M/S Astral Systems India Pvt Ltd., vs The Commissioner Of Income Tax
2021 Latest Caselaw 1989 Kant

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     IN THE HIGH COURT OF KARNATAKA AT BENGALURU

          DATED THIS THE 26TH DAY OF MAY, 2021

                         PRESENT

         THE HON'BLE MR. JUSTICE ALOK ARADHE

                           AND

THE HON'BLE MR. JUSTICE HEMANT CHANDANGOUDAR

                   I.T.A. NO.413 OF 2014


BETWEEN:

M/S ASTRAL SYSTEMS INDIA PVT LTD.,
NO.1348, 4TH MAIN, I STAGE
PHASE II, CHANDRA LAYOUT
BANGALORE REPRESENTED BY ITS DIRECTOR
SMT.MRS. BHARATHI KUMAR                      ... APPELLANT

(BY SRI. ATUL K. ALLUR, ADVOCATE.)

AND:

1.    THE COMMISSIONER OF INCOME- TAX
      C.R. BUILDING, QUEENS ROAD
      BANGALORE-560 001

2.    THE INCOME -TAX OFFICER WARD 11(1)
      BANGALORE
                                           ... RESPONDENTS
(BY SRI. K.V. ARAVIND, ADVOCATE.)
                             ---
      THIS I.T.A. IS FILED UNDER SEC. 260-A OF INCOME TAX
ACT 1961, ARISING OUT OF ORDER DATED 09.05.2014 PASSED
IN ITA NO.704/BANG/2013 FOR THE ASSESSMENT YEAR 2007-08,
PRAYING TO:

     (i) FORMULATE THE SUBSTANTIAL QUESTIONS OF LAW AS
STATED ABOVE.
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     (ii) TO ALLOW THE APPEAL AND SET ASIDE THE ORDER OF
THE    INCOME     TAX   APPELLATE    TRIBUNAL    IN  ITA
No.704/BANG/2013 DATED 09.05.2014.

     THIS I.T.A. COMING ON FOR HEARING,         THIS     DAY,
ALOK ARADHE J., DELIVERED THE FOLLOWING:

                        JUDGMENT

This appeal under Section 260A of the Income Tax

Act, 1961 (hereinafter referred to as the Act for short)

has been preferred by the assessee against the order

dated 9.5.2014 passed by the Income Tax Appellate

Tribunal, Bangalore. The subject matter of the appeal

pertains to the Assessment year 2007-2008. The appeal

was admitted by a bench of this Court vide order dated

15.12.2014 on the following substantial questions of

law:

"a. Whether on the facts and circumstances on case the Tribunal was justified in treating the simple sale as Royalty under section 9(1)(vi) of the IT Act.

b. Whether on the facts and circumstances on case the Tribunal was justified in confirming the order passed u/s. 1543(3) of the I.T.Act.

c. Whether on the facts and circumstances of the case the Tribunal was right in coming to

the conclusion that, Section 195(1) of the IT act, is applicable to the regular sale.

d. Whether on the facts and circumstances of the case the TGribu nal was right in treating the payment made for purchase of software would be termed as Royalty Payment and would, therefore constitute income chargeable under the IT Act.

e. Whegther on the facts and circumstances of the Tribunal was right over looking the Circular issued by the CBDT.

f. Whether on the facts and circumstances of the case the Tribunal was right in applyikng the judgment ofd the M/s.Samsung Electronics Co. Ltd, to the appellant case.

g. Whether on the facts and circumstances of the case the Tribunal was right in disallowing the purchases under section 40(a)(i) of the I T Act."

2. When the matter was takenup today, the

learned counsel for the assessee submitted that

aforesaid substantial questions of law have already been

answered in favour of the assessee by the Supreme

Court vide judgment dated 2.3.2021 in Civil Appeal

Nos.8733-8734/2018 viz, ENGINEERING ANALYSIS

CENTRE OF EXCELLENCE PRIVATE LIMITED -VS-

THE COMMISSIONER OF INCOME TAX.

3. The aforesaid submission has not been

disputed by the learned counsel for the Revenue.

4. In view of the decision of the Supreme Court

in case of ENGINEERING ANALYSIS CENTRE OF

EXCELLENCE PRIVATE LIMITED (supra) the

substantial questions framed in this appeal are

answered in favour of the assessee and against the

revenue. The order dated 9.5.2014 passed by the

Income Tax Appellate Tribunal is quashed.

In the result, appeal is allowed.

Sd/-

JUDGE

Sd/-

JUDGE

BKM