High Court of Karnataka at Bengaluru · Judgments and reasoned final orders
Solize Partners India Pvt. Ltd. v. The Income Tax Officer, International Taxation, Ward 1(1), Bangalore
Income Tax Appeal No. 181 of 2014 ·
Payments by Indian reseller to non-resident software owners for purchase of standardized/shrink-wrapped computer software licenses do not constitute 'royalty' under section 9(1)(vi) or DTAA Article 12; Engineering Analysis applied.
1. FACTS OF THE CASE
For AY 2010-11, Solize Partners India Pvt. Ltd., engaged in the resale of computer software licenses, installation, training and technical consultation, filed nil original and revised returns. The AO treated payments made to non-resident software owners for purchase of standardized software as 'royalty' under section 9(1)(vi) and the applicable DTAAs (and passed a suo-moto section 154 rectification order recomputing tax). The CIT(A)-IV, Bengaluru (order dated 29.05.2012) and the ITAT (in ITA No. 936/Bang/2012) upheld the AO's order following CIT v. Samsung Electronics Co. Ltd.
2. DISCUSSION BY THE COURT
The Division Bench noted that the substantial questions of law raised by the assessee were identical to those rejected in the Revenue's appeal in ITA No. 698/2023 (decided 12.08.2025) and stood authoritatively answered in favour of the taxpayer by the Supreme Court in Engineering Analysis Centre of Excellence Pvt. Ltd. v. CIT & Anr., (2022) 3 SCC 321.
3. JUDICIAL DECISION
Allowing the assessee's appeal, the High Court answered the substantial questions of law in favour of the assessee and against the Revenue, holding the appellant-assessee entitled to all consequential benefits.
4. OUTCOME
In favour of the assessee (Solize Partners India Pvt. Ltd.); appeal allowed with all consequential benefits.
5. AKHB REVIEW POINT
AKHB analysis: Long-pending assessee appeals from the pre-2021 Samsung Electronics era in Karnataka High Court on shrink-wrapped/standardized software resale payments are squarely governed by Engineering Analysis, entitling the taxpayer to full consequential refund of tax and interest collected under section 195/201/154.
Source and verification
Reviewed from the complete 6-page official High Court judgment PDF (20260806_KAHC010162072014.pdf, SHA-256: 1b0ccda00a9534059809166bc42a5f20c645737fb5c7e579437030570310b9e4).
Original PDF: 6 pages · SHA-256: 1b0ccda00a9534059809166bc42a5f20c645737fb5c7e579437030570310b9e4
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