2024 (9) TMI 1677 - HC - Income Tax

Accrual of income in India or not? - royalty income - interconnect service charges - HELD THAT - As decided in M/S. VODAFONE IDEA LIMITED 2023 ( 7) TMI 1164 - KARNATAKA HIGH COURT held that tax is not deductable when payment is made to non-resident telecom operator. This factual aspect is not refuted. No infirmity in the orders under challenge.

Summary

In the case before the Karnataka High Court, the primary legal issue was whether interconnect service charges should be classified as royalty. The court referenced a prior decision by a Co-ordinate Bench in ITA No. 160/2015, where it was determined that such charges do not constitute royalty. The judgment highlighted a specific argument that payments made to non-resident telecom operators for interconnect services are not subject to tax as royalty, as supported by the ITAT's findings in similar cases. The court found no error in the orders being challenged and, relying on the precedent set by the Co-ordinate Bench, dismissed the appeal.