M/S MOL CORPORATION vs. ASSISTANT COMMISSIONER OF INCOME TAX

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ITA/432/2019HC DelhiDLHC01020545201919 May 20222 pages
AI SummaryWithdrawn

What did the High Court hold?

The High Court noted that on March 10, 2017, it had admitted the appeals and framed a specific question of law regarding the justification of remand on the royalty issue for shrink-wrapped software, referencing the Infrasoft Ltd. case. Subsequently, the Assessing Officer, Dispute Resolution Panel (DRP), and the ITAT had dealt with the matter. Crucially, the ITAT, in its remand proceedings, decided the issue of royalty in favour of MOL Corporation on February 14, 2022, and M/S Microsoft Regional Sales Pte. Ltd. (MRSC) on April 13, 2022. In light of these subsequent favourable decisions by the ITAT, the High Court considered the present appeals to be infructuous.

What were the facts?

The appeals before the Delhi High Court concerned the assessment years not explicitly stated in the provided text. The appellant in ITA 203/2017 is Microsoft Regional Sales Corporation, USA, and in ITA 432/2019 is M/S MOL Corporation. The respondent in both cases is the Income Tax Department. The appeals challenged orders that led to a remand on the question of royalty payments for shrink-wrapped computer software. Subsequently, the Income Tax Appellate Tribunal (ITAT) passed orders in the remand proceedings. The ITAT decided the issue of royalty in favour of MOL Corporation on February 14, 2022, and in favour of M/S Microsoft Regional Sales Pte. Ltd. (MRSC) on April 13, 2022.

What were the issues?

1. Whether, in the circumstances of the case and relying on the decision in Director of Income Tax Vs. Infrasoft Ltd. [2014] 264 CTR 329, the remand on the question of royalty on shrink-wrapped computer software was justified? Assessee's Contention: The judgment does not record any specific arguments made by the assessee. Revenue's Contention: The judgment does not record any specific arguments made by the revenue. The core of the issue revolves around whether payments for shrink-wrapped software constitute royalty, which was the subject of the remand.

Which sections of the Income-tax Act were involved?

None explicitly mentioned in the provided text, other than the reference to a case that likely interprets specific sections.

AI-generated summary — verify with the full judgment below

ITA 203/2017 & ITA 432/2019 Page 1 of 2 $~19 & 21 * IN THE HIGH COURT OF DELHI AT NEW DELHI + ITA 203/2017 & CM APPL.18989/2022 MICROSOFT REGIONAL SALES CORPORATION, USA ..... Appellant Through: Mr. Nageswar Rao and Ms. Deepika Agarwal, Advocates. Versus DEPUTY DIRECTOR OF INCOME TAX ..... Respondent Through: Mr. Kunal Sharma, Advocate. 21 + ITA 432/2019 & CM APPL.20132/2019 M/S MOL CORPORATION ..... Appellant Through: Mr. Nageswar Rao and Ms. Deepika Agarwal, Advocates. Versus ASSISTANT COMMISSIONER OF INCOME TAX ..... Respondent Through: Mr. Ruchir Bhatia and Ms. Mansie Jain, Advocates. % Date of Decision: 19th May, 2022 CORAM: HON’BLE MR. JUSTICE MANMOHAN HON’BLE MS. JUSTICE MANMEET PRITAM SINGH ARORA This is a digitally signed Judgement. NEUTRAL CITATION NO: 2022/DHC/001961

ITA 203/2017 & ITA 432/2019 Page 2 of 2 J U D G M E N T MANMOHAN, J (Oral): 1. On 10th March, 2017, this Court had admitted the present batch of matters and framed the following question of law: “Whether in the circumstances of the case and placing reliance on the case of Director of Income Tax Vs. Infrasoft Ltd. [2014] 264 CTR 329, the remand on the question of royalty on shrink wrapped computer software was justified?” 2. Subsequently, in pursuance to the impugned remand orders, the Assessing Officer, Dispute Resolution Panel (DRP) as well as ITAT have decided the matter. In fact, the Income Tax Appellate Tribunal (‘ITAT’), in remand proceedings has decided the issue of royalty in favour of MOL Corporation on 14th February, 2022 and M/S Microsoft Regional Sales Pte. Ltd.(MRSC) on 13th April, 2022 respectively. 3. In view of the subsequent orders passed by the ITAT, the present appeals are disposed of as infructuous. MANMOHAN, J MANMEET PRITAM SINGH ARORA, J MAY 19, 2022 AS This is a digitally signed Judgement. NEUTRAL CITATION NO: 2022/DHC/001961

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