THE COMMISSIONER OF INCOME TAX - INTERNATIONAL TAXATION -3 vs. SIEMENS INDUSTRY SOFTWARE LTD. (FORMERLY KNOWN AS MENTOR GRAPHICS (IRELAND) LTD.

PDF · subscribers
ITA - 485 / 2023HC Delhi25 August 20232 pages
For Petitioner: RUCHIR BHATIA
AI SummaryDismissed

What did the High Court hold?

The High Court agreed that the transaction involved the sale of copyright material (software) and not the transfer of copyright. The issue was covered by the Supreme Court's judgment in Engineering Analysis Centre of Excellence Pvt. Ltd. v. CIT.

What were the facts?

The assessee treated income from software sales as business income, not royalty, as there was no Permanent Establishment in India. The Tribunal ruled in favor of the assessee, relying on previous decisions.

What were the issues?

Whether the sale of software constitutes royalty under the India-Ireland Double Tax Avoidance Agreement. Whether the transaction was a sale of copyright material or a transfer of copyright.

Which sections of the Income-tax Act were involved?

Article 12, Article 7

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.

$~39 * IN THE HIGH COURT OF DELHI AT NEW DELHI + ITA 485/2023 THE COMMISSIONER OF INCOME TAX - INTERNATIONAL TAXATION -3

..... Appellant Through: Mr Ruchir Bhatia, Sr. Standing Counsel with Ms Priya Sarkar, Standing Counsel.

versus

SIEMENS INDUSTRY SOFTWARE LTD. (FORMERLY KNOWN AS MENTOR GRAPHICS (IRELAND) LTD. ..... Respondent

Through: Mr Mayank Nagi, Advocate.

CORAM:

HON'BLE MR JUSTICE RAJIV SHAKDHER

HON'BLE MR JUSTICE GIRISH KATHPALIA

O R D E R %

25.08.2023 [Physical Hearing/Hybrid Hearing (as per request)] 1. This Appeal concerns Assessment Year (AY) 2015-16. 2. Via this appeal, the appellant/revenue seeks to assail the order dated 26.12.2022 passed by the Income Tax Appellate Tribunal [in short, “Tribunal”]. 3. The sole issue which arises for consideration in this appeal is : whether the sale of software can be construed as royalty, in terms of Article 12 of the India-Ireland Double Tax Avoidance Agreement [in short, “DTAA”] ? 4. The respondent/assessee had shown the income earned from sale of software amounting to Rs.18,16,14,910/- as business income. Since there ITA 485/2023

page 1 of 2 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 13:33:10

was no Permanent Establishment [in short, “PE] in India, respondent/assessee took recourse to Article 7 of the aforementioned DTAA. 5. The Tribunal has ruled in favour of the respondent/assessee, relying upon the decision rendered by it in the respondent/assessee’s case, concerning AY 2013-14 and AY 2014-15. 6. In our opinion, this is, clearly, a case involving sale of copyright material i.e., software and not transfer of copyright. 7. Mr Ruchir Bhatia, learned senior standing counsel, who appears on behalf of the appellant/revenue, cannot but accept that this issue is covered against the revenue by the judgment of the Supreme Court, rendered in Engineering Analysis Centre of Excellence Pvt. Ltd. v. CIT, [2021] 432 ITR 471. 8. Given the aforesaid circumstances, according to us, no substantial question of law arises for our consideration. 9. The appeal is, accordingly, closed.

RAJIV SHAKDHER, J

GIRISH KATHPALIA, J

AUGUST 25, 2023 / tr

Click here to check corrigendum, if any

ITA 485/2023

page 2 of 2 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 13:33:10

Recent GST High Court judgments

Search GST case law →