THE COMMISSIONER OF INCOMET AX vs. SAHARA AIRLINES LTD.

ITA - 1199 / 2009HC Delhi21 December 20095 pages
For Petitioner: RASHMI CHOPRA
AI SummaryDismissed

What did the High Court hold?

The High Court held that the payments made by the assessee were not in the nature of royalty but constituted business income in the hands of the foreign companies. Consequently, no tax deduction at source was required.

What were the facts?

The assessee made payments to two foreign companies, Amadeus Marketing and Galileo International, for using their software for ticket reservations. The Assessing Officer treated these payments as royalty and sought tax deduction at source. The assessee argued that the services were rendered outside India and income accrued abroad, thus no tax was deductible.

What were the issues?

Whether payments made for the use of software by foreign companies constitute royalty or business income, and consequently, whether tax is deductible at source under Section 195(2) of the Income Tax Act.

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

+ 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. 16100/2009

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'B

The order continues below.

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