THE COMMISSIONER OF INCOME TAX vs. M/S WIPRO HEALTHCARE IT LTD

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ITA/835/2009HC KarnatakaKAHC01087252200904 January 2016Bench: S.SUJATHA,N.K.PATIL3 pages
AI SummaryDismissed

What did the High Court hold?

The High Court disposed of the appeal by following a circular which stated that appeals involving amounts less than Rs. 20 lakhs were not maintainable. Therefore, the ITAT's decision on the royalty issue was not disturbed.

What were the facts?

The Revenue appealed against an ITAT order that held payments for a software license were not royalty. The assessee argued the appeal was not maintainable as the payment was less than Rs. 20 lakhs, citing a circular.

What were the issues?

Whether payments for a software license constitute royalty and if the appeal is maintainable before the High Court based on the monetary limit specified in a circular.

Which sections of the Income-tax Act were involved?

Section 40(a)(i),Section 260-A

AI-generated summary — verify with the full judgment below

IN THE HIGH COURT OF KARNATAKA AT BENGALURU

DATED THIS THE 4TH DAY OF JANUARY, 2016

PRESENT

THE HON'BLE MR. JUSTICE N.K. PATIL

AND

THE HON’BLE MRS. JUSTICE S.SUJATHA

ITA No.835/2009

BETWEEN

1.

The Commissioner of Income-tax

Central Circle

C R Building

Queens Road

Bangalore.

2.

The Assistant Commissioner of Income-Tax

Circle-12(5)

C R Building, Queens Road

Bangalore. …Appellants (By Sri K.V. Aravind, Advocate)

AND

M/s. Wipro Healthcare IT Ltd., Dodakannelli Sarjapur Road Bangalore-560 035. …Respondent

(By Smt. S.R. Anuradha, Advocate)

This Income-tax appeal is filed under Section 260- A of Income-tax Act,1961, to set aside the order passed by the ITAT Bangalore in ITA No.4/BNG/2008, dated 17.07.2009, and confirm the order passed by the Appellate Commissioner confirming the order passed by

the Assistant Commissioner of Income-tax, Circle-12(5), Bangalore, in the interest of justice and equity.

This appeal coming on for Hearing this day, N.K. Patil, J., delivered the following:

JUDGMENT

This appeal is by the revenue questioning the correctness of the order dated 17.7.2009 passed in ITA No.4/BNG/2008 on the file of the Income Tax Appellate Tribunal, Bangalore and confirm the order passed by the Appellate Commissioner confirming the order passed by the Assistant Commissioner of Income Tax, Circle – 12[5], Bangalore, to consider the following substantial question of law.

‘Whether the Appellate Authorities were correct in holding that the payments made by the assessee of Rs.18,05,760/- for obtaining Sql Cal License for a right to use the software product under an agreement cannot be treated as royalty payment and consequently TDS under Section 40[a][1] of the Act was not mandatory and deduction should be allowed?”

2.

Heard the learned counsel appearing for the appellants and learned counsel appearing for the respondent.

3.

At the outset, learned Counsel for the respondent submitted that in view of the Circular bearing No.21/2015 dated 10.12.2015, since the subject matter is less than Rs.20 lakhs, the appeal is not maintainable before this Court.

4.

In reply, learned Counsel for the appellants does not dispute the submission made by the learned counsel for the respondent.

5.

Submission of learned counsel for the parties is placed on record.

6.

This appeal is disposed of, following the circular bearing No.21/2015 dated 10.12.2015. Ordered accordingly.

Sd/- JUDGE

Sd/- JUDGE

AN/-

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