Karnataka High Court
The Commissioner Of Income Tax vs M/S Software And Silicon Systems ... on 31 May, 2021
Author: Alok Aradhe Chandangoudar
1
IN THE HIGH COURT OF KARNATAKA AT BENGALURU
DATED THIS THE 31ST DAY OF MAY 2021
PRESENT
THE HON'BLE MR. JUSTICE ALOK ARADHE
AND
THE HON'BLE MR.JUSTICE HEMANT CHANDANGOUDAR
I.T.A. NO.166 OF 2007
BETWEEN:
1. THE COMMISSIONER OF INCOME-TAX
INTERNATIONAL TAXATION
RASTROTHANA BUILDING
NRUPATHUNGA ROAD
BANGALORE.
2. THE INCOME-TAX OFFICER
INTERNATIONAL TAXATION
WARD-19(2), RASTROTHANA BUILDING
NRUPATHUNGA ROAD, BANGALORE.
... APPELLANTS
(BY SRI. K.V. ARAVIND, ADV.,)
AND:
M/S. SOFTWARE AND SILICON SYSTEMS(I) PVT. LTD.,
NO.136, AIRPORT ROAD
BANGALORE-17.
... RESPONDENT
(BY SRI. T. SURYANARAYANA, ADV.)
---
THIS I.T.A. IS FILED UNDER SECTION 260-A OF
I.T.ACT, 1961 ARISING OUT OF ORDER DATED 26.04.2006
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PASSED IN ITA NO.977/BANG/2004, FOR THE ASSESSMENT
YEAR 2003-2004, PRAYING TO:
I. FORMULATE THE SUBSTANTIAL QUESTIONS OF LAW
STATED THEREIN.
II. ALLOW THE APPEAL AND SET ASIDE THE ORDER
PASSED BY THE ITAT, BANGALORE IN ITA NO.977/BANG/
2004 DATED 26.04.2006 AND CONFIRM THE ORDER OF THE
APPELLATE COMMISSIONER CONFIRMING THE ORDER
PASSED BY THE INCOME TAX OFFICER, INTERNATIONAL
TAXATION, WARD-19(2), BANGALORE, IN THE INTEREST OF
JUSTICE AND EQUITY.
THIS I.T.A. COMING ON FOR FINAL HEARING, THIS
DAY, ALOK ARADHE J., DELIVERED THE FOLLOWING:
JUDGMENT
Mr.K.V.Aravind, learned counsel for the revenue.
Mr.T.Suryanarayana, learned counsel for the assessee.
This appeal under Section 260A of the Income Tax Act,
1961 (hereinafter referred to as the Act for short) has been
preferred by the revenue against the order dated 26.04.2006
passed by the Income Tax Appellate Tribunal, Bangalore.
The subject matter of the appeal pertains to the Assessment
year 2003-2004. The appeal was admitted by a bench of this
Court vide order dated 08.08.2007 on the following
substantial questions of law:
"a) 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 in respect of
the copyrights falls within the mischief of 'royalty'
as defined under sub-clause (v) to Explanation 2
to Clause (vi) of section 9(1) of the Act?
b) 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
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 liable to deduct any tax at source?"
2. When the matter was taken up today, the learned
counsel for the assessee submitted that the aforesaid
substantial questions of law have already been answered in
favour of the assessee by the Supreme Court vide judgment
dated 02.03.2021 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
ENGINEERING ANALYSIS CENTRE OF EXCELLENCE
PRIVATE LIMITED (supra), the substantial questions of law
framed in this appeal are answered in favour of the assessee
and against the revenue.
In the result, appeal is dismissed.
Sd/-
JUDGE
Sd/-
JUDGE
RV
