Karnataka High Court
Pr. Commissioner Of Income Tax vs M/S Syna Media Limited on 10 September, 2025
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NC: 2025:KHC:35592-DB
ITA No. 113 of 2025
HC-KAR
IN THE HIGH COURT OF KARNATAKA AT BENGALURU
DATED THIS THE 10TH DAY OF SEPTEMBER, 2025
PRESENT
THE HON'BLE MR. VIBHU BAKHRU, CHIEF JUSTICE
AND
THE HON'BLE MR. JUSTICE C M JOSHI
INCOME TAX APPEAL NO. 113 OF 2025
BETWEEN:
1. PR. COMMISSIONER OF INCOME TAX
(INTERNATIONAL TAXATION)
KORMANAGALA
BANGALORE
2. THE ASSISTANT COMMISSIONER
OF INCOME TAX
INTERNATIONAL TAXATION
CIRCLE 1(2) KORMANAGLA
BANGALORE
...APPELLANTS
Digitally (BY SRI SANMATHI E.I., ADVOCATE)
signed by
AMBIKA H B
Location: AND:
High Court
of Karnataka 1. M/S SYNA MEDIA LIMITED
ONE LONDON ROAD
STAINES UPON THAMES LONDAN
MIDDLESEX, TW 184 EX
UNITED KINGDOM
...RESPONDENT
THIS INCOME TAX APPEAL IS FILED UNDER SECTION 260-A
of INCOME TAX ACT 1961, PRAYING TO DECIDE THE FOREGOING
QUESTION OF LAW AND OR SUCH OTHER QUESTIONS OF LAW AS
MAY BE FORMULATED BY THE HON'BLE COURT AS DEEMED FIT
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ITA No. 113 of 2025
HC-KAR
AND SET ASIDE THE APPELLATE ORDER DATED 13.12.2023
PASSED BY THE INCOME TAX APPELLATE TRIBUNAL, 'C' BENCH,
BANGALORE AS SOUGHT FOR, IN THE RESPONDENT-
ASSESSEE'S CASE, IN APPEAL PROCEEDINGS IN IT(IT)A NO.
940/Bang/2023 FOR A.Y. 2021-22 (ANNEXURE-A) AND GRANT SUCH
OTHER RELIEF AS DEEMED FIT.
THIS APPEAL, COMING ON FOR ORDERS, THIS DAY,
JUDGMENT WAS DELIVERED THEREIN AS UNDER:
CORAM: HON'BLE MR. VIBHU BAKHRU, CHIEF JUSTICE
and
HON'BLE MR. JUSTICE C M JOSHI
ORAL JUDGMENT
(PER: HON'BLE MR. VIBHU BAKHRU, CHIEF JUSTICE)
1. The Revenue has filed the present appeal under Section
260A of the Income Tax Act, 1961 [the Act] impugning a common
order dated 13.12.2023 passed by the Income Tax Appellate
Tribunal [ITAT] in IT(IT)A No.940/Bang/2023 and S.P. No.41/Bang/
2023. The present appeal is confined to the order insofar as it
relates to IT(IT)A No.940/Bang/2023 in respect of Assessment
Year [AY] 2021-22.
2. The respondent [Assessee] had preferred the said appeal
against the order dated 27.09.2023 passed by the ITO
(International Taxation), Circle 1(2), Bengaluru [AO] in respect of
the AY 2021-22. The Assessee is a company incorporated in
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United Kingdom and the dispute relates to the amount of
`14,27,24,656/- received by the Assessee during the financial year
relevant to AY 2021-22. Whilst, the Assessee claimed that the said
receipts were not chargeable to tax under the Act, the AO held that
the said amounts which were received for supply of software
license and hardware as well as provision for support services
constituted royalty under the India-UK Double Taxation Avoidance
Agreement.
3. The Assessee provides advanced and secure video
solutions for cloud services, middleware platforms, IPTV, DTH,
cable and OTT Pay TV providers. It had received the aggregate
amount of `14,27,24,656/- from its various customers, which has
been summarized in a tabular statement in paragraph 3.3 of the
impugned order. The same is reproduced below:
Name of the customer Revenue
Earned in Rs.
GTPL Hathway Limited 48,66,517
Atria Convergence Technologies Limited 23,94,880
Den Networks Limited 3,11,35,803
Dish TV India Limited 1,49,65,000
Hathway Digital Limited 2,89,29,092
Star India Private Limited 63,86,620
Culver Max Entertainment Private Limited 49,86,404
Tata Play Limited 4,90,60,340
Total 14,27,24,656
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4. The agreement entered into between the Assessee and one
of the customers (agreement with DEN - Digital Entertainment
Networks Private Limited) indicates that the Assessee had granted
a licence to DEN subject to the terms and conditions as set out
therein. The licence is non-exclusive and non-transferable licence
for use of NDS Software and NDS Hardware, third party hardware
and third party software in accordance with the conditions set out
therein. The AO had also noted that the licensee was also entitled
to keep two backup copies of NDS software and third-party
software, albeit only as a part of disaster recovery program as
expressly permitted in law. The agreements entered into by the
Assessee with other service recipients is in terms, which are
materially similar to the terms and conditions of the agreement
between the Assessee and DEN.
5. It is apparent from the nature of services that there was no
transfer of any copyright or intellectual property right [IPR] in the
proprietary software and hardware of the Assessee. In the given
facts, the learned ITAT had accepted that the receipts could not be
construed as royalty.
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5. The issue is covered by the decision of the Supreme Court in
Engineering Analysis Centre of Excellence Private Limited v.
Commissioner of Income-Tax and another: (2021) 125
TAXMANN.COM 42 (SC). The ITAT also noted that a similar issue
was considered in the Assessee's case (in IT ITA No.363/Bang/
2017 for AY 2006-07) and the Assessee's appeal was allowed in
terms of an order dated 12.11.2021. The ITAT had reproduced the
relevant contents of the said order and it concluded that the
Assessee's appeal was covered by the said decision.
6. In our view, the controversy raised is no longer res integra as
the same is squarely covered by the decision of the Supreme Court
in Engineering Analysis Centre of Excellence Private Limited
(supra). There is no material to indicate that there is any transfer of
IPR in the software that would entitle the Assessee's customers in
India to exploit such IPR for commercial purposes. The appeals in
the Assessee's own case, in respect of AY 2012-13 (being ITA
No.109/2024) and in respect of AY 2014-15 (ITA No.698/2023)
were dismissed by a Co-ordinate Bench to this Court (Principal
Commissioner of Income Tax v. M/s Synamedia Limited':
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NC:2025:KHC:32476-DB and NC:2025:KHC:31121-DB) also
involved similar questions.
7. In view of the above, no substantial question of law arises for
consideration in this case. The appeal is, accordingly, dismissed
8. Pending application stands disposed of.
Sd/-
(VIBHU BAKHRU)
CHIEF JUSTICE
Sd/-
(C M JOSHI)
JUDGE
AHB
