SAIC MOTOR OVERSEAS INTELLIGENT MOBILITY TECHNOLOGY CO . LTD.,SHANGHAI vs. ASSISTANT COMMISSIONER OF INCOME TAX, INTERNATIONAL TAXATION, HSIIDC BUILDING

ITA 2194/DEL/2023Status: DisposedITAT Delhi23 February 2024AY 2020-21Bench: SHRI SHAMIM YAHYA (Accountant Member), MS. ASTHA CHANDRA (Judicial Member)16 pages
AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that the payments were for the supply of standardized software, not for the use of copyright or imparting industrial/commercial/scientific experience. Therefore, the income was business income and not royalty, thus not taxable in India.

What were the facts?

The assessee, a Chinese company, received payments for software licenses incorporated into cars manufactured by MG Motor India. The Assessing Officer treated these payments as royalty income taxable in India, while the assessee contended it was business income not taxable due to the absence of a Permanent Establishment.

What were the issues?

Whether payments for software licenses constitute royalty income under the India-China DTAA, and whether interest under sections 234A and 234B was leviable.

Which sections of the Income-tax Act were involved?

Section 143(3),Section 144C(13),Section 9(1)(vi),Section 115A,Section 234A,Section 234B,Section 270A

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Income Tax Appellate Tribunal, DELHI BENCH “D”: NEW DELHI

Before: SHRI SHAMIM YAHYA & MS. ASTHA CHANDRA

For Appellant: Shri Ajay Vohra, Sr. Advocate, Shri Neeraj Jain, Advocate, Ms. Shaily Gupta &
For Respondent: Shri Vizay B. Vasanta, CIT-DR
Hearing: 20/12/2023

PER ASTHA CHANDRA, JM

The appeal filed by the assessee is directed against the final assessment order dated 22.06.2023 passed under section 143(3) r.w.s. 144C(13) of the Income Tax Act, 1961 (the “Act”) in pursuance to the directions of Ld. Dispute Resolution Panel (“DRP”) pertaining to the Assessment Year (“AY”) 2020-21. 2

2.

The assessee has raised the following grounds of appeal:-

“1. That the assessing officer erred on facts and in law in completing assessment under section 143(3) read with section 144C(13) of the Income-tax Act, 1961 ('the Act') at an income of Rs. 18,79,80,556 as against the return

The order continues below.

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