The Commissioner of Income-tax, Bangalore / The Asst. Commissioner of Income-tax Circle-12(2), Bangalore v. Rational Software Corporation India Pvt. Ltd
[Citation -2015-LL-0105-34]
| Citation | 2015-LL-0105-34 |
|---|---|
| Appellant Name | The Commissioner of Income-tax, Bangalore / The Asst. Commissioner of Income-tax Circle-12(2), Bangalore |
| Respondent Name | Rational Software Corporation India Pvt. Ltd. |
| Court | HIGH COURT OF KARNATAKA |
| Relevant Act | Income-tax |
| Date of Order | 05/01/2015 |
| Assessment Year | 2003-04 |
| Judgment | View Judgment |
| Keyword Tags | software products • deduction of tax • remittances • royalty • dtaa |
| Bot Summary: | In the event, the assessee succeeds before the Apex Court, then Section 40(a)(i) of the Act is not attracted and therefore, a 4 consequent order is to be passed. Even if the assessee does not succeed before the Apex Court and Section 40(a)(i) of the Act is attracted, still its claim in terms of Article 24(4) of DTAA between India and the Netherlands that a similar disallowance was not provided under the Act under Section 40(a)(ia) if the payment was made to a resident, is to be considered and a proper order is to be passed. In view of the judgment of this Court in Samsung Electronics Private Limited case, as already the earlier order of the Tribunal is set aside by this Court, the impugned order passed, which is running counter to the said judgment, requires to be set 5 aside and therefore, the appeal is allowed and the substantial question of law is answered in favour of the revenue and against the assessee. In the event, the assessee succeeds before the Apex Court, it is clear that this order also cannot come into effect. The assessing authority shall therefore pass an order under Section 260(1A) of the Act, based on the outcome of the assessee s appeal before the Apex Court. If the assessee loses his battle before the Apex Court, then before giving effect to this order, the assessing authority shall consider the application of Article 24(4) of the DTAA between India and the Netherlands. Though the said question is not raised by the assessee before the authorities, the same being purely a question of law and the said DTAA being a beneficial piece of delegated legislation, if the assessee is entitled to the benefit of the same, that cannot be 6 denied to it. |