THE COMMISSIONER OF INCOME TAX vs. SAHARA AIRLINES LTD.

ITA - 1190 / 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 taxable outside India. Therefore, no Tax Deducted at Source (TDS) was deductible by the assessee.

What were the facts?

The assessee made payments to two foreign companies, M/s. Amadeus Marketing and M/s. Galileo International, for using their software for ticket reservations. The Assessing Officer treated these payments as royalty and sought to deduct tax at applicable DTAA rates.

What were the issues?

Whether payments made for using software by foreign companies constitute royalty and are subject to TDS under Section 195 of the Income Tax Act, or if they are business income taxable outside India.

Which sections of the Income-tax Act were involved?

Section 195

AI-generated summary — verify with the full judgment below

### 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

% Decided on: December 21, 2009

ITA No. 1198/2009 & CM No. 16128/2009 ITA No. 1199/2009 & CM No. 16130/2009

Commissioner of Income Tax

. . . Appellant

through:

Ms. Rashmi Chopra, Advocate

**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:-

Ì

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

The order continues below.

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