Advertisement charges paid to non-resident company cannot be considered as royalty

Last updated: 07 September 2021

Court :
Karnataka High Court

Brief :
In M/s. Myntra Designs Pvt. Ltd. v. Deputy Commissioner of Income-tax [IT(IT)A Nos.598 to 600/Bang/2020 dated September 3, 2021], M/s. Myntra Designs Pvt. Ltd. ("the Applicant") filed three appeals in Hon'ble ITAT, Bangalore challenging the common order dated March 16, 2020 ("the Order") passed by Ld. CIT(A), Bengaluru w.r.t. assessment years 2012-13 to 2015-16. In all the three years, the Ld. CIT(A) has confirmed the demand raised by the Assessing Officer ("the AO") under Section 201(1) of the Income Tax Act, 1961 ("the IT Act") along with interest under Section 201(1A) of the IT Act by treating the Applicant as an 'assessee in default' for non-deduction of tax at source ("TDS") from the payments made to M/s Facebook Ireland ("Non-resident Company") towards advertisement fees.

Citation :
IT(IT)A Nos.598 to 600/Bang/2020 dated September 3, 2021