Interconnect Charges Not Royalty Due to Binding Precedent, Karnataka HC Dismisses Appeal

DCIT Vs Orange (Karnataka High Court) The Karnataka High Court dismissed the Revenue’s appeal concerning the taxability of interconnect service charges, specifically whether such payments qualify as “royalty.” The Court noted that the issue had already been examined by a Co-ordinate Bench in an earlier judgment dated 14.07.2023, which held that payments made for interconnect services and transfer of telecom capacity do not constitute royalty. It was also observed that, in subsequent assessment years, the Income Tax Appellate Tribunal had held that tax was not deductible on such payments ...