THE COMMISSIONER OF INCOMET AX vs. SAHARA AIRLINES LTD.

ITA - 1186 / 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 of the foreign companies. Therefore, no tax deduction at source was required on these payments.

What were the facts?

The assessee made payments to foreign companies (Amadeus Marketing and Galileo International) for software used in ticket reservations. The Assessing Officer considered these payments as royalty and sought tax deduction at source. The assessee argued that the services were rendered outside India and the income accrued offshore.

What were the issues?

The primary issue was whether payments made for software usage to foreign companies constituted royalty income subject to TDS, or business income not subject to TDS in 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 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 SIDDHARTH

The order continues below.

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