Heard Learned Counsel Sri. Y v. Perused The Appeal Papers

Digitally signed bySHARMA ANANDCHAYALocation: High Courtof Karnataka NC: 2024:KHC:12158-DBITA No. 24 of 2024 IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 25 DAY OF MARCH, 2024 PRESENT THE HON'BLE MR. JUSTICE S.G.PANDIT AND THE HON'BLE MR. JUSTICE C.M. POONACHA INCOME TAX APPEAL NO.24 OF 2024 BETWEEN: 1. THE COMMISSIONER OF INCOME TAX INTERNATIONAL TAXATION 4 FLOOR, BMTC BUILDING 80 FEET ROAD, KORAMANGALA BENGALURU - 560 095. 2. THE DEPUTY COMMISSIONER OF INCOME-TAX INTERNATIONAL TAXATION CIRCLE-2(2), 4 FLOOR BMTC BUILDING, 80 FEET ROAD, KORAMANGALA BENGALURU - 560 095. …APPELLANTS (BY SRI. Y.V. RAVIRAJ A/W SRI. M. DILIP, ADVOCATES) AND: M/S COMMUNICATIONS GLOBAL NETWORK SERVICES LTD, 81, NEWGATE STREET, LONDON, EC1A 7AJ, UNITED KINGDOM, PAN:AAGCC 9220K. …RESPONDENT (BY SRI. T. SURYANARAYANA, SENIOR COUNSEL FOR Ms. TANMAYEE RAJKUMAR, ADVOCATE) - 2 - THIS APPEAL IS FILED UNDER SECTION 260-A OF THE INCOME TAX ACT, 1961, PRAYING TO ALLOW THE APPEAL AND SET ASIDE THE ORDERS PASSED BY THE INCOME-TAX APPELLATE TRIBUNAL, BENGALURU IN IT(IT)A NO. 167/BANG/2023 DATED 29/08/2023 FOR ASSESSMENT YEAR 2015-2016 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. THIS APPEAL, COMING ON FOR HEARING, THIS DAY, S.G.PANDIT J., DELIVERED THE FOLLOWING: JUDGMENT 1. This appeal is by the Revenue challenging the order passed by the Income Tax Appellate Tribunal dated 29.08.2023 in Appeal IT(IT)A No.167/Bang/2023 partly allowing the assessee appeal for the assessment year 2015-16 vide Annexure-A. 2. Heard learned counsel Sri. Y. V. Raviraj along with learned counsel Sri. Dilip M., for the appellants and Sri. T. Suryanarayana, learned Senior Counsel for Ms. Tanmayee Rajkumar, learned counsel for the respondent. 3. Perused the appeal papers. - 3 - 4. By order dated 18.01.2024, the present appeal was admitted. In sum and substance the substantial question of law involved in the above appeal is as to payment towards interconnect service charges could be chargeable to tax as royalty. 5. The above question is answered in ITA No.160/2015 and connected appeals. This Court by Judgment dated 14.07.2023, at paragraph 21 has held as follows: "21. The third question is, whether the payments made to NTOS for providing interconnect services and 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 etc[35], rendered by the ITAT. In that view of the matter this question also needs to be answered against the Revenue." 6. The observation made by this Court in ITA No.160/2015 and connected matters would squarely apply to the question raised in the present appeal also. Therefore, in terms of the said Judgment dated 14.07.2023 in ITA No.160/2015 and connected matters, the substantial question of law is answered against the Revenue. Hence, the present appeal also stands dismissed. SD/- JUDGE SD/- JUDGE sac List No.: 1 Sl No.: 52