Commissioner of Income Tax v. ZTE Corporation

5. Both these appeals have been preferred by the Revenue. The common order dated 15.02.2019 passed bytheIncome Tax Appellate TribunalinITA 817/2019 relates to the assessment year 2015-16 and ITA 911/2019 relates to the assessment year 2013-14. This Court has already considered the issues sought to be raised by the Appellant in Commissioner ofIncome Tax,International Taxation v.ZTE Corporation,2017392ITR 18(Delhi). Thereafter, we have also rejected the appeals preferred by the Revenue in ITA 763/2019, ITA 769/2019 and ITA 771/2019 vide order dated 26.08.2019. Thefollowing order came to be passed on that date: "ITA 763/2019.ITA 769/2019 &ITA 771/2019

3. At the outset, Mr. Ruchir Bhatia learned counsel for the Appellant very fairly states that the issues/questions framed in the present appeals are covered by the decision ofthis Court in Commissioner ofIncome Tax,International Taxation v. ZTE Corporation (2017)392 ITR 80(Delhi). The questions oflaw framed in the said appeal were as follows: "(7)Are the ITAT'sfindings with respect to interpretation of Article 12(3)oftheIndo-China Double Taxation Avoidance Agreement(DTAA), in the light ofExplanations 5 & 6 to Section9(1)(vi), erroneous in law.

(ii) Is the impugned order correct in its interpretation of

4. Thefindings returned bythis Courtinthe said decisionread as follows: "22. In the present case, the facts are closely similar to Ericson. The supplies made (ofthe software) enabled the use ofthe hardware sold. It was not disputed that without the software, hardware use was notpossible. The merefact that separate invoicing was donefor purchase and other transactions did not imply that it was royalty payment. In such cases, the nomenclature(oflicense or some otherfee) is indeterminate ofthe true nature. Nor is the circumstance that updates of the software are routinely given to the assessee's customers. Thesefacts do not detractfrom the nature ofthe transaction, which wassupply ofsoftware, in the nature of articles or goods. This court is also not persuaded with the submission that the payments, if not royalty, amounted to paymentsfor the use ofmachinery or equipment. Such a submission was never advanced before any ofthe lower tax authorities; moreover, even in Ericson (supra), a similar provision existed in the DTAA between India andSweden.

23. Asfar as the question ofinterestpayments and Section 234B is concerned, the court is ofthe opinion that the issue is covered by GE Packaging (supra). This question oflaw too is answered against the revenue, and infavour ofthe assessee." 5'. In the present case as well, the same DTAA is under consideration as was considered by this Court in ZTE Corporation (supra). Following the aforesaid decision, we dismiss the present appeals."

6. Following our earlier decisions, we find no fresh question oflaw arises for our consideration.

7. In view ofthe above,these appeals are dismissed.

OCTOBER 18,2019 nk VIPHS SANGHI,J SANJEEV NARUM,J