Income-tax appeal by the Revenue questioning whether interconnect service charges paid to a non-resident telecom operator constitute taxable royalty. The Division Bench followed its Co-ordinate Bench judgment in ITA No.160/2015 holding such charges are not royalty and dismissed the appeal, upholding the Single Judge's order.
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NC: 2024:KHC:35632-DB WA No. 692 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. 692 OF 2024 (T-IT)
BETWEEN:
BENGALURU-560095.
…APPELLANTS
Digitally signed by MARIGANGAIAH PREMAKUMARI Location: HIGH COURT OF KARNATAKA
(BY SRI. SANMATHI E. I., ADV.)
AND:
DOWNTOWN DOHA, ZONE 3, STREET, 981, BUILDING 2, 4TH FLOOR, PO BOX 27727 DOHA QATAR).
…RESPONDENTS
(BY SRI.ANKUR P.D., ADV. FOR SRI K.R.VASUDEVAN, ADV.)
THIS WRIT APPEAL IS FILED UNDER SECTION 4 OF THE KARNATAKA HIGH COURT ACT PRAYING TO 1) TO SET ASIDE THE ORDER DATED 02.11.2023 IN WRIT PETITION NO.5112 OF 2023 (T-IT) PASSED BY THE LEARNED SINGLE JUDGE AND 2) GRANT SUCH OTHER ORDER AS THIS COURT DEEMS FIT UNDER THE FACTS AND CIRCUMSTANCES OF THE CASE, IN THE INTEREST OF EQUITY AND JUSTICE.
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 and learned counsel Sri.Ankur P.D. for respondents.
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.”
NC: 2024:KHC:35632-DB WA No. 692 of 2024
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
MPK CT:bms List No.: 1 Sl No.: 22
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¶4
The Deputy Commissioner of Income Tax Assessment Circle 2(1), Bengaluru
The Commissioner of Income Tax-2, Bengaluru
Vodafone Qatar PQSC
Vodafone Idea Limited
S.G.Pandit
C.M.Poonacha
As recorded by the court registry
Judgements on the same questions, provisions and authorities, from every court
