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HC-KAR NC: 2025:KHC:30480-DB ITA No. 199 of 2024
IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 6TH DAY OF AUGUST, 2025 PRESENT THE HON'BLE MR. JUSTICE S.G.PANDIT AND THE HON'BLE MR. JUSTICE K. V. ARAVIND INCOME TAX APPEAL NO. 199 OF 2024 BETWEEN:
THE PRINCIPAL COMMISSIONER OF INCOME TAX INTERNATIONAL TAXATION, BANGALORE.
DEPUTY COMMISSIONER OF INCOME TAX (INTERNATIONAL TAXATION). …APPELLANTS (BY SRI. SANMATHI E. I., SENIOR STANDING COUNSEL)
AND:
M/S. OASIS CENTRE LLC REP. BY ITS DIRECTOR LAND MARK GROUP WEST WING BUILDING NO.3 OFF HAL AIRPORT MAIN ROAD YAMLUR, BANGALORE-560037 PAN.AAFCT2481C. …RESPONDENT (BY SMT. TANMAYEE RAJKUMAR, ADV.)
THIS INCOME TAX APPEAL UNDER SEC. 260 A OF INCOME TAX ACT 1961, ARISING OUT OF ORDER DATED 08.02.2024 PASSED IN ITA NO.959/BANG/2023 FOR THE ASSESSMENT YEAR 2016-17, 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 SET ASIDE THE APPELLATE ORDER
Digitally signed by MARIGANGAIAH PREMAKUMARI Location: HIGH COURT OF KARNATAKA
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HC-KAR NC: 2025:KHC:30480-DB ITA No. 199 of 2024
DATED 08/02/2024 PASSED BY THE INCOME TAX APPELLATE TRIBUNAL, ‘C’ BENCH, BANGALORE, AS SOUGHT FOR, IN THE RESPONDENT- ASSESSEE’S CASE, IN APPEAL PROCEEDINGS IN IT (IT) A NO.959/BANG/2023 FOR A.Y.2016-17 ANNEXURE-A AND GRANT SUCH OTHER RELIEF AS DEEMED FIT, IN THE INTEREST OF JUSTICE.
THIS APPEAL, 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 K. V. ARAVIND
ORAL JUDGMENT (PER: HON'BLE MR. JUSTICE K.V. ARAVIND)
This appeal by the Revenue, challenging the order passed by the Income-Tax Appellate Tribunal, (for short “Tribunal”) Bengaluru Bench in IT (ITA) No.959/BANG/2023 dated 08.02.2024 for the assessment year 2016-17.
The brief facts are that:
The assessee is a Foreign Company incorporated in United Arab Emirates (UAE) engaged in the business of operating, managing, leasing, running shopping malls and shopping centers. The assessee was in receipt of Rs.13.26
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HC-KAR NC: 2025:KHC:30480-DB ITA No. 199 of 2024
crorers of Oracle licence fee from 3 of its group entities for the assessment year 2016-17. The assessee filed return of income declaring ‘NIL’ income. The Assessing Officer held that the assessee is the owner of software licence and treated the payment received as “royalty” under Section 9(1)(vi) of the Income Tax Act, 1961 (for short “the Act”).
On further appeal by the assessee, the Commissioner of Income Tax (Appeals) allowed the appeal. The Assessing Officer, aggrieved by the order of the Commissioner of Income Tax (Appeals) preferred an appeal before the Tribunal. The Tribunal, under the impugned order considering the law laid down by the Hon'ble Apex Court in the case of ENGINEERING ANALYSIS CENTRE OF EXCELLENCE PRIVATE LIMITED v/s CIT AND ANOTHER reported in (2021) 432 ITR 472 (SC) remanded the matter for examination of taxability of software fees under the Double Taxation Avoidance Agreement (‘DTAA’ for short) entered between
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HC-KAR NC: 2025:KHC:30480-DB ITA No. 199 of 2024
India and UAE. The revenue aggrieved by the order of remand, by raising substantial questions of law as referred in the appeal memorandum is before this Court in this appeal.
Sri.E.I.Sanmathi, learned Senior Standing Counsel appearing for the appellant-revenue submits that the judgment of the Hon’ble Supreme Court in the case of Engineering Analysis Center of Excellence Private Limited (supra) is not applicable to the facts of the present case as the entire receipt was taxable under the head “royalty” under Section 9(1)(vi) of the Act. He further submits that the order of remand was unnecessary.
On the other hand, Smt.Tanmayee Rajkumar, learned counsel appearing for the respondent-assessee submits that the Assessing Officer, in compliance of the order of remand has passed the order giving effect on 31.05.2024, holding the receipt of Rs.13.26 crores as
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HC-KAR NC: 2025:KHC:30480-DB ITA No. 199 of 2024
“royalty” under Section 9(1)(vi) of the Act. It is her submission that in view of order giving effect, challenge to the order of remand would no longer survive for consideration.
Perused the appeal and considered the grounds urged in the appeal and the submissions of the learned counsel for the parties.
The revenue is in appeal against the order of remand wherein the Tribunal directed the Assessing Officer to examine the taxability of software fee under DTAA agreement entered between India and UAE. The Assessing Officer during the pendency of this appeal, re-examined the issue and while passing the order giving effect has held that the receipt of Rs.13.26 crores is “royalty” in terms of Section 9(1)(vi) of the Act. In view of the order of Assessing Officer passing order giving effect to the order of remand, challenge to the order of remand passed by the Tribunal would not survive for
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HC-KAR NC: 2025:KHC:30480-DB ITA No. 199 of 2024
further consideration. However, the contentions of both the parties are to be kept open.
Accordingly, the appeal is disposed of. The questions raised in the appeal are not answered.
Sd/- (S.G.PANDIT) JUDGE
Sd/- (K. V. ARAVIND) JUDGE
MPK CT:bms List No.: 1 Sl No.: 27