Revenue appealed against a single judge's decision holding that interconnect service charges paid to non-resident telecom operators are not taxable as royalty; the Division Bench followed a Co-ordinate Bench ruling to the same effect and dismissed the appeal.
This page shows the compact analysis of this judgement. The full analysis — procedural history, issue-by-issue holdings with ratio and obiter, advocates, and paragraph-level evidence for every claim — is being added to the record in batches and will appear here when this judgement has been through it.
NC: 2024:KHC:35629-DB WA No. 665 of 2024
IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 2ND 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 (T-IT)
BETWEEN:
Digitally signed by MARIGANGAIAH PREMAKUMARI Location: HIGH COURT OF KARNATAKA
…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.
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 etc35 , rendered by the ITAT. In that view of the matter this question also needs to be answered against the Revenue.”
SD/(S.G.PANDIT) JUDGE
SD/(C.M. POONACHA) JUDGE
MPK
CT:bms/ List No.: 1 Sl No.: 19
1 issue framed by the court
Whether interconnect service charges paid to non-resident telecom operators amount to royalty chargeable to tax.
Colour shows how this judgement treated each authority
ITA No.160/2015 and connected appeals, judgment dated 14.07.2023Followed¶6
Deputy Commissioner of Income Tax (International Taxation) Circle-2(1)
Principal Chief Commissioner of Income Tax
The Union of India through its Revenue Secretary
M/S. Belgacom International Carrier Services SA Belgium
S.G. Pandit
C.M. Poonacha
As recorded by the court registry
Judgements on the same questions, provisions and authorities, from every court
