Micro Focus Ltd, United Kingdom V. DCIT Circle- 2(2)(1), International Taxation, New Delhi

ITA 6604/DEL/2019

• Counselvise Citation: [2022] 105 COUNSELVISE.COM (IT) 1631 (ITAT-DELHI)
• Duration Of Justice: 2 year(s) 9 month(s) 12 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-05-2022
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: D
• Assessment Year: 2015-2016
• Appeal Filed On: 07-08-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ANUPAMA ANAND
• Keywords: Double taxation relief

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH ‘D’, NEW DELHI Before Dr. B. R. R. Kumar, Accountant Member Sh. Yogesh Kumar US, Judicial Member ITA No. 6604/Del/2019 : Asstt. Year : 2015-16 Micro Focus Ltd., 22-30, The Lawn, Old Bath Road, Newbury, Berkshire GB RG 141QN, United Kingdom, United Kingdom-999999 Vs DCIT, Circle-2(2)(1), International Taxation, New Delhi (APPELLANT) (RESPONDENT) PAN No. AAGCM3842B Assessee by : Ms. Sumisha Murgai, AR Revenue by : Ms. Anupama Anand, CIT DR Date of Hearing: 19.05.2022 Date of Pronouncement: 20.05.2022 ORDER Per Dr. B. R. R. Kumar, Accountant Member: The present appeal has been filed by the assessee against the order of the ld. CIT(A)-43, New Delhi dated 03.05.2019. 2. Brief facts of the case are that the assessee is a company incorporated in United Kingdom and engaged in the business of development and distribution of software products and it sells its software products in India either through distributors or directly to the customers. According to the assessee, they have no offices/project offices/godowns or any other business or presence in India and sale software products is conducted outside India, on principal to principal basis, with Indian purchasers. ITA No. 6604/Del/2019 Micro Focus Ltd. 2 3. The moot ground relates to taxation of the amount received from sale of software to Indian customers as royalty instead of business income in the absence of PE. The Co- ordinate Bench of Tribunal in the case of the assessee for A.Y. 2008-09 to A.Y. 2011-12 and A.Y. 2013-14 to A.Y. 2014-15 held that the income of the assessee is not liable to tax under the head “royalty”. 4. The Hon’ble Supreme Court while dealing the question “whether on facts and circumstances of the case and in law, the ITAT erred in holding that receipts of the assessee from sale of software is not taxable as royalty under the India-UK DTAA?” affirmed the order of the Tribunal. Since, the matter has attained finality by the order of the Hon’ble Apex Court, the appeal of the assessee is hereby allowed. Order Pronounced in the Open Court on 20/05/2022. Sd/- Sd/- (Yogesh Kumar US) (Dr. B. R. R. Kumar) Judicial Member Accountant Member Dated: 20/05/2022 *Subodh Kumar, Sr. PS* Copy forwarded to: 1. Appellant 2. Respondent 3. CIT 4. CIT(Appeals) 5. DR: ITAT ASSISTANT REGISTRAR