Principal Commissioner of Income Tax & Anr. v. Misys Software Solutions India Pvt. Ltd.

1. FACTS OF THE CASE

Revenue’s ITA810/2018 challenged the Tribunal’s 1 June 2018 order in IT(TP)A306/Bang/2014 for AY2008–09. The admitted question concerned section10A treatment of income from on-site software development, including Revenue’s objection that the work was unrelated to the Indian STP unit and that the Mphasis precedent had not attained finality.

Source: Opening and para3, PDF pp.2–3

2. DISCUSSION BY THE COURT

The issue was stated to be covered by CIT-III v. Mphasis Software & Service India (P.) Ltd., (2015)62 taxmann.com165 (Karnataka). The judgment records the further submission that its principle had been affirmed by the Supreme Court’s 20 September 2021 order in SLP(C)Diary29199/2019. The Court disposed of the question on that basis without fresh detailed analysis of the development contracts.

Source: Para4, PDF pp.3–4

3. JUDICIAL DECISION

The substantial question was answered in favour of the assessee and against Revenue. The appeal was disposed of accordingly.

Source: Paras5–6, PDF p.4

4. OUTCOME

Final assessee-favourable result on the section10A on-site-development issue for AY2008–09, following Mphasis. No deduction amount or fresh factual test was quantified in this short judgment.

Source: Paras3–6, PDF pp.3–4

5. Expert Comments

AKHB editorial analysis, distinct from the Court’s findings.

Distinguish the challenge from the answer

The admitted question sets out Revenue’s assertion that the on-site work was unrelated to the Indian STP unit. That assertion is not a High Court factual finding against Misys: the Court answered the issue for the assessee on the cited Mphasis position. A summary must not transplant the question’s adverse wording into the holding.

Source: PDF p.3 · PDF p.4

Use the incorporated reasoning for a new factual setting

This decision confirms the result for Misys but does not reproduce Mphasis’s complete reasoning or examine the contracts afresh. Applying it to another on-site arrangement requires the underlying authority and the relevant section10A facts. The Supreme Court order is identified as recorded here; its contents and subsequent treatment have not independently been reviewed in this packet.

Source: PDF p.3 · PDF p.4