PR COMMISSIONER OF INCOME TAX-5 vs. M/S NOVELL SOFTWARE DEVELOPMENT (INDIA)

IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 8TH DAY OF MARCH 2021 PRESENT THE HON'BLE MR. JUSTICE ALOK ARADHE AND THE HON'BLE MR. JUSTICE ASHOK S. KINAGI I. T. A. NO.272 OF 2017 BETWEEN: 1. PR. COMMISSIONER OF

INCOME TAX-5, BMTC COMPLEX

KORAMANGALA, BANGALORE 2. DEPUTY COMMISSIONER OF INCOME TAX

CIRCLE 5(1)(2),

BANGALORE. … APPELLANTS (BY SRI. SANMATHI E.I., ADVOCATE) AND: M/S NOVELL SOFTWARE DEVELOPMENT (INDIA) PVT. LTD., 'LAUREL', BLOCK-D, 65/2 BAGMANE TECH PARK C.V. RAMAN NAGAR BYRASANDRA, BANGALORE - 93 … RESPONDENT (BY SRI. SURYANARAYANA T., ADVOCATE)

2 THIS ITA IS FILED UNDER SECTION 260-A OF I.T. ACT, 1961, ARISING OUT OF ORDER DATED:30.09.2016 PASSED IN C.O. No.101/BANG/2015, IN IT(TP)A No.281/BANG/2015 FOR THE ASSESSMENT YEAR 2010-2011 VIDE ANNEXURE - 'A' PRAYING TO (I) DECIDE THE FOREGOING QUESTION OF LAW AND/OR SUCH OTHER QUESTIONS OF LAW AS MAY BE FORMULATED BY THE HON'BLE COURT AS DEEMED FIT (II) SET ASIDE THE APPELLATE ORDER DATED:30.09.2016 PASSED BY THE INCOME TAX APPELLATE TRIBUNAL 'A' BENCH, BENGALURU, IN APPEAL PROCEEDINGS C.O.NO. 101/BANG/2015 IN IT(TP)A No.281/BANG/2015 FOR ASSESSMENT

YEAR 2010-2011 VIDE ANNEXURE -'A'. THIS ITA COMING ON FOR ORDERS THIS DAY, ALOK ARADHE J., DELIVERED THE FOLLOWING: JUDGMENT Mr. E.I.Sanmathi, learned counsel for the Revenue. Mr. Suryanarayana T., learned counsel for the assessee. 2. This appeal under Section 260-A of the Income Tax Act, 1961, has been filed by the Revenue against the order dated 30.09.2016, passed by the Income Tax Appellate Tribunal. The appeal pertains to the assessment year 2010- 2011. This appeal was admitted by a Bench of this Court vide order dated 09.11.2018, on the following substantial questions of law:

3 "1. Whether on the facts and in the circumstances of the case, the Tribunal is right in law in setting aside disallowance of depreciation claimed on Software Expenses under section 40(a) (ia) of the Act by following its earlier order in case of Kawasaki Micro Electronics in IT(TP)A No.1512/Bang/2010 dated:26.06.2015 even when assessing authority rightly held that payment for purchase of software was in the nature of 'royalty' in terms of Explanation 2 to Section 9(1) (vi) of the Act? 2. Whether on the facts and in the circumstances of the case, the Tribunal is right in setting aside disallowance made under Section 14A of the Act without the same is made in accordance with Rule 8D of I.T. Rules."?. 3. When the matter was taken up today, learned counsel for the assessee submitted that the issues involved in this appeal stand concluded against the Revenue and in favour of the assessee in view of the decisions rendered by this Court in ITA No.199/2017 dated 16.12.2020 [PR.COMMISSIONER OF INCOME TAX-7 & ANR. VS. M/S. TALLY SOLUTIONS PVT. LTD.] and in ITA No.133/2015 dated 15.02.2021 [THE COMMISSIONER OF INCOME-TAX & ANR. VS. M/S. QUEST GLOBAL ENGINEERING].

4 4. Learned counsel for the Revenue was unable to dispute the aforesaid submission. 5. For the reasons assigned in the aforesaid judgments rendered by this Court in ITA Nos.199/2017 and 133/2015, the substantial questions of law involved in this appeal are answered against the Revenue and in favour of the assessee. In the result, we do not find any merit in the appeal and the same is hereby dismissed. SD/- JUDGE SD/- JUDGE RD