Income tax appeal by the Revenue challenging the Single Judge's order holding that interconnect service charges paid to a non-resident telecom operator do not constitute royalty. Following a Co-ordinate Bench decision dated 14.07.2023 in ITA No.160/2015, the Division Bench dismissed the appeal.
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NC: 2024:KHC:10968-DB WA No. 1579 of 2023
IN THE HIGH COURT OF KARNATAKA AT BENGALURU
DATED THIS THE 18TH 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. 1579 OF 2023 (T-IT)
BETWEEN:
THE DEPUTY COMMISSIONER OF INCOME TAX INTERNATIONAL TAXATION, CIRCLE-2(1), BMTC BUILDING, 80 FEET ROAD, KORAMANGALA, BENGALURU - 560 095
…APPELLANT
(BY SRI. Y.V.RAVIRAJ ADVOCATE A/W SRI.M.DILIP., ADVOCATES)
AND:
Digitally signed by A K CHANDRIKA Location: HIGH COURT OF KARNATAKA
M/S DEUTSCHE TELEKOM A G FRIEDRICH-EBERT-ALLE 140, 53113 BONN, GERMANY, (REP BY ITS HEAD OF TRANSACTION TAX SRI ULRICH HARTMANN S/O SRI WERNER HARTMANN AGED ABOUT 62 YEARS
…RESPONDENT
(BY SRI.K.K.CHYTHANYA SR. COUNSEL FOR SRI.S.SHARATH., ADVOCATE)
THIS WRIT APPEAL IS FILED U/S 4 OF THE KARNATAKA HIGH COURT ACT PRAYING TO A)SET ASIDE THE ORDER PASSED BY THE LEARNED SINGLE JUDGE IN WP NO.53137/2018 DATED 23/08/2023 & ETC.
NC: 2024:KHC:10968-DB WA No. 1579 of 2023
THIS APPEAL, COMING ON FOR ORDERS, THIS DAY, S.G.PANDIT J., DELIVERED THE FOLLOWING:
JUDGMENT
Heard Sri. Y.V.Raviraj along with Sri. Dilip.M., learned
counsel for the appellant and Sri. Chythanya.K.K., learned
Senior Counsel for Sri. S.Sharath, learned counsel for the respondent.
interconnect service charges paid would amount to royalty.
“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 etc35 , rendered by the ITAT. In that view of the matter this question also needs to be answered against the Revenue.”
14.07.2023 in ITA No.160/2015 and connected appeals, the above appeal stands dismissed.
Sd/JUDGE
Sd/JUDGE
SMJ/MPK
1 issue framed by the court
Whether interconnect service charges paid to a non-resident telecom operator amount to royalty chargeable to tax.
Colour shows how this judgement treated each authority
ITA No.160/2015 and connected appealsFollowed¶6
The Deputy Commissioner of Income Tax International Taxation, Circle-2(1), Bengaluru
M/S Deutsche Telekom A G
S.G.Pandit
C.M. Poonacha
As recorded by the court registry
Judgements on the same questions, provisions and authorities, from every court
