ACER INDIA PRIVATE LIMITED vs DEPUTY COMMISSIONER OF INCOME TAX

IN THE HIGH COURT OF KARNATAKA AT BENGALURU

DATED THIS THE 24TH DAY OF JUNE, 2021

PRESENT

THE HON'BLE MR. JUSTICE SATISH CHANDRA SHARMA

AND

THE HON'BLE MR. JUSTICE NATARAJ RANGASWAMY

ITA NO.27/2021 BETWEEN:

ACER INDIA PRIVATE LIMITED EMBASSY HEIGHTS 6TH FLOOR, NO.13, MAGRATH ROAD NEXT TO HOSMAT HOSPITAL, BENGALURU-560025 PAN AACCA1237A REPRESENTED BY CEO ALOK DUBEY …APPELLANT (BY SRI.ANKUR PAI DHUNGAT, ADV.)

AND:

DEPUTY COMMISSIONER OF INCOME TAX (INTERNATIONAL TAXATION) CIRCLE 1(1),ROOM NO.441,4TH FLOOR BMTC BUILDING, 80 FT ROAD KORAMANGALA BENGALURU-560095

… RESPONDENT (BY SRI.K.V.ARAVIND, ADV.,)

THIS APPEAL IS FILED UNDER 260-A OF INCOME TAX ACT 1961, ARISING OUT OF ORDER DATED: 05.10.2020 PASSED IN IT(IT)A NO.111/BANG/2018 AND IT(IT)A NO.112/BANG/2018 (ANNEXURE-C), FOR THE ASSESSMENT YEAR 2012-2013 AND ETC.

THIS APPEAL COMING ON FOR HEARING THIS DAY, SATISH CHANDRA SHARMA J., DELIVERED THE FOLLOWING:

JUDGMENT

Sri Ankur Pai Dhungat, learned Counsel for the respondents, has fairly informed before this Court that the substantial questions of law deserve to be answered in favour of the assessee and against the Revenue in the light of the judgment delivered by the Hon’ble Supreme Court in case of ENGINEERING ANALYSIS CENTRE OF EXCELLENCE PRIVATE LIMITED Vs. THE COMMISSIONER OF INCOME TAX AND ANOTHER (Civil appeal No.8733-8734/2018 decided on 02.03.2021).

This Court has framed the following questions of law on 15.04.2021: 1. The Tribunal was justified in holding that the amounts paid by the Appellant to its group company in Malaysia for procuring software amounted to ‘royalty’ as defined under Explanation 2 to Section 9(1)(vi) of the Income- tax Act, 1961, and under Article 12 of the DTAA, thereby giving rise to an income chargeable to tax in India?

The Tribunal was right in holding against the Appellant on the issue of taxability of payments made by it for procurement of software by merely

following this Hon’ble Court’s decision dated 15.10.2011 in the case of Samsung Electronics Co. Limited (2011) 345 ITR 494 (Karnataka), though the said judgement of this Hon’ble Court has not been accepted and the SLP filed against it is pending before the Hon’ble Supreme Court?

This Court has carefully gone through the entire record and has also heard learned Counsel for the parties at length.

In the light of the judgment delivered by the Hon’ble Supreme Court in case of Engineering Analysis Centre Of Excellence Private Limited (supra), the substantial questions of law are to be answered in favour of the assessee and, accordingly, they are answered in favour of the assessee and against the Revenue. Resultantly, the appeal sands disposed of.

Sd/- JUDGE

ACER INDIA PRIVATE LIMITED vs. DEPUTY COMMISSIONER OF INCOME TAX