THE COMMISSIONER OF INCOME TAX vs. SAHARA AIRLINES LTD.

ITA - 1179 / 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. Therefore, no Tax Deducted at Source (TDS) was deductible by the assessee.

What were the facts?

The assessee airline made payments to foreign companies for using reservation software. The Assessing Officer treated these payments as royalty and sought tax deduction. The assessee argued the income accrued outside India and was business income, not royalty.

What were the issues?

Whether payments for software usage to foreign companies constitute royalty for tax deduction purposes, and if income accrued outside India.

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 TA 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

thrôugh:

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 HO

The order continues below.

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