COMMISSIONER OF INCOME TAX (INTERNATIONAL TAXATION)-2 vs. M/S MOL CORPORATION

PDF · subscribers
ITA - 100 / 2023HC Delhi16 February 20233 pages
For Petitioner: SANJAY KUMAR
AI SummaryDismissed

What did the High Court hold?

The High Court closed the appeal, finding no substantial question of law arose for consideration. This was based on the understanding that the issues were covered by a Supreme Court decision, subject to the outcome of a pending review petition.

What were the facts?

The Revenue appealed against an ITAT order that held income from software licensing and cloud services was not taxable as royalty. The High Court was informed that the proposed questions of law were covered by a Supreme Court judgment.

What were the issues?

Whether income from software licensing and cloud services constitutes royalty taxable in India under the Income Tax Act and DTAA, considering the nature of software as a copyrighted article.

Which sections of the Income-tax Act were involved?

Section 9(1)(vi)

AI-generated summary — verify with the full judgment below

Cases cited in this judgment(1)Show list

Detected automatically from the text. Citations are also linked where they appear in the judgment. The count shows how many other judgments on BharatTax rely on the same authority.

$~31 * IN THE HIGH COURT OF DELHI AT NEW DELHI + ITA 100/2023 COMMISSIONER OF INCOME TAX (INTERNATIONAL TAXATION)-2

..... Appellant Through: Mr Sanjay Kumar, Sr. Standing Counsel.

versus

MOL CORPORATION

..... Respondent

Through: Mr Akshay Uppal, Advocate.

CORAM:

HON'BLE MR JUSTICE RAJIV SHAKDHER

HON'BLE MS JUSTICE TARA VITASTA GANJU

O R D E R %

16.02.2023

[Physical Hearing/Hybrid Hearing (as per request)] CM APPL. 7384/2023 [Application filed on behalf of the appellant seeking condonation of delay of 100 days in re-filing the appeal] 1. This is an application filed on behalf of the appellant/revenue seeking condonation of delay in re-filling the appeal. 2. According to the appellant/revenue, there is delay of 100 days. 3. Counsel for the respondent/assessee, says that he has no objection if the delay in re-filing the appeal is condoned. 4. Accordingly, the delay in re-filling the appeal is condoned. 5. The application is disposed of, in the aforesaid terms. ITA 100/2023 6. This appeal concerns Assessment Year (AY) 2012-13.

ITA 100/2023

page 1 of 3

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 12:43:43

7.

This appeal assails the order of the Income Tax Appellate Tribunal [in short, “Tribunal”] dated 13.04.2022 passed in ITA 1554/Del/2016. 8. The following questions of law are proposed by the appellant/revenue:

“A. Whether the Ld. ITAT erred in holding that licensing of the software products of Microsoft in the territory of India by Mol Corporation is not taxable in India as Royalty under Section 9(1)(vi) of the Income Tax Act, 1961 read with Article 12 of the Indo-USA DTAA?

B. Whether the Ld. ITAT erred in holding that licensing of computer is copyrighted article and not copyright and accordingly the sale of software is in nature of business income and not taxable as royalty under Section 9(1)(vi) of Income Tax Act, 1961 and absence of PE in India, it is not taxable under Article 7 of India-USA DTAA?

C. Whether the Ld. ITAT erred in holding that the subscription received towards Cloud Services is not taxable as Royalty income under the provisions of Income Tax Act, 1961?”

9.

As would be evident the first two questions of law [i.e., A and B] relate to income earned from licensing/sale of software while the third question [i.e., C] relates to subscription receipts against cloud services offered by the respondent/assessee. 10. The Tribunal has ruled that neither income earned from licensing/sale of software products nor subscription fee earned for providing cloud services, could be construed as royalty. 11. Mr Sanjay Kumar, senior standing counsel, who appears on behalf of the appellant/revenue, says that the proposed questions are covered by the judgment of the Supreme Court rendered in Engineering Analysis Centre of Excellence (P.) Ltd. v. CIT 432 ITR 471 (SC). ITA 100/2023

page 2 of 3 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 12:43:43

11.1. We are also informed by Mr Kumar that a review petition has been filed which is pending consideration. 12. Accordingly, the appeal is closed as no substantial question of law arises for our consideration albeit, with the caveat that in case the appellant/revenue were to succeed in the review petition, parties will abide by the decision rendered therein.

RAJIV SHAKDHER, J

TARA VITASTA GANJU, J

FEBRUARY 16, 2023/ tr

Click here to check corrigendum, if any

ITA 100/2023

page 3 of 3

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 12:43:43

More judgments on Section 9(1)(vi)

All 1,705 judgments and leading authorities on Section 9(1)(vi) →

Recent GST High Court judgments

Search GST case law →