Interconnect service charges are not royalty; Karnataka High Court followed prior coordinate Bench ruling and dismissed the appeal.

Interconnect service charges were held not to constitute royalty and therefore not chargeable to tax as royalty. The Karnataka High Court followed its earlier coordinate Bench ruling in connected appeals, found no infirmity in the orders under challenge, and answered the issue against the Revenue and in favour of the assessee, with the appeal dismissed.

---

---

Issues: Whether interconnect service charges paid would constitute royalty and be chargeable to tax as such.

Analysis: The issue had already been decided by a coordinate Bench of the same Court in connected appeals, where it was held that interconnect service charges do not constitute royalty. The earlier decision was followed, and no infirmity was found in the orders under challenge.

Conclusion: The issue was answered against the Revenue and in favour of the assessee. The appeal was dismissed following the earlier coordinate Bench decision.

---