LITTLE EYE SOFTWARE LABS PRIVATE LIMITED

1 IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 26TH DAY OF MAY 2021 PRESENT THE HON’BLE MR. JUSTICE ALOK ARADHE AND THE HON’BLE MR.JUSTICE HEMANT CHANDANGOUDAR I.T.A. NO.210 OF 2016 BETWEEN: 1. THE PR. COMMISSIONER OF INCOME-TAX

5TH FLOOR, BMTC BUILDING

80 FEET ROAD, KORMANGALA

BANGALORE-560095. 2. THE INCOME-TAX OFFICER

WARD-11(1), 2ND FLOOR

BMTC BUILDING, 80 FEET ROAD

KORMANGALA, BANGALORE-560095.

... APPELLANTS (BY SRI. ARAVIND K.V. ADV.,) AND: M/S. CERNER HEALTH CARE SOLUTIONS P. LTD., BANGALORE-560034 PAN:AACCC3795R.

... RESPONDENT (BY SRI. KAMAL SAWHNEY, ADV., FOR M/S. KAMATH AND KAMATH) - - - THIS I.T.A. IS FILED UNDER SECTION 260-A OF I.T.ACT, 1961 ARISING OUT OF ORDER DATED 04.09.2015

2 PASSED IN ITA NO.1509/BANG/2012, FOR THE ASSESSMENT YEAR 2008-09, ANNEXURE-C, PRAYING TO:

I. FORMULATE THE SUBSTANTIAL QUESTIONS OF LAW STATED ABOVE. II. ALLOW THE APPEAL AND SET ASIDE THE ORDERS PASSED BY THE ITAT, BANGALORE IN

ITA N.1509/BANG/2012 DATED 04.09.2015, ANNEXURE-C, CONFIRMING THE ORDER OF THE APPELLATE COMMISSIONER AND CONFIRM THE ORDER PASSED BY THE INCOME TAX OFFICER, WARD-11(1), BENGALURU. III. PASS SUCH OTHER SUITABLE ORDERS AS THIS HON'BLE COURT DEEMS FIT TO GRANT IN THE FACTS AND CIRCUMSTANCES OF THE CASE IN THE INTEREST OF JUSTICE AND EQUITY. THIS I.T.A. COMING ON FOR HEARING, THIS DAY, ALOK ARADHE J., DELIVERED THE FOLLOWING: JUDGMENT Mr.K.V.Aravind, learned counsel for the revenue. Mr.Kamal Sawhney, learned counsel for the assessee. 2. This appeal under Section 260-A of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’, for short) has been filed by the revenue against the order dated 04.09.2015 passed by the Income Tax Appellate Tribunal. The subject matter of the appeal pertains to Assessment Year 2008-09. The appeal was admitted by a Bench of this Court vide order dated 31.07.2018 on the following substantial questions of law:

3 "a) Whether on the facts and in the circumstance of the case, the Tribunal, was justified in holding that the tax is not deductable at source under section 195 of the Act on the amount of Rs.4,09,77,678/- being reimbursement of expenses paid to M/s. Cerner Corporation, USA when all the ingredients of said section are satisfied attracting disallowance under section 40(a)(ia) for non deducting TDS? b) Whether on the facts and in the circumstances of the case, the Tribunal, was justified in setting aside the re-computation of section 10A made by assessing authority by following the decision of this Hon'ble Court in the case of CIT vs. Tata Elxsi (reported in 349 ITR page 98) when said decision has not reached finality and SLP preferred by Revenue before Supreme Court is pending? 3. When the matter was taken up today, learned counsel for the assessee submitted that the first substantial question of law has been answered in favour of the assessee by a Bench of this Court in 'COMMISSIONER OF INCOME TAX Vs. HEWLETT PACKARD GLOBAL SOFT LTD.' (2017) 82 TAXMANN.COM 182 (KAR) as well as decision of Bombay High Court in 'CIT Vs. GEMS PLUS JEWELLERY

4 INDIA LIMITED' (2011) 330 ITR 175 (BOMBAY) and the second substantial question of law has been answered in favour of the assessee by the Supreme Court in 'CIT Vs. HCL TECHNOLOGIES LTD.' (2018) 404 ITR 719 (SC). Learned counsel for the assessee has further submitted that the first substantial question of law has been rendered academic. 4. On the other hand, learned counsel for the revenue fairly submitted that the first substantial question of law has been rendered academic. However, the finding of the Tribunal with regard to this substantial question of law may not be treated as precedent in other cases. 5. In reply, learned counsel for the assessee submitted that in fact, the finding recorded by the Tribunal is based on the decision of the Tribunal in the case of IDS Software India P. Ltd. in ITA No.87/Bang/2008 decided on 21.01.2009 and the Tribunal in the instant case has merely followed its earlier decision.

5 6. We have considered the submissions made on both sides and have perused the record. Admittedly, the first substantial question of law has been rendered academic. Therefore, it is not necessary for us to answer the same. However, it is directed that the finding of the Tribunal with regard to the first substantial question of law shall not be treated as a precedent and it shall be open for the parties to argue the same in an appropriate case even in subsequent years. 7. Insofar as the second substantial question of law is concerned, the same has been answered by the Supreme Court in HCL TECHNOLOGIES (supra). Accordingly, the same is answered against the revenue and in favour of the assessee. In the result, the appeal is disposed of. Sd/- JUDGE Sd/- JUDGE RV