Wa/665/2024 Of Deputy Commissioner Of Income Tax v. M/S Belgacom International Carrier Services Sa Belgium

Digitally signedbyMARIGANGAIAHPREMAKUMARILocation: HIGHCOURT OFKARNATAKA NC: 2024:KHC:35629-DBWA No. 665 of 2024 IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 2 DAY OF SEPTEMBER, 2024 PRESENT THE HON'BLE MR JUSTICE S.G.PANDIT AND THE HON'BLE MR JUSTICE C.M. POONACHA -WRIT APPEAL NO. 665 OF 2024 (TIT) BETWEEN: 1. DEPUTY COMMISSIONER OF INCOME TAX (INTERNATIONAL TAXATION) CIRCLE-2(1) ROOM NO.441, 4 FLOOR, BMTC BUILDING, KORAMANGALA, BENGALURU-95. (INTERNATIONAL TAXATION) CIRCLE-2(1) ROOM NO.441, 4 FLOOR, BMTC BUILDING, KORAMANGALA, BENGALURU-95. 2. PRINCIPLE CHIEF COMMISSIONER OF INCOME TAX C-3, DONA CYNTHIA, 35, PRIMROSE ROAD, BENGALURU-560025. OF INCOME TAX C-3, DONA CYNTHIA, 35, PRIMROSE ROAD, BENGALURU-560025. 3. THE UNION OF INDIA THROUGH ITS REVENUE SECRETARY, DEPARTMENT OF REVENUE, MINISTRY OF FINANCE, 128/A, NORTH BLOCK, MINISTRY OF FINANCE, 128/A, NORTH BLOCK, NEW DELHI-110001. …APPELLANTS (BY SRI. SANMATHI E. I., ADV.) AND: M/S. BELGACOM INTERNATIONAL CARRIER SERVICES SA BELGIUM REP. BY AUTHORIZED SIGNATORY …RESPONDENT THIS APPEAL IS FILED UNDER SECTION 4 OF THE KARNATAKA HIGH COURT ACT PRAYING TO A) SET ASIDE THE ORDER DATED 27/10/2023 IN WP NO.23624/2019 PASSED BY THE LEARNED SINGLE JUDGE AND B)GRANT SUCH OTHER ORDER. THIS APPEAL, COMING ON FOR ORDERS, THIS DAY, JUDGMENT WAS DELIVERED THEREIN AS UNDER: CORAM: HON'BLE MR JUSTICE S.G.PANDIT AND HON'BLE MR JUSTICE C.M. POONACHA ORAL JUDGMENT (PER: HON'BLE MR JUSTICE S.G.PANDIT) Heard Sri. E.I.Sanmathi, learned counsel for the appellants. 2. Perused the appeal papers. 3. The question involved in the appeal is as to whether interconnect service charges paid would amount to royalty. 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. 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/- (S.G.PANDIT) JUDGE SD/- (C.M. POONACHA) JUDGE