High Court of Delhi · Judgments and reasoned final orders
Commissioner of Income Tax (International Taxation)-1, New Delhi v. Alcatel Lucent France (and connected appeals with Alcatel Lucent International)
ITA 259/2026 (CM APPL. 19472/2026), ITA 260/2026 (CM APPL. 19475/2026), ITA 261/2026 (CM APPL. 19493/2026), ITA 264/2026 (CM APPL. 19502/2026), ITA 265/2026 (CM APPL. 19503/2026) ·
Supply of software embedded in telecom hardware is not taxable as 'royalty' under section 9(1)(vi) of the Act or Article 12 of the India-France DTAA.
1. FACTS OF THE CASE
The Revenue filed five connected appeals (ITA Nos. 259/2026, 260/2026, 261/2026, 264/2026, and 265/2026) under section 260A against the common order of the ITAT dated 23.09.2021 in ITA Nos. 6611/Del/2017 (AY 2014-15), 4738/Del/2018 (AY 2010-11), 6538/Del/2019 (AY 2016-17), 4739/Del/2018 (AY 2011-12), and 7349/Del/2018 (AY 2015-16). The sole question raised by the Revenue was whether the ITAT erred in holding that payments received by Alcatel Lucent France and Alcatel Lucent International for supply of software embedded in hardware equipment were not taxable as 'royalty' under section 9(1)(vi) of the Income-tax Act, 1961 or under Article 12 of the India-France DTAA.
2. DISCUSSION BY THE COURT
When the appeals were taken up, Senior Standing Counsel for the Revenue fairly submitted that the question of law raised in the batch stood squarely covered against the Revenue by the decision of the coordinate Bench of the Delhi High Court dated 07.11.2024 in the assessee's own case (CIT (International Taxation)-1, New Delhi v. Alcatel Lucent France, ITA No. 550/2024), which in turn followed the authoritative judgment of the Supreme Court in Engineering Analysis Centre of Excellence Private Limited v. Commissioner of Income Tax & Anr., (2021) 432 ITR 471 (SC).
3. JUDICIAL DECISION
Holding that no substantial question of law arose for consideration in light of Engineering Analysis Centre of Excellence Pvt. Ltd. (432 ITR 471) and the coordinate Bench decision in ITA No. 550/2024, the Delhi High Court dismissed all five Revenue appeals along with pending applications.
4. OUTCOME
In favour of the assessee (Alcatel Lucent France / Alcatel Lucent International); all 5 Revenue appeals dismissed.
5. AKHB REVIEW POINT
AKHB analysis: Payments for software embedded in telecom hardware supplied by French non-resident entities continue to be governed by Engineering Analysis (432 ITR 471 (SC)) and are not assessable as royalty under Article 12 of the India-France DTAA.
Source and verification
Reviewed from the complete 3-page official High Court judgment PDF (DLHC010819952022_1_2026-03-27.pdf, SHA-256: 42574eb9b93a12f741420e5a8af54568d6481d9cb1af4ec980e0bbc630c42a0b).
Original PDF: 3 pages · SHA-256: 42574eb9b93a12f741420e5a8af54568d6481d9cb1af4ec980e0bbc630c42a0b
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Refers to the Income-tax Act, 1961 and allied statutory rules/circulars as applicable to the relevant assessment years.
No subsequent Supreme Court reversal or stay is recorded in the source judgment text.
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