The Commissioner Of Income Tax - Internationaltaxation – 2 v. Mol Corporation

$~20 *IN THE HIGH COURT OF DELHI AT NEW DELHI +ITA 267/2017 THE COMMISSIONER OF INCOME TAX - INTERNATIONALTAXATION – 2..... Appellant ..... Appellant Through:Mr. Kunal Sharma, Advocate. versus % MOL CORPORATION CORAM:HON’BLE MR. JUSTICE MANMOHANHON’BLE MS. JUSTICE MANMEET PRITAM SINGH ARORA J U D G M E N T MANMOHAN, J (Oral): 1.Present appeal has been filed by the Revenue challenging the remandorder passed by the Income Tax Appellate Tribunal (‘ITAT’). The relevantportion of the impugned order is reproduced hereinbelow: “18. In view of the above facts it is apparent that after renderingof the decision of the tribunal based on which the reopening hasbeen initiated by revenue and addition has been made in thehands of the appellant, the decision of the Hon’ble Delhi highcourt in case of DIT versus Infrasoft limited covers the issue infavour of the assessee. As the lower authorities did not have anybenefit of the decision of the Hon’ble Delhi high court whiledeciding the issue about the taxation of copyrighted article i.e.the software being sold by the appellant but have solely relied upon the decision of the coordinate bench in case of M/sGracemac Corporation, it would be in the interest of the Justiceto set the whole issue back to the file of the Ld. assessing officerto decide it afreash after considering the decision of Hon’bleDelhi high court DIT versus Infrasoft Ltd (supra), applying it tonature of the software of the appellant, which covers the issuewith respect to the sale of software holding that according toarticle 12(3) of the Indo US DTAA, is a sale of ‘copyrightedarticle’, and is not chargeable to tax as ‘royalty’. In view of theabove, ground No.3 to ground number 4.13.4 of the appeal of theassessee are allowed with above direction.” 2.Learned counsel for the appellant/revenue submits that the ITATinstead of remanding the matter to the Assessing Officer to decide the issueof royalty in accordance with the judgment of this Court in DIT versusInfrasoft Ltd. should have decided the issue itself. 3.It is pertinent to mention that after passing of the impugned ordersby the ITAT, the Supreme Court in Engineering Analysis Centre ofExcellence Pvt. Ltd. vs. Commissioner of Income Tax & Anr., 2021 SCCOnLine SC 159 has confirmed the view taken by this Court in DIT versusInfrasoft Ltd. 4.However, learned counsel for the appellant/revenue states that thematter on merits is not covered by the judgment of the Supreme Court inEngineering Analysis Centre of Excellence Pvt. Ltd. (supra). Needless tostate learned counsel for the respondent/assessee states that matter in issue issquarely covered by the judgment of the Apex Court in EngineeringAnalysis Centre of Excellence Pvt. Ltd. (supra). 5.In any event, in pursuance to the impugned remand orders, theAssessing Officer, Dispute Resolution Panel (DRP) as well as ITAT havedecided the matter. In fact, the ITAT in its subsequent order dated 14[th] February, 2022 followed its own coordinate bench decision dated 16[th]November 2020, which order now stands confirmed by orders this courtdated 7[th]March, 2022 and 15[th]March, 2022. Similarly, ITAT in its orderdated 13[th]April, 2022 (passed during the pendency of the present appeals)has not only followed the decision of the Supreme Court EngineeringAnalysis Centre of Excellence Pvt. Ltd (supra) but has also followed thedecisions of this Court dated 15[th]March, 2022 and 7[th]March, 2022 wherebythe appeals filed by the Revenue against the respondent/assessee on similarquestions of law were dismissed. 6.Consequently, keeping in view the subsequent orders dated 14[th]February, 2022 and 13[th]April, 2022 deciding the issue of royalty by theITAT, this Court is of the view that the present appeal challenging the orderof remand and seeking a decision by the ITAT is infructuous. In fact, someof the cross-appeals filed by the respondent/assessee against the sameimpugned orders have today been dismissed as infructuous. 6.Consequently, keeping in view the subsequent orders dated 14[th]February, 2022 and 13[th]April, 2022 deciding the issue of royalty by theITAT, this Court is of the view that the present appeal challenging the orderof remand and seeking a decision by the ITAT is infructuous. In fact, someof the cross-appeals filed by the respondent/assessee against the sameimpugned orders have today been dismissed as infructuous. MANMOHAN, J MAY 19, 2022AS MANMEET PRITAM SINGH ARORA, J