THE PR COMMISSIONER OF INCOME TAX vs M/S SASKEN TECHNOLOGIES LTD

IN THE HIGH COURT OF KARNATAKA AT BENGALURU

DATED THIS THE 3RD DAY OF SEPTEMBER, 2021

PRESENT

THE HON’BLE MRS.JUSTICE S.SUJATHA

AND

THE HON’BLE MR. JUSTICE RAVI V. HOSMANI

I.T.A.No.55/2021

BETWEEN :

1 . THE PR. COMMISSIONER OF INCOME TAX, 5TH FLOOR, BMTC BUILDING 80 FEET ROAD, KORAMANGALA BENGALURU-560095

2 . THE DEPUTY COMMISSIONER OF INCOME-TAX CIRCLE-6(1)(1) 2ND FLOOR, BMTC BUILDING, 6TH BLOCK 80 FEET ROAD, KORAMANGALA BENGALURU-560095

...APPELLANTS

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

AND :

M/s SASKEN TECHNOLOGIES LTD., (FORMERLY KNOWN AS SASKEN COMMUNICATION TECHNOLOGIES LTD.,) NO.139/25, AMARJYOTHI LAYOUT RING ROAD, DOMLUR BENGALURU-560071 PAN: AAECS6424R

…RESPONDENT

(BY SRI T.SURYANARAYANA, ADV. A/W Ms. MANASA ANANTHAN, ADV.)

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THIS INCOME TAX APPEAL IS FILED UNDER SECTION 260-A OF INCOME TAX ACT 1961, ARISING OUT OF ORDER DATED 16.10.2019 PASSED IN ITA NO.1731/BANG/2018, FOR THE ASSESSMENT YEAR 2009-2010. PRAYING TO 1. FORMULATE THE SUBSTANTIAL QUESTIONS OF LAW STATED ABOVE. 2. ALLOW THE APPEAL AND SET ASIDE THE ORDERS PASSED BY THE INCOME TAX APPELLATE TRIBUNAL, BENGALURU IN ITA NO.1731/BANG/2018 DATED 16.10.2019 FOR ASSESSMENT YEAR 2009-2010 ANNEXURE-C CONFIRMING THE ORDER OF THE APPELLATE COMMISSIONER AND CONFIRM THE ORDER PASSED BY THE DEPUTY COMMISSIONER OF INCOME TAX, CIRCLE-6(1)(1), BENGALURU.

THIS APPEAL COMING ON FOR ADMISSION, THIS DAY, S. SUJATHA, J., DELIVERED THE FOLLOWING:

J U D G M E N T

This appeal is filed by the revenue under section 260A of the Income Tax Act, 1961 assailing the order of the Income Tax Appellate Tribunal, “C” Bench, Bangalore (‘Tribunal’ for short), dated 16.10.2019 passed in ITA No.1731/Bang/2018 relating to the assessment year 2009-10, raising following substantial questions of law:- “1. Whether on the facts and in the circumstances of the case, the Tribunal is right in law confirming the order passed by CIT(A) holding that Royalty Income has to be treated as Income

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from business even when Royalty Income was not derived from business carried by assessee but was only attributable to business of the assessee? 2. Whether on the facts and in the circumstances of the case, the Tribunal’s order can be said as perverse in nature in confirming the order passed by CIT(A) holding that Royalty Income has to be treated as Income from business even when Royalty Income was not derived from business carried by assessee but was only attributable to business?”

At the outset, the learned counsel for the assessee placing reliance on the judgment of the co- ordinate bench of this Court passed in the case of very same assessee in ITA No.264/2017 dated 05.11.2018 would contend that the very identical substantial questions of law raised by the revenue were considered and answered by this Court. This Court, recording that the substantial questions of law raised being covered by

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the judgment of this Court in the case of Commissioner of Income-tax, Central Circle vs. Motorola India Electronics (P) Ltd., reported in (2014) 46 taxmann.com 167 (Karnataka) was pleased to dismiss the appeal. Hence, the substantial questions of law raised herein, being identical, the appeal deserves to be dismissed answering the substantial questions of law raised, against the revenue and in favour of the assessee.

Learned counsel for the revenue made an endeavor to distinguish the judgments of the co- ordinate bench decision in the very same assessee’s case referred to supra, referring to the following judgments:- 1) Commissioner of Income-tax vs. Meghalaya Steels Ltd., [(2016) 67 taxmann.com 158 (SC)]; 2) Commissioner of Income-tax vs. Sasken Communication Technologies Ltd., [(2014) 50 taxmann.com 134 (Karnataka)];

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3) Commissioner of Income-tax vs. Yokogawa India Ltd., [(2017) 77 taxmann.com 41 (SC)]; 4) Commissioner of Income-tax, Central Circle vs. Motorola India Electronics (P.) Ltd., [(2014) 46 taxmann.com 167 (Karnataka)]; 5) Commissioner of Income-tax – VII, New Delhi vs. Punjab Stainless Steel Industries [(2014) 46 taxmann.com 68 (SC)]; 6) Commissioner of Income-tax vs. Hewlett Packard Global Soft Ltd., [(2017) 87 taxmann.com 182 (Karnataka) (FB)]; 7) Commissioner of Income tax, Central – III vs. HCL Technologies Ltd., [(2018) 93 taxmann.com 33 (SC)]; 8) M/s. Tata Elxsi Limited vs. The Assistant Commissioner of Income Tax, Bangalore (ILR 2015 KAR 1739).

It is not in dispute that the judgment of this Court in ITA No.264/2017 dated 05.11.2018 has been carried by the revenue in appeal before the Hon’ble Apex

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Court in SLP No.21055/2019 which is pending consideration. In view of the aforesaid, we are not inclined to either differ from the judgment of the co- ordinate bench or venture to sit in judgment over the said decision to adjudicate upon the issues fully covered and decided, referring to the judgments now cited by the revenue.

Accordingly, answering the substantial questions of law raised herein, against the revenue and in favour of the assessee, we dismiss the appeal.

Sd/- JUDGE

PMR

THE PR COMMISSIONER OF INCOME TAX vs. M/S SASKEN TECHNOLOGIES LTD