COMMISSIONER OF INCOME TAX INTERNATIONAL TAXATION 2 NEW DELHI vs. NETAPP BV

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ITA/407/2024HC DelhiDLHC01045768202401 August 2024Bench: HON'BLE MR. JUSTICE RAVINDER DUDEJA,HON'BLE MR. JUSTICE YASHWANT VARMA2 pages
AI SummaryDismissed

What did the High Court hold?

The High Court dismissed the appeal, affirming the ITAT's decision. The Court relied on the Supreme Court's judgment in the case of Engineering Analysis Centre of Excellence Pvt. Ltd.

What were the facts?

The Revenue appealed the ITAT's decision to delete an addition made on account of software and subscription charges being treated as royalty. The Revenue questioned whether such charges constitute royalty under the Income Tax Act.

What were the issues?

The primary issue was whether the income derived from the sale of software and subscription services should be treated as royalty under the Income Tax Act, 1961.

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(2)Show list

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$~80 * IN THE HIGH COURT OF DELHI AT NEW DELHI + ITA 407/2024 COMMISSIONER OF INCOME TAX INTERNATIONAL TAXATION 2 NEW DELHI

.....Appellant Through: Mr. Sunil Agarwal, SSC with Mr. Shivansh B Pandya, Mr. Viplav Acharya, JSCs & Mr. Utkarsh Tiwari, Advs. versus NETAPP BV .....Respondent Through: Mr. Parth, Adv. CORAM: HON'BLE MR. JUSTICE YASHWANT VARMA HON'BLE MR. JUSTICE RAVINDER DUDEJA O R D E R %

01.08.2024 CM APPL. 43646/2024 (Exemption) Allowed, subject to all just exceptions. This application stands disposed of. CM APPL. 43645/2024 (519 Days Delay) Bearing in mind the disclosures made, the delay of 519 days in filing the appeal is condoned. The application shall stand disposed of. ITA 407/2024 1. The Principal Commissioner seeks to impugn the judgment rendered by the Income Tax Appellate Tribunal [“Tribunal”] on 25 August 2022 and poses the following questions of law for our consideration. “ Whether on the facts and circumstances of the case and in law, the ITAT erred in in deleting the addition made on account of chargeability from sale of software and subscription as Royalty, by 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 03/07/2025 at 00:25:33

considering recent judgment of Hon'ble Supreme Court in the case of M/s Engineering Analysis Centre of Excellence Put. Ltd. us, CIT (2021) 432 ITR 471 (SC).” 2. We note that dealing with an identical question, ITA 43/2023 preferred by the Department came to be dismissed by a Division Bench of the Court on 23 January 2023. The view expressed by the Tribunal in that appeal came to be affirmed with the Court noticing the judgment rendered by Supreme Court in Engineering Analysis Centre of Excellence Pvt. Ltd. v. Commissioner of Income Tax [(2022) 3 SCC 321]. 3. We are further informed that the Special Leave Petition taken against the judgment rendered in ITA 43/2023 also came to be dismissed on 04 September 2023. While dismissing the said Special Leave Petition, the Supreme Court had taken note of the conceded legal position. 4. Bearing in mind, the judgment rendered in Engineering Analysis, and in view of the aforesaid, the appeal fails and shall stand dismissed. YASHWANT VARMA, J. RAVINDER DUDEJA, J. AUGUST 1, 2024/sk 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 03/07/2025 at 00:25:33

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