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DELHI HIGH COURT
MANMOHAN, MANMEET PRITAM SINGH ARORA
Commissioner of Income Tax-International Taxation-2 – Appellant
Versus
Mol Corporation – Respondent
| Table of Content |
|---|
| 1. appeal was filed against itat's remand order. (Para 1) |
| 2. counsel disputes coverage of supreme court judgment. (Para 2 , 3 , 4) |
| 3. subsequent itat decisions influence case outcome. (Para 5) |
| 4. present appeal deemed infructuous. (Para 6) |
JUDGMENT
Manmohan, J. (Oral):
1. Present appeal has been filed by the revenue challenging the remand order passed by the Income Tax Appellate Tribunal (`ITAT'). The relevant portion of the impugned order is reproduced hereinbelow:
"8. We, therefore, by considering the aforesaid referred to facts and by respectfully following the order dated 26.09.2016 ITA Nos. 6089 to 6091/Del/2012 and 1969/Del/2014 in assessee's own case set aside this issue back to the file of the AO to be adjudicated afresh in accordance with law as has been directed in the aforesaid referred to order dated 26.09.2016."
2. Learned counsel for the appellant/revenue submits that the ITAT instead of remanding the matter to the Assessing Officer to decide the issue of royalty in accordance with the judgment of this Court in DIT versus Infrasoft Ltd. should have decided the issue itself.
3. It is pertinent to mention that after passing of the impugned orders by th
The court ruled that remand orders by the ITAT for reassessing royalty issues were appropriate and subsequent adjudications made the appeal infructuous.
Taxation of software sales classified as copyrighted articles is not subject to royalty under DTAA; remand for reassessment aligns with established legal precedents.
The court determined appeals became irrelevant following favorable rulings on tax obligations by the Income Tax Appellate Tribunal.
The main legal point established in the judgment is the application of the Supreme Court judgment in determining the classification of income under the 'royalty' definition.
Income from the supply of CAS and middleware products does not constitute 'royalty' under the Income Tax Act or the India-Swiss DTAA, as reaffirmed by the Supreme Court.
Payments for software deemed to be for copyrighted articles are not taxable as royalty, as established by precedent concerning copyright transfer under tax law.
The principle of judicial discipline mandates that the High Court is bound to follow the judgment and order of the apex Court till it is set aside.
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