The Principal Commissioner Of Income Tax Vs M/S Oasis Centre Llc

M/S. OASIS CENTRE LLC Digitally signed REP. BY ITS DIRECTOR by LAND MARK GROUP MARIGANGAIAH WEST WING BUILDING NO.3 PREMAKUMARI OFF HAL AIRPORT MAIN ROAD Location: HIGH COURT OF YAMLUR, BANGALORE-560037 KARNATAKA PAN.AAFCT2481C.

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…RESPONDENT

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(BY SMT. TANMAYEE RAJKUMAR, ADV.)

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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

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NC: 2025:KHC:30480-DB ITA No. 199 of 2024

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HC-KAR

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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.

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THIS APPEAL, COMING ON FOR ADMISSION, THIS DAY, JUDGMENT WAS DELIVERED THEREIN AS UNDER:

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CORAM: HON'BLE MR. JUSTICE S.G.PANDIT AND HON'BLE MR. JUSTICE K. V. ARAVIND

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ORAL JUDGMENT

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(PER: HON'BLE MR. JUSTICE K.V. ARAVIND)

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This appeal by the Revenue, challenging the order

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passed by the Income-Tax Appellate Tribunal, (for short “Tribunal”) Bengaluru Bench in IT (ITA)

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No.959/BANG/2023 dated 08.02.2024 for the assessment year 2016-17.

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The brief facts are that:

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The assessee is a Foreign Company incorporated in

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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

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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”). 3. 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

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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.

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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

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Engineering Analysis Center of Excellence Private

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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.

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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

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“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.

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Perused the appeal and considered the grounds urged in the appeal and the submissions of the learned counsel for the parties.

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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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