THE COMMISSIONER OF INCOME TAX vs. SAHARA AIRLINES LTD.

ITA - 1182 / 2009HC Delhi21 December 20095 pages
For Petitioner: RASHMI CHOPRA
AI SummaryDismissed

What did the High Court hold?

The Tribunal held that the payments were not in the nature of royalty but constituted business income in the hands of the foreign companies. Consequently, no Tax Deducted at Source (TDS) was deductible under Section 195(2) of the Income Tax Act.

What were the facts?

The assessee used software from two foreign companies, Amadeus Marketing and Galileo International, for ticket reservations and made payments for its use. The Assessing Officer considered these payments as royalty, subject to tax under the DTAA. The assessee argued that the services were rendered outside India and the income accrued offshore.

What were the issues?

Whether payments made for software usage to foreign companies constitute royalty income taxable in India, and if TDS is deductible under Section 195(2) when services are rendered outside India.

Which sections of the Income-tax Act were involved?

Section 195(2)

AI-generated summary — verify with the full judgment below

IN THE HIGH COURT OF DELHI AT NEW DELHI

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ITA No. 1176/2009 & CM No. 16086/2009 +

ITA No. 1177/2009 & CM No. 16088/2009

ITA No. 1178/2009 & CM No. 16090/2009

ITA No. 1179/2009 & CM No. 16092/2009

ITA No. 1180/2009 & CM No. 16094/2009

ITA No. 1181/2009 & CM No. 16096/2009

ITA No. 1182/2009 & CM No. 16098/2009

ITA No. 1183/2009 & CM No. 16100/2009

ITA No. 1184/2009 & CM No. 16102/2009

ITA No. 1185/2009 & CM No. 16104/2009

ITA No. 1186/2009 & CM No. 16105/2009

ITA No. 1190/2009 & CM No. 16112/2009

ITA No. 1191/2009 & CM No. 16114/2009

ITA No. 1192/2009 & CM No. 16116/2009

ITA No. 1193/2009 & CM No. 16118/2009

ITA No. 1194/2009 & CM No. 16120/2009

ITA No. 1195/2009 & CM No. 16122/2009

ITA No. 1196/2009 & CM No. 16124/2009 ITA No. 1197/2009 & CM No. 16126/2009

ITA No. 1198/2009 & CM No. 16128/2009

ITA No. 1199/2009 & CM No. 16130/2009

Decided on: December 21, 2009

Commissioner of Income Tax

... Appellant

through:

Ms. Rashmi Chopra, Advočate

**VERSUS**

Sahara Airlines Ltd.

[]

%

... Respondent

through:

Mr. Percy Pardiwala, Sr. Adv.

with Mr. U.A. Rana,

Ms. Anuradha Sharma and Ms. Priyanka Dayal, Advocates

CORAM:-

THE HON'B

The order continues below.

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