PR. COMMISSIONER OF INCOME TAX vs. M/S GOOGLE LLC

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ITA/657/2023HC KarnatakaKAHC01056274202311 June 2025Bench: S.G.PANDIT,T.M.NADAF5 pages
AI SummaryDismissed

What did the High Court hold?

The High Court dismissed the appeals. The Court noted that the respondent-assessee's counsel submitted that the questions raised in the appeals had been answered by the decision in the case of Deputy Commissioner of Income-Tax (International Taxation) vs. Flipkart Internet (P) Ltd. The appellant-Revenue's counsel did not dispute this fact but stated that the Revenue intended to file a Special Leave Petition (SLP) before the Apex Court. Following the decision in Flipkart Internet (P) Ltd., the High Court held that the present appeals stood dismissed. No specific findings were made on the individual questions of law, as the appeals were disposed of based on the precedent.

What were the facts?

These appeals, ITA No. 653 of 2023 and ITA No. 657 of 2023, were filed by the Principal Commissioner of Income Tax (International Taxation) and Joint Commissioner of Income Tax (OSD) against M/s. Google LLC. ITA No. 653 of 2023 pertains to assessment year 2012-2013 and arises from an order dated February 20, 2023, passed by the Income Tax Appellate Tribunal (ITAT) in IT(IT)A No. 688/Bang/2022. ITA No. 657 of 2023 relates to assessment year 2010-2011 and arises from an ITAT order dated February 20, 2023, in IT(IT)A No. 167/Bang/2021. The appeals are filed under Section 260-A of the Income Tax Act, 1961, challenging the ITAT's decisions.

What were the issues?

The High Court was asked to decide six substantial questions of law, all framed as whether the ITAT's order was perverse. The core issues revolve around the classification of services rendered by Google LLC. 1. Whether the ITAT erred in concluding that services do not qualify as Fees for Technical Services (FTS) once the 'make available' clause is satisfied, despite agreements showing India personnel were trained by the assessee. 2. Whether the ITAT wrongly failed to appreciate that the services rendered were in the nature of FTS. 3. (Identical to issue 2). 4. Whether the ITAT wrongly concluded that the services rendered did not fulfill the 'make available' criteria mandated in the Double Taxation Avoidance Agreement (DTAA). 5. Whether the ITAT erred in holding that the receipts for services were not FTS under Section 9(1)(vii) of the Act and Article 12 of the India-USA DTAA. 6. Whether the ITAT was unjustified in deciding the issue based on the Flipkart Internet P. Ltd. case, which had not reached finality. The Revenue argued that the ITAT's findings were perverse. The Assessee contended that the questions raised were answered by a prior decision in the case of Deputy Commissioner of Income-Tax (International Taxation) vs. Flipkart Internet (P) Ltd.

Which sections of the Income-tax Act were involved?

Section 260-A,Section 9(1)(vii)

AI-generated summary — verify with the full judgment below

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HC-KAR NC: 2025:KHC:19895-DB ITA No. 653 of 2023 C/W ITA No. 657 of 2023

IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 11TH DAY OF JUNE, 2025 PRESENT THE HON'BLE MR. JUSTICE S.G.PANDIT AND THE HON'BLE MR JUSTICE T.M.NADAF INCOME TAX APPEAL NO. 653 OF 2023 C/W INCOME TAX APPEAL NO. 657 OF 2023

BETWEEN: 1. PR. COMMISSIONER OF INCOME TAX INTERNATIONAL TAXATION BMTC COMPLEX, KORAMANGALA, BANGALORE.

2.

JOINT COMMISSIONER OF INCOME TAX (OSD) INTERNATIONAL TAXATION, CIRCLE 1(1)DCIT(IT) BANGALORE. …APPELLANTS (COMMON IN BOTH APPEALS)

(BY SRI. SANMATHI E.I., ADV. AND SRI M DILIP, ADV.)

AND: M/S. GOOGLE LLC (FORMERLY GOOGLE INC.) 1600, AMPHITHEATRE PARKWAY MOUNTAIN VIEW

CA US 94043 PAN:AADCG7673B …RESPONDENT (COMMON IN BOTH APPEALS)

(BY SRI. ANMOL ANAND, ADV. FOR SRI ANIND THOMAS, ADV.)

Digitally signed by MARIGANGAIAH PREMAKUMARI Location: HIGH COURT OF KARNATAKA

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HC-KAR NC: 2025:KHC:19895-DB ITA No. 653 of 2023 C/W ITA No. 657 of 2023

ITA NO.653/2023 IS FILED UNDER SEC.260-A OF INCOME TAX ACT 1961, ARISING OUT OF ORDER DATED 20/02/2023 PASSED IN IT(IT)A NO. 688/BANG/2022, FOR THE ASSESSMENT YEAR 2012- 2013 PRAYING TO 1). DECIDE THE FOREGOING QUESTION OF LAW AND/OR SUCH OTHER QUESTIONS OF LAW AS MAY BE FORMULATED BY THE COURT AS DEEMED FIT AND ETC.

ITA NO.657/2023 IS FILED UNDER SEC.260-A OF INCOME TAX ACT 1961, ARISING OUT OF ORDER DATED 20/02/2023 PASSED IN IT(IT)A NO. 167/BANG/2021, FOR THE ASSESSMENT YEAR 2010- 2011 PRAYING TO 1). DECIDE THE FOREGOING QUESTION OF LAW AND/OR SUCH OTHER QUESTIONS OF LAW AS MAY BE FORMULATED BY THE COURT AS DEEMED FIT AND ETC.

THESE APPEALS, COMING ON FOR ADMISSION, THIS DAY, JUDGMENT WAS DELIVERED THEREIN AS UNDER:

CORAM: HON'BLE MR. JUSTICE S.G.PANDIT AND HON'BLE MR JUSTICE T.M.NADAF

ORAL JUDGMENT (PER: HON'BLE MR. JUSTICE S.G.PANDIT)

Heard learned counsel Sri.E.I.Sanmathi for appellants/Revenue and learned counsel Sri.Anmol Anand for Sri.Anind Thomas, learned counsel for respondent. Perused the entire appeal papers.

2.

The above appeals filed under Section 260-A of the Income Tax Act, 1961 is directed against order passed by the Income Tax Appellate Tribunal, Bengaluru ‘C’ Bench, Bengaluru (for short, ‘Tribunal’) in

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HC-KAR NC: 2025:KHC:19895-DB ITA No. 653 of 2023 C/W ITA No. 657 of 2023

IT(IT)A.No.688/Bang/2022 for the assessment year 2012- 13 and in IT(IT)A.No.167/Bang/2021 for the assessment year 2010-11 respectively (Annexure-A), raising the following substantial questions of law in both the appeals:

“1. Whether on the facts and in the circumstances of the case, the Tribunal’s order is perverse in nature in concluding that once the “make available” clause involving provision of technical knowledge and technical services is satisfied then the services rendered do not qualify as FIS ignoring the terms and clauses of the agreement which establish that India personnel are trained by the assessee and thus satisfying the “make available” clause?

2.

Whether on the facts and in the circumstances of the case, the Tribunal’s order is perverse in not appreciating that the services rendered are in the nature of Fees for Technical Services?

3.

Whether on the facts and in the circumstances of the case, the Tribunal’s order is perverse in nature in not appreciating that

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HC-KAR NC: 2025:KHC:19895-DB ITA No. 653 of 2023 C/W ITA No. 657 of 2023

the services rendered are in the nature of Fees for Technical Services?

4.

Whether on the facts and in the circumstances of the case, the Tribunal’s order is perverse in concluding that the services rendered do not fulfill the criteria of ‘make available’ as mandated in DTAA?

5.

Whether on the facts and in the circumstances of the case, the Tribunal’s order is perverse in holding that the receipts for services by the assessee is not FTS within the meaning of the provisions of Section 9(1)(vii) of the Act and Article 12 of India-USA DTAA?

6.

Whether on the facts and in the circumstances of the case, the Tribunal’s order is perverse in not justified in deciding the issue on the basis of decision in case of Flipkart Internet P. Ltd., when the said decision has not reached finality?”

3.

Learned counsel appearing for the respondent would submit that the questions raised in the above appeals are answered in a decision reported in the case of DEPUTY

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HC-KAR NC: 2025:KHC:19895-DB ITA No. 653 of 2023 C/W ITA No. 657 of 2023

COMMISSIONER OF INCOME-TAX (INTERNATIONAL TAXATION) VS. FLIPKART INTERNET (P) LTD.1

4.

Learned counsel Sri.E.I.Sanmathi appearing for the appellants/Revenue would not dispute the said fact, but he submits that against the said issue, Revenue is intending to file SLP before the Hon’ble Apex Court.

5.

In view of the fact that questions raised in the above appeals are answered in FLIPKART INTERNET (P) LTD., (supra), following the said decision, the present appeals stand dismissed.

Sd/- (S.G.PANDIT) JUDGE

Sd/- (T.M.NADAF) JUDGE

NC CT:bms List No.: 1 Sl No.: 15

1 (2025) 171 TAXMANN.COM 693 (KARNATAKA)

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