ONMOBILE GLOBAL LIMITED V. THE COMMISSIONER OF

ITA/268/2012

AI Insights

The case involves Onmobile Global Limited, the appellant, contesting a decision regarding the classification of certain payments as 'royalty' under the Income-Tax Act, 1961, and the associated tax obligations. The appellant challenged the order of the Income Tax Appellate Tribunal (ITAT), which had upheld the classification of payments as royalty, necessitating tax deduction under Section 195 of the Act. The High Court's decision relied on a precedent set in the case of Samsung Electronics Co. Ltd., which the appellant argued was under appeal in the Supreme Court. However, the court noted that no stay had been granted by the Supreme Court on the earlier decision, thus it remained in effect.

• Counselvise Citation: [2016] 140 COUNSELVISE.COM (IT) 726943 (HC-KARNATAKA)
• Appeal Type: Others
• Pronouncement Date: 26-10-2016
• Assessment Year: misc
• Other Referred Cases: COMMISSIONER OF INCOME-TAX AND ANOTHER Vs. SAMSUNG ELECTRONICS CO. LTD.
• Laws Referred To: Income-Tax Act, 1961, DTAA
• Result in Favour of: Revenue
• Court: HIGH COURT
• Department Lawyers: K V ARAVIND
• Assessee Lawyers: TANMAYEE KUMAR
• Keywords: International Taxation; Royalty; Substantial questions of law; Tax Deduction
• Section: 195; 9(1)(vi); 260-A

Judgement Text

" 1 IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 26TH DAY OF OCTOBER 2016 PRESENT THE HON’BLE MR.JUSTICE JAYANT PATEL AND THE HON’BLE MR.JUSTICE ARAVIND KUMAR ITA NO.268 OF 2012 BETWEEN: ONMOBILE GLOBAL LIMITED NO.26, BANNERGHATTA ROAD J P NAGAR III PHASE BANGALORE-560 076 REPRESENTED BY ITS CHEIF FINANCIAL OFFICER MR RAJESH KUNNATH. … APPELLANT (BY Ms.TANMAYEE RAJ KUMAR FOR M/S. KING AND PATRIDGE, ADVs.) AND: 1. THE COMMISSIONER OF INCOME TAX, C R BUILDING QUEENS ROAD BANGALORE-560 001 2 2. THE INCOME TAX OFFICER (INTERNATIONAL TAXATION) WARD 1 (3), RASHTROTHANA BHAVAN, 14/3, 6TH FLOOR NRUPATHUNGA ROAD BANGALORE-560001 …RESPONDENTS (BY SRI K.V.ARAVIND, ADV.) THIS ITA IS FILED UNDER SECTION 260-A OF I.T. ACT, 1961, ARISING OUT OF ORDER DATED 29/03/2012 PASSED IN ITA NO.551/BANG/2011, FOR THE ASSESSMENT YEAR 2009-10 PRAYING TO I. FORMULATE THE SUBSTANTIAL QUESTIONS OF LAW STATED THEREIN, II. ALLOW THE APPEAL AND SET ASIDE THE ORDER OF THE ITAT, DATED 29/03/2012 IN ITA NO.551/BANG/2011, IN THE INTEREST OF JUSTICE AND EQUITY. THIS APPEAL COMING ON FOR ADMISSION THIS DAY, JAYANT PATEL J., DELIVERED THE FOLLOWING: 3 JUDGMENT The appellant – assessee has preferred the present appeal by raising the following substantial questions of law :- “1. Whether the Tribunal was right in placing reliance on its earlier decision in the case of Samsung Electronics co.Ltd., in ITA No.299/Bang/2011 dated 22.03.2012 where it followed the judgment of this Hon’ble Court also in the case of Samsung Electronics Co. Ltd. in ITA No.2808/2005 dated 15.10.2011, though the said judgment of this Hon’ble Court had not been accepted and the SLP filed against it is pending before the Hon’ble Supreme Court ? 2. Whether, on the facts, in the circumstances and on the grounds urged, the Tribunal was right or justified in confirming the order passed by the CIT(A) by holding that the payments made by the Appellant was ‘royalty’ as defined under 4 Explanation 2 to Section 9(1)(vi) of the Income-Tax Act, 1961, and under Article 12 of the applicable DTAA giving rise to an income chargeable to tax in India and necessitating deduction of tax under Section 195 of the Act ? 2. We have heard Ms. Tanmayee Rajkumar, learned counsel for the appellant-assessee and Mr. Aravind, learned counsel for the respondent – revenue. 3. It is undisputed position that the issue is already covered by the decision of this Court in the COMMISSIONER OF INCOME-TAX AND ANOTHER Vs. SAMSUNG ELECTRONICS CO. LTD., reported in (2012) 345 ITR 494 (KARN). The only contention raised by the learned counsel for the appellant – assessee was that they have preferred an appeal before the Apex Court and the matter is pending. When we further enquired from the learned counsel for the appellant as to whether 5 the Apex Court has stayed the operation and implementation of the order passed by this Court in the case of SAMSUNG ELECTRONICS CO. LTD., cited supra, she submitted that no stay has been granted. The resultant situation is that the decision of this Court in the case of SAMSUNG ELECTRONICS CO. LTD., cited supra operates. If the Tribunal has relied upon the decision of this Court and when the issue is already covered by the decision of this Court, we do not find any substantial question of law would arise for consideration. Hence the appeal is dismissed. SD/- JUDGE SD/- JUDGE NG* ct-*sk* "