THE COMMISSIONER OF INCOMET AX vs. SAHARA AIRLINES LTD.

ITA - 1183 / 2009HC Delhi21 December 20095 pages
For Petitioner: RASHMI CHOPRA
AI SummaryDismissed

What did the High Court hold?

The High Court 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 made payments to two foreign companies, M/s. Amadeus Marketing and M/s. Galileo International, for software used in ticket reservations. The Assessing Officer considered these payments as royalty and taxable in India. The assessee argued that services were rendered outside India, and the income accrued outside India, thus no tax was deductible.

What were the issues?

Whether payments made for software used in ticket reservations by a foreign company constitute royalty income taxable in India, and if TDS is deductible.

Which sections of the Income-tax Act were involved?

Section 195(2)

AI-generated summary — verify with the full judgment below

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## IN THE HIGH COURT OF DELHI AT NEW DELHI

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, Advocate

VERSUS

Sahara Airlines Ltd.

D

(

%

... Respondent

through:

Mr. Percy Pardiwala, Sr. Adv.

with Mr. U.A. Rana,

Ms. Anuradha Sharma and Ms. Priyanka Dayal, Advocates

CORAM:-

THE HON'BLE MR. JUSTICE A.K. S

The order continues below.

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