THE COMMISSIONER OF INCOME TAX - INTERNATIONAL TAXATION-2 vs. NORTEL NETWORK INDIA INTERNATIONAL INC.

$~49, 53 and 57 * IN THE HIGH COURT OF DELHI AT NEW DELHI + ITA 322/2018, C.M. APPL.10805/2018 + ITA 326/2018 + ITA 330/2018, C.M. APPL.10809/2018 THE COMMISSIONER OF INCOME TAX - INTERNATIONAL TAXATION-2

..... Appellant

versus NORTEL NETWORK INDIA INTERNATIONAL INC...... Respondent Through : Sh. Ruchir Bhatia, Sr. Standing Counsel, for Revenue. Sh. Deepak Chopra and Ms. Manasvini Bajpai, Advocates, for Respondents in Item Nos 49, 53 and 57.

CORAM: HON'BLE MR. JUSTICE S. RAVINDRA BHAT HON'BLE MR. JUSTICE A. K. CHAWLA

O R D E R %

20.03.2018 Three questions of law are urged in these sets of appeals under Section 260A of the Income Tax Act, 1961 [hereafter “the 1961 Act”]. First, with respect to the existence of Permanent Establishment (PE) of the respondent in India; second with respect to the Revenue’s claim that notwithstanding question no.1, the assessee was not covered by the Double Taxation Avoidance Agreement (DTAA) in question (Indo-US DTAA) as it was not entitled to claim the benefits under DTAA, and lastly, Section 234B of the 1961 Act applied to the facts of the case. All these issues concededly are covered in the order of this Court for Assessment Years 2003-04, 2004-05 and 2005-06 and other years [Nortel Networks India International Inc. v. DIT 386 ITR 353 (Del)]. Page 1 of 2

The additional question that is sought to be urged by the Revenue in ITA 326/2018 is that the outgoings towards embedded softwares constitute royalty under Section 9(1)(vi) of the 1961 Act. This question too has been decided by the Division Bench of this Court in CIT v. ZTE Corporation 392 ITR 80 (Del). No substantial question of law arises on this aspect too. In view of this, it is held that no substantial question of law arises in these appeals; the appeals are accordingly dismissed.

S. RAVINDRA BHAT, J

A. K. CHAWLA, J MARCH 20, 2018/ajk

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