2019 (11) TMI 1724 - AT - Income Tax

Income deemed to accrue or arise in India - Taxability of income earned by the Assessee in respect of a contract entered into by it with ONGC Limited, a public sector enterprise (hereafter ONGC ) - existence of an Assessee s PE in India in terms of Article 5 of the DTAA - HELD THAT - It is not in dispute that in assessee s own case for the AYs 2007-08 and 2008-09 2016 (2) TMI 47 - DELHI HIGH COURT the Hon ble High Court held the issue in favour of the assessee. It could be seen from the record that the orders passed by a coordinate bench of this Tribunal for the AYs 2009-10 and 2010-11 were upheld by the Hon ble jurisdictional High Court in 2017 (2) TMI 1514 - DELHI HIGH COURT and 2019 (7) TMI 1920 - DELHI HIGH COURT respectively. The issue is no longer res integra and covered by the orders of the Hon ble High Court in assessee s own case for the AYs 2007-08 to 2010- 11. We, therefore, do not find any illegality or irregularity in the finding reached by the learned CIT(A) and consequently, find the grounds of appeal of the revenue as devoid of merits. Appeal of the revenue is accordingly dismissed. Appeal of the revenue is dismissed.

Summary

Issues:
1. Taxability of receipts from contracts in India.
2. Determination of Permanent Establishment (PE) in India.
3. Application of Double Taxation Avoidance Agreement (DTAA) between India and UAE.
4. Challenge to the CIT(A)'s decision by the Revenue.

Analysis:
1. The appeal was filed by the assessee against the order of the Commissioner of Income-tax (Appeals) for the Assessment Year 2013-14, declaring nil income due to the absence of a Permanent Establishment (PE) in India and claiming non-taxability of receipts from contracts in India.

2. The Assessing Officer (AO) held that the assessee had a fixed place PE, installation PE, and Dependent Agent PE in India, making additions to the income. The assessee argued that the taxability of receipts from contracts with ONGC was already examined by the High Court for previous years, where it was held that there was no PE in India.

3. The CIT(A) considered the material and previous court orders, concluding that the assessee did not have a PE in India during the relevant year as per the DTAA between India and UAE. The Revenue challenged this decision, contending that the Project Office and Arcadia Shipping Ltd. constituted a PE under the DTAA.

4. The Revenue's appeal was dismissed as the High Court had previously ruled in favor of the assessee for the Assessment Years 2007-08 and 2008-09, upholding decisions by the Tribunal for subsequent years. The Tribunal found no irregularity in the CIT(A)'s decision, leading to the dismissal of the Revenue's appeal.

This detailed analysis covers the taxability of receipts, determination of PE, application of DTAA, and the challenge to the CIT(A)'s decision by the Revenue, providing a comprehensive overview of the judgment.