Excellence Private Limited v. The Commissioner Of Income Tax And Another Reported In (2021) 432 Itr 471 (Sc

IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 09 DAY OF NOVEMBER, 2021 PRESENT THE HON’BLE MRS.JUSTICE S.SUJATHA AND THE HON’BLE MR. JUSTICE S.RACHAIAH I.T.A.No.319/2012 BETWEEN : M/s SELECT SOFTWARE (I) PVT. LTD., REP. BY ITS DIRECTOR SRI JOHN VERGHESE NO.2710, I DIAGONAL ROAD, 7 MAIN, LIC COLONY, JEEVAN BHEEMANAGAR, BANGALORE-560075 ...APPELLANT (BY SRI A.SHANKAR, SENIOR ADV. A/W SRI S.V.RAVISHANKAR, ADV.) AND : THE INCOME TAX OFFICER WARD-12(2), 4 FLOOR, NRUPATHUNGA ROAD, OPP: RBI BANK, BANGALORE-560001 …RESPONDENT (BY SRI T.N.C.SRIDHAR, ADV. FOR SRI JEEVAN J. NEERALGI, ADV.) THIS INCOME TAX APPEAL IS FILED UNDER SECTION 260-A OF INCOME TAX ACT 1961, ARISING OUT OF ORDER DATED 12.06.2012 PASSED IN ITA NO.1005/BANG/2011, FOR THE ASSESSMENT YEAR 2007-2008, PRAYING TO I. FORMULATE THE SUBSTANTIAL QUESTION OF LAW STATED THEREIN, II. ALLOW THE APPEAL AND SET ASIDE THE FINDINGS TO THE EXTENT AGAINST THE APPELLANT IN THE ORDER PASSED BY THE TRIBUNAL IN ITA NO.1005/BANG/2011 DATED 12.06.2012. THIS APPEAL COMING ON FOR HEARING, THIS DAY, S. SUJATHA, J., DELIVERED THE FOLLOWING: J U D G M E N T This appeal is filed by the assessee under Section 260A of the Income Tax Act, 1961 assailing the order of the Income Tax Appellate Tribunal, Bangalore Bench “B” dated 12.06.2012 passed in ITA No.1005/Bang/2011 relating to the Assessment Year 2007-08. 2. This appeal has been admitted by the Co- ordinate Bench of this Court to consider the following substantial questions of law:- 1.Whether on the facts and circumstances of the case, is it possible to hold that the transactions between the appellant-assessee and suppliers of the software, residents and non-residents of India, were the sale out and out or it was only a transfer of rights to use the software on payment of royalty? 2.If the answer to the first substantial question of law is in the affirmative, whether the appellant-assessee is entitled to seek deduction of the consideration paid for the software under Sections 28 and 37 of the Act? question of law is in the affirmative, whether the appellant-assessee is entitled to seek deduction of the consideration paid for the software under Sections 28 and 37 of the Act? 3. Learned Senior Counsel representing the assessee would submit that the substantial question of law No.2 would not arise for consideration in view of the substantial question of law No.1 being covered by the ruling of the Hon’ble Apex Court in favour of the assessee in Engineering Analysis Centre of Excellence Private Limited vs. The Commissioner of Income Tax and another reported in (2021) 432 ITR 471 (SC). 4. Learned counsel for the Revenue could not dispute the same. 5. In view of the aforesaid submissions, the substantial question of law No.1 is answered in favour of the assessee. Substantial question of law No.2 does not arise for consideration. The appeal stands disposed of accordingly. SD/- JUDGE SD/- JUDGE PMR