THE COMMISSIONER OF INCOME TAX - INTERNATIONAL TAXATION -3 vs. VOLVO INFORMATION TECHNOLOGY AB SWEDEN

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ITA - 374 / 2024HC Delhi23 July 20243 pages
For Petitioner: RUCHIR BHATIA
AI SummaryDismissed

What did the High Court hold?

The High Court found that the appeal did not raise any substantial questions of law. The Tribunal's reliance on the Supreme Court's decision in Engineering Analysis Centre of Excellence Pvt. Ltd. was deemed appropriate, leading to the dismissal of the appeal.

What were the facts?

The Commissioner of Income Tax appealed an ITAT order concerning services provided by a Swedish parent company to its Indian group entities. The core of the dispute involved whether these services constituted royalty and the applicability of a Supreme Court judgment to related party transactions.

What were the issues?

Whether the ITAT erred in applying the Supreme Court's decision in Engineering Analysis Centre of Excellence Pvt. Ltd. to transactions between related parties, and whether software services constitute royalty.

Which sections of the Income-tax Act were involved?

Section 9,Section 115A

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$~97 & 98 * IN THE HIGH COURT OF DELHI AT NEW DELHI + ITA 374/2024 THE COMMISSIONER OF INCOME TAX - INTERNATIONAL TAXATION -3

.....Appellant Through: Mr. Ruchir Bhatia, SSC with Mr. Anant Mann, Ms. Pratyaksh Gupta, Mr. Pawan Gaur, Mr. Prakshit Gaur, Ms. A. Sabharwal, Advs.

versus

VOLVO INFORMATION TECHNOLOGY AB SWEDEN

.....Respondent Through: Mr. Ajay Vohra, Sr. Adv. with Mr. Neeraj Jain, Ms. Shaily Gupta, Ms. Somya Jain, Advs. 98

+ ITA 375/2024 THE COMMISSIONER OF INCOME TAX - INTERNATIONAL TAXATION -3

.....Appellant Through: Mr. Ruchir Bhatia, SSC with Mr. Anant Mann, Ms. Pratyaksh Gupta, Mr. Pawan Gaur, Mr. Prakshit Gaur, Ms. A. Sabharwal, Advs.

versus

VOLVO INFORMATION TECHNOLOGY AB SWEDEN

.....Respondent Through: Mr. Ajay Vohra, Sr. Adv. with Mr. Neeraj Jain, Ms. Shaily Gupta, Ms. Somya Jain, Advs.

CORAM:

HON'BLE MR. JUSTICE YASHWANT VARMA

HON'BLE MR. JUSTICE RAVINDER DUDEJA

O R D E R %

23.07.2024 CM APPL. 41244/2024 (Exemption) in ITA 374/2024

Allowed, subject to all just exceptions. This is a digitally signed order. The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 27/03/2026 at 12:31:43

This application stands disposed of. ITA 374/2024 & ITA 375/2024

1.

The Commissioner impugns the order of the Income Tax Appellate Tribunal [“Tribunal”] dated 20 December 2023 and has posited the following questions of law for our consideration:- “Whether on the facts and in the circumstances of the case and in law, the Ld. ITAT has erred on relying on the Judgment of the Hon'ble Supreme Court's in the case of Engineering Analysis Centre of excellence Pvt. Ltd. As the Apex Court's decisions applies to the transaction and exchange to resources between unrelated parties whereas in the instant case in transactions were made between the related parties or associated enterprise/parties who fall under the same Volvo umbrella globally? 2.2 Whether on the facts and in the circumstances of the case and in law, the Ld. ITAT has erred on relying on the Judgment of Hon'ble Supreme Court in the case of Engineering Analysis Centre of excellence Pvt. Ltd (Supra) as the aspect of Royalty where software can be treated as a process” 2. The issues themselves arise in the context of certain services which were extended by the parent entity and were availed of by the respondent assessee. The details of the services are duly captured in the order of the Assessing Officer and relevant parts whereof are extracted hereinbelow:- “5. Assessee company is a global organization, headquartered in Sweden and is a part of the Volvo group. The company is engaged in providing Information Technology ('IT’) solutions particularly catering to the IT needs of automotive industry. Apart from the third parties that it services, in the relevant assessment year, Assessee has also been involved in the provision of IT services to the Volvo group entities including the group entities in India. During the year under consideration the assessee has provided three type of services to Indian Group companies.”

3.

It is in the aforesaid context that the Tribunal rests its decision on Engineering Analysis Centre of Excellence Private Ltd. v. Commissioner of Income Tax [(2022) 3 SCC 321]. Bearing in mind This is a digitally signed order. The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 27/03/2026 at 12:31:43

the aforesaid, we find that the appeal fails to raise any substantial questions of law. It shall consequently stand dismissed.

YASHWANT VARMA, J.

RAVINDER DUDEJA, J. JULY 23, 2024/neha This is a digitally signed order. The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 27/03/2026 at 12:31:43

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