MOL CORPORATION vs. ADDITIONAL DIRECTOR OF INCOME TAX

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ITA/212/2017HC DelhiDLHC01037601201713 May 2022Bench: HON'BLE MR. JUSTICE MANMOHAN,HON'BLE MR. JUSTICE DINESH KUMAR SHARMA3 pages
AI SummaryWithdrawn

What did the High Court hold?

The High Court held that the appeals had become infructuous. This was because, subsequent to the admission of the appeals and framing of the question of law, the Income Tax Appellate Tribunal (ITAT) had passed orders in the remand proceedings. The ITAT decided the issue of royalty on shrink-wrapped computer software in favor of MOL Corporation on February 14, 2022, and in favor of M/S Microsoft Regional Sales Pte. Ltd. (MRSC) on April 13, 2022. Consequently, the High Court disposed of the present appeals as infructuous, without delving into the merits of the framed question of law. No issue was expressly left undecided; the appeals were rendered moot by subsequent events.

What were the facts?

The appeals were filed by MOL Corporation and M/S Microsoft Regional Sales Pte. Ltd. (MRSC) against orders passed by various income tax authorities. The High Court of Delhi had admitted these appeals on March 10, 2017, and framed a specific question of law concerning the royalty on shrink-wrapped computer software, relying on the case of Director of Income Tax Vs. Infrasoft Ltd. Subsequently, the Assessing Officer, Dispute Resolution Panel (DRP), and the Income Tax Appellate Tribunal (ITAT) passed orders in the remand proceedings. Notably, the ITAT decided the issue of royalty in favor of MOL Corporation on February 14, 2022, and in favor of MRSC on April 13, 2022. Due to these subsequent decisions by the ITAT, the High Court considered the present appeals to be infructuous.

What were the issues?

1. 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? (Question of law). The Assessee (MOL Corporation and MRSC) contended that the remand on the issue of royalty on shrink-wrapped computer software was justified based on the precedent set in Director of Income Tax Vs. Infrasoft Ltd. The Revenue contended that the remand was justified. The judgment does not explicitly detail the arguments of each side beyond the framing of the question of law and the reliance on the cited case.

AI-generated summary — verify with the full judgment below

$~21 to 25 * IN THE HIGH COURT OF DELHI AT NEW DELHI + ITA 204/2017 MOL CORPORATION ..... Appellant Through: Mr.Nageswar Rao, Advocate with Ms.Deepika Agarwal and Mr.Akshay Uppal, Advocates. versus ADDITIONAL DIRECTOR OF INCOME TAX ..... Respondent Through: Mr.Kunal Sharma, Sr.Standing Counsel with Ms.Zehra Khan, Jr.Standing Counsel and Mr.Shray Nargotra, Advocate. 22 + ITA 205/2017 MOL CORPORATION ..... Appellant Through: Mr.Nageswar Rao, Advocate with Ms.Deepika Agarwal and Mr.Akshay Uppal, Advocates. versus ADDITIONAL DIRECTOR OF INCOME TAX ..... Respondent Through: Mr.Kunal Sharma, Sr.Standing Counsel with Ms.Zehra Khan, Jr.Standing Counsel and Mr.Shray Nargotra, Advocate. 23 + ITA 206/2017 M/S MICROSOFT REGIONAL SALES PTE. LTD. ..... Appellant Through: Mr.Nageswar Rao, Advocate with Ms.Deepika Agarwal and Mr.Akshay Uppal, Advocates. 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 15/06/2026 at 01:24:11

versus DEPUTY COMMISSIONER OF INCOME TAX ..... Respondent Through: Mr.Kunal Sharma, Sr.Standing Counsel with Ms.Zehra Khan, Jr.Standing Counsel and Mr.Shray Nargotra, Advocate. 24 + ITA 212/2017 MOL CORPORATION ..... Appellant Through: Mr.Nageswar Rao, Advocate with Ms.Deepika Agarwal and Mr.Akshay Uppal, Advocates. versus ADDITIONAL DIRECTOR OF INCOME TAX ..... Respondent Through: Mr.Kunal Sharma, Sr.Standing Counsel with Ms.Zehra Khan, Jr.Standing Counsel and Mr.Shray Nargotra, Advocate. 25 + ITA 213/2017 MOL CORPORATION ..... Appellant Through: Mr.Nageswar Rao, Advocate with Ms.Deepika Agarwal and Mr.Akshay Uppal, Advocates. Versus DEPUTY DIRECTOR OF INCOME TAX ..... Respondent Through: Mr.Kunal Sharma, Sr.Standing Counsel with Ms.Zehra Khan, Jr.Standing Counsel and Mr.Shray Nargotra, Advocate. 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 15/06/2026 at 01:24:11

CORAM: HON'BLE MR. JUSTICE MANMOHAN HON'BLE MR. JUSTICE DINESH KUMAR SHARMA O R D E R % 13.05.2022 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?” 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 or royalty in favour of MOL Corporation on 14th February, 2022 and M/S Microsoft Regional Sales Pte. Ltd.(MRSC) on 13th April, 2022 respectively. In view of the subsequent orders passed by the ITAT, the present appeals are disposed of as infructuous. MANMOHAN, J DINESH KUMAR SHARMA, J MAY 13, 2022 TS 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 15/06/2026 at 01:24:11

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