Deputy Commissioner Of Income Tax vs M/S Belgacom International Carrier ...
2024 Latest Caselaw 22146 Kant

Karnataka High Court

Deputy Commissioner Of Income Tax vs M/S Belgacom International Carrier ... on 2 September, 2024

Author: S.G.Pandit

Bench: S.G.Pandit

                                               -1-
                                                       NC: 2024:KHC:35629-DB
                                                         WA No. 665 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
                           WRIT APPEAL NO. 665 OF 2024 (T-IT)
                   BETWEEN:

                   1.   DEPUTY COMMISSIONER OF INCOME TAX
                        (INTERNATIONAL TAXATION)
                        CIRCLE-2(1) ROOM NO.441,
                        4TH FLOOR, BMTC BUILDING,
                        KORAMANGALA, BENGALURU-95.

                   2.   PRINCIPLE CHIEF COMMISSIONER
                        OF INCOME TAX
                        C-3, DONA CYNTHIA, 35,
                        PRIMROSE ROAD,
                        BENGALURU-560025.

                   3.   THE UNION OF INDIA
Digitally signed
by                      THROUGH ITS REVENUE SECRETARY,
MARIGANGAIAH            DEPARTMENT OF REVENUE,
PREMAKUMARI             MINISTRY OF FINANCE,
Location: HIGH          128/A, NORTH BLOCK,
COURT OF                NEW DELHI-110001.
KARNATAKA
                                                               ...APPELLANTS
                   (BY SRI. SANMATHI E. I., ADV.)

                   AND:
                   M/S. BELGACOM INTERNATIONAL CARRIER
                   SERVICES SA BELGIUM
                   REP. BY AUTHORIZED SIGNATORY
                                                              ...RESPONDENT
                                  -2-
                                           NC: 2024:KHC:35629-DB
                                             WA No. 665 of 2024




    THIS APPEAL IS FILED UNDER SECTION 4 OF THE
KARNATAKA HIGH COURT ACT PRAYING TO A) SET ASIDE THE
ORDER DATED 27/10/2023 IN WP NO.23624/2019 PASSED BY
THE LEARNED SINGLE JUDGE AND B)GRANT SUCH OTHER
ORDER.

    THIS APPEAL, COMING ON FOR ORDERS, 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)

Heard Sri. E.I.Sanmathi, learned counsel for the

appellants.

2. Perused the appeal papers.

3. The question involved in the appeal is as to whether

interconnect service charges paid would amount to royalty.

4. The above issue was considered by a Co-ordinate

Bench of this court in ITA.No.160/2015 and connected appeals.

By judgment dated 14.07.2023, it is held that interconnect

service charges would not constitute royalty. Paragraph No.21

of the judgment reads as follows:

"The third question is, whether the payments made to NTOS for providing interconnect services and

NC: 2024:KHC:35629-DB

transfer of capacity in foreign countries is chargeable to tax as royalty. It was argued by Shri.Pardiwala, that for subsequent years in assessee's own case, the ITAT has held that tax is not deductable when payment is made to non-resident telecom operator. This factual aspect is not refuted. Thus the Revenue has reviewed its earlier stand for the subsequent assessment years placing reliance on Viacom etc35, rendered by the ITAT. In that view of the matter this question also needs to be answered against the Revenue."

5. Learned Single Judge has also placed reliance on

the above decision of the Co-ordinate Bench. Therefore, we do

not find any infirmity in the orders under challenge.

6. Following the decision of Co-ordinate Bench dated

14.07.2023 in ITA No.160/2015 and connected appeals, the

above appeal stands dismissed.

SD/-

(S.G.PANDIT) JUDGE

SD/-

(C.M. POONACHA) JUDGE

MPK