the appellant[s] was not _ deduct any tax at source?"
'In both the Cases, it was held that A consideration paid by the Indian customers or end K users to the assessee -- a foreign supplier, for transfer of 92/ the right to use the software/computer pr0gra1hiu_e~».jn respect of the copyrights falls within A 'royalty' as defined under sub~c].ause4[v§ H2
2 to Clause [Vi] of section 9[1] 1961.
5. In View by this court, the subs_tantie11.-- in this cases is 44 the revenue and against : .
._ 7 .A Appvealhéié = _____ JUDGE Sd/-
JUDGE db»?