Karnataka High Court
The Commissioner Of Income Tax vs M/S Ibasis Netherlands B.V on 2 September, 2024
Author: S.G.Pandit
Bench: S.G.Pandit
-1-
NC: 2024:KHC:35650-DB
ITA No. 31 of 2024
IN THE HIGH COURT OF KARNATAKA AT BENGALURU
DATED THIS THE 2ND DAY OF SEPTEMBER, 2024
PRESENT
THE HON'BLE MR JUSTICE S.G.PANDIT
AND
THE HON'BLE MR JUSTICE C.M. POONACHA
INCOME TAX APPEAL NO. 31 OF 2024
BETWEEN:
1. THE COMMISSIONER OF INCOME TAX
INTERNATIONAL TAXATION
4TH FLOOR, BMTC BUILDING,
80 FEET ROAD, KORMANGALA,
BENGALURU -560 095.
2. THE DEPUTY COMMISSIONER OF INCOME TAX
INTERNATIONAL TAXATION CIRCLE-2(2)
4TH FLOOR, BMTC BUILDING
80 FEET ROAD, KLORAMANGALA
BENGALURU- 560 095.
...APPELLANTS
Digitally signed
by (BY SRI. RAVI RAJ Y.V. A/W SRI DILIP M., ADV.)
MARIGANGAIAH
PREMAKUMARI AND:
Location: HIGH
COURT OF
KARNATAKA M/S. IBASIS NETHERLANDS B.V.
(EARLIER KNOWN AS KPN GLOBAL
CARRIER SERVICES B.V.,)
KPN CORPORATE TAX DEPARTMENT,
P O BOX NO.25182, 3001 HD,
ROTTERDAM NETHERLANDS
PAN: AACCI4050P.
...RESPONDENT
(BY SMT. TANMAYEE RAJKUMAR, ADV.)
-2-
NC: 2024:KHC:35650-DB
ITA No. 31 of 2024
THIS APPEAL IS FILED UNDER SEC.260-A OF INCOME
TAX ACT 1961, ARISING OUT OF ORDER DATED 09/10/2023
PASSED IN IT(IT)A NO.201/BANG/2023, FOR THE
ASSESSMENT YEAR 2013-2014, PRAYING TO FORMULATE THE
SUBSTANTIAL QUESTIONS OF LAW STATED THEREIN; TO
ALLOW THE APPEAL AND SET ASIDE THE ORDERS PASSED BY
THE INCOME-TAX APPELLATE TRIBUNAL, BENGALURU IN
IT(IT)A NO.201/BANG/2023 DATED 09/10/2023 FOR
ASSESSMENT YEAR 2013-2014 ANNEXURE A AND CONFIRM
THE ORDER OF THE DRP CONFIRMING THE ORDER PASSED BY
THE DEPUTY COMMISSIONER OF INCOME TAX,
INTERNATIONAL TAXATION, CIRCLE 2(2), BENGALURU AND
ETC.
THIS APPEAL, COMING ON FOR HEARING, THIS DAY,
JUDGMENT WAS DELIVERED THEREIN AS UNDER:
CORAM: HON'BLE MR JUSTICE S.G.PANDIT
AND
HON'BLE MR JUSTICE C.M. POONACHA
ORAL JUDGMENT
(PER: HON'BLE MR JUSTICE S.G.PANDIT)
This appeal was admitted on 10.01.2024 to consider
the following substantial questions of law:
"1. Whether on the facts and in the
circumstances of the case, the Tribunal was
right in holding that payments to Non-resident
telecom operators for interconnect services and
capacity transfer are not taxable as royalty
without considering that the processes were
triggered from India, thereby making the
source of such income accrue/arise out of
NC: 2024:KHC:35650-DB
India, for the Non-resident telecom operators
to earn the income and the payments were
made by the deductor by collecting it from the
ultimate payer i.e., the end consumer in India
for services rendered?
2. Whether on the facts and in the
circumstances of the case, the Tribunal was
right in holding that the non-resident telecom
operators have no presence in India without
considering the fact that the income accrued
and arose in India at the time of the call being
made and no receipt would be available for the
Indian entity also in the event the call did not
go through?
3. Whether on the facts and in the
circumstances of the case, the Tribunal was
right in holding that the process royalty is not
applicable without as much as considering the
agreements between the assessee and payees,
opinion of experts in the field of
telecommunication and provisions governing
royalty in the act & DTAA?
4. Whether on the facts and in the
circumstances of the case, the Tribunal was
NC: 2024:KHC:35650-DB
right in holding that the income earned by the
assessee from Indian entities were not in the
nature of royalty as defined in explanation 2 to
section 9(1)(vi) of the Act and the DTAA?
2. We have heard learned counsel Sri.Y.V.Ravi Raj for
Sri.M.Dilip, learned counsel appearing for the
appellants/revenue and Smt.Tanmayee Rajkumar, learned
counsel for the respondent.
3. Learned counsel appearing for the parties would
submit that the substantial questions of law raised herein
are identical to the questions that were decided by a co-
ordinate Bench of this Court in VODAFONE IDEA LTD.,
v/s DEPUTY DIRECTOR OF INCOME-TAX
(INTERNATIONAL TAXATION) reported in (2023) 152
taxmann.com 575 (KAR) disposed of on 14.07.2023,
answering the questions against the Revenue and in
favour of the assessee. Similar appeals in respect of the
same parties relating to other assessment years, assailing
the same order of the Tribunal have been disposed of by
this Court in ITA No.29/2024 disposed of on 10.06.2024.
NC: 2024:KHC:35650-DB
4. Following the above two decisions, the present
appeal also stands disposed of, answering the substantial
questions of law against the revenue and in favour of the
assessee.
Sd/-
(S.G.PANDIT)
JUDGE
Sd/-
(C.M. POONACHA)
JUDGE
MPK
CT:bms
