Ita/166/2007 Of The Commissioner Of Income Tax v. M/S Software And Silicon Systems (I) Pvt Ltd

IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 31ST DAY OF MAY 27071 PRESENT| THE HON’BLE MR. JUSTICE ALOK ARADHE AND| THE HON’BLE MR.JUSTICE HEMANT CHANDANGOUDAR. BETWEEN: 1.T.A. NO.166 OF 2007 1. THE COMMISSIONER OF INCOME-TAX INTERNATIONAL TAXATION RASTROTHANA BUILDING NRUPATHUNGA ROAD| BANGALORE. 2. THE INCOME-TAX OFFICER. INTERNATIONAL TAXATION WARD-19(2), RASTROTHANA BUILDING| NRUPATHUNGA ROAD, BANGALORE. | .., APPELLANTS (BY SRI. K.V. ARAVIND, ADV.,) AND M/S. SOFTWARE AND SILICON SYSTEMS(I) PVT. LTD.,.NO.136, AIRPORT ROADBANGALORE-1 7. .., RESPONDENT| (BY SRI. T. SURYANARAYANA, ADV.) THIS I.T.A. IS. FILED UNDER SECTION 260-A OFI.T.ACT, 1961 ARISING OUT OF ORDER DATED 26.04.2006 PASSED IN ITA NO.977/BANG/2004, FOR THE ASSESSMENTYEAR 2003-2004, PRAYING TO: I. FORMULATE THE SUBSTANTIAL QUESTIONS OF LAW|STATED THEREIN.. II]. ALLOW THE APPEAL AND SET ASIDE THE ORDERPASSED BY THE ITAT, BANGALORE IN’ ITA NO.977/BANG/2004 DATED 26.04.2006 AND CONFIRM THE ORDER OF THEAPPELLATECOMMISSIONERCONFIRMING)THE|ORDER|PASSED BY THE INCOME TAX OFFICER, INTERNATIONALTAXATION, WARD-19(2), BANGALORE, IN THE INTEREST OFJUSTICE AND EQUITY. THIS I.T.A. COMING ON FOR FINAL HEARING, THIS|DAY,ALOK ARADHE J.,DELIVERED THE FOLLOWING: JUDGMENT Mr.K.V.Aravind, learned counsel for the revenue. Mr.T.Suryanarayana, learned counsel for the assessee. This appeal under Section 260A of the Income Tax Act,1961 (hereinafter referred to as the Act for short) has beenpreferred by the revenue against the order dated 26.04.2006passed by the Income Tax Appellate Tribunal, Bangalore.The subject matter of the appeal pertains to the Assessmentyear 2003-2004. The appeal was admitted by a bench of thisCourt vide order dated 08.08.2007 on _ the _ followsubstantial questions of law: Whetner the consideration paid by the[Indian customers or end users to the assessee - a foreign supplier, for transfer of the right to usethe software/computer programme in respect ofthe copyrights falls within the mischief of ‘royalty’|as defined under sub-clause (v) to Explanation 2to Clause (vi) of section 9(1) of the Act?| D)Whether on facts and circumstances|of the case, the ITAT was Justified in nolding thatthe amount(s) paid by the appellant(s) to theforeign software suppliers was not ‘royalty’ andthat the same did not give rise to any income’taxable in India and, therefore, the appellant(s)was not liable to deduct any tax at source?" 2. When the matter was taken up today, the learnedcounsel for the assessee submitted that the aforesaid|substantial questions of law have already been answered in|favour of the assessee by the Supreme Court vide judgment|dated 02.03.2021 iInCivil Appeal Nos.8733-8734/2018|VIZ.,"ENGINEERINGANALYSIS|CENTREOFEXCELLENCE|PRIVATELIMITEDYs.THECOMMISSTONER OF INCOME TAX: 3. The aforesaid submission has not been disputed bythe learned counsel! for the revenue. 4. In view of the decision of the Supreme Court inENGINEERING ANALYSIS CENTRE OF EXCELLENCE PRIVATE LIMITED(supra), the substantial questions of lawframed in this appeal are answered in favour of the assesseeand against the revenue. — In the result, appeal is dismissed. Sd/-.JUDGE Sd/-—JUDGE RV|