Wa/299/2024 Of The Deputy Commissioner Of Income Tax v. M/S. Singapore Telecommunications Ltd

Digitally signedby A KCHANDRIKALocation: HIGHCOURT OFKARNATAKA NC: 2024:KHC:13576-DBWA No. 299 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 -WRIT APPEAL NO.299 OF 2024 (TIT) BETWEEN: 1. THE DEPUTY COMMISSIONER OF INCOME TAX INTERNATIONAL TAXATION CIRCLE-2 (2), ROOM NO.430 4 FLOOR, BMTC BUILDING 80 FEET ROAD, KORAMANGALA BENGALURU-560095. INTERNATIONAL TAXATION CIRCLE-2 (2), ROOM NO.430 4 FLOOR, BMTC BUILDING 80 FEET ROAD, KORAMANGALA BENGALURU-560095. 2. THE COMMISSIONER OF INCOME TAX INTERNATIONAL TAXATION ROOM NO.741, 7 FLOOR, BMTC BUILDING 80 FEET ROAD, 6 BLOCK KORAMANGALA BENGALURU-560095. INTERNATIONAL TAXATION ROOM NO.741, 7 FLOOR, BMTC BUILDING 80 FEET ROAD, 6 BLOCK KORAMANGALA BENGALURU-560095. 3. THE CENTRAL BOARD OF DIRECT TAXES DEPARTMENT OF REVENUE NORTH BLOCK, CENTRAL SECRETARIAT NEW DELHI-110001 DEPARTMENT OF REVENUE NORTH BLOCK, CENTRAL SECRETARIAT NEW DELHI-110001 REP. BY ITS CHAIRMAN. …APPELLANTS (BY SRI. Y V RAVIRAJ, ADV.) AND: 1. M/S. SINGAPORE TELECOMMUNICATIONS LTD., SINGAPORE 31 EXETER ROAD SINGAPORE 31 EXETER ROAD COMCENTRE SINGAPORE -239732 SINGAPORE REP. BY ITS AUTHORISED SIGNATORY MR.KOH BOON CHYE. SINGAPORE REP. BY ITS AUTHORISED SIGNATORY MR.KOH BOON CHYE. 2. VODAFONE IDEA LIMITED 10 FLOOR, BIRLA CENTURION CENTURION MILLS COMPOUND PANDURANG BUDKKAR MARG WORLI, MUMBAI-400030 REP. BY ITS DIRECTORS. …RESPONDENTS (BY SRI.HARPREET SINGH AJMANI, ADV. FOR SRI PRANAV VENKAT VISHWANATH, ADV. FOR C/R) THIS APPEAL IS FILED U/S 4 OF THE KARNATAKA HIGH COURT ACT PRAYING TO SET ASIDE THE ORDER PASSED BY THE LEARNED SINGLE JUDGE IN W.P.NO.15475/2021 (T-IT) DATED 23.11.2023. THIS APPEAL, COMING ON FOR PRELIMINARY HEARING, THIS DAY, S.G.PANDIT J., DELIVERED THE FOLLOWING: JUDGMENT Heard Sri.Y.V.Raviraj learned counsel for the appellants and learned counsel Sri.Harpreet Singh Ajmani, for Sri.Pranav Venkat Vishwanath, learned Counsel for the Caveator/respondent No.1. 2. Perused the appeal papers. 3. The question involved in the appeal is as to whether interconnect service charges paid would amount to royalty. - 3 - 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 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.” 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. NC: 2024:KHC:13576-DBWA No. 299 of 2024 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/- JUDGE Sd/- JUDGE NC CT:bms