THE COMMISSIONER OF INCOME TAX vs. SAHARA AIRLINES LTD.

ITA - 1192 / 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 for the foreign companies. Consequently, no Tax Deducted at Source (TDS) was deductible by the assessee.

What were the facts?

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

What were the issues?

The primary issue was whether payments made for software usage constituted royalty or business income, and consequently, whether TDS was deductible under Section 195 of the Income Tax Act.

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

(3)

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.

.. 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. SIKRI THE HON'BLE MR. JUSTICE SIDDHAR

The order continues below.

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