2021 (9) TMI 1285 - HC - Income Tax

Income accrued in India - PE in India - Whether assessee has a business connection in India under Section 9(1)(i) of the Income Tax Act, 1961 and has a PE, in the form of M/s L.G. Electronics India Ltd. under Article 5(1) 5(2) of DTAA between India and Korea? - HELD THAT - As LG Electronics India Limited 2020 (11) TMI 209 - ITAT DELHI covers the case of the present Respondent-assessees for the assessment years under consideration wherein the CIT(A) in the 201 proceedings held that none of the AEs, apart from LG Korea, had PE in India.

Summary

Issues:
Challenging order of ITAT, Quashing of assessment proceedings, Income attribution to PE in India, Setting aside re-opening of assessment under Section 147.

Challenging order of ITAT:
The appeals were filed challenging the ITAT order where the appeals of the appellant-Revenue were dismissed, and cross objections of the respondent-assessee were allowed. The questions of law proposed by the appellant-revenue were related to the business connection in India under Section 9(1)(i) of the Income Tax Act, 1961, presence of PE in India, and the re-opening of assessment under Section 147. The counsel for the appellant submitted that the issues in these appeals were similar to other cases previously heard by the court, which were dismissed for similar reasons.

Quashing of assessment proceedings:
The appellant raised concerns about the ITAT quashing the assessment proceedings without considering the business connection in India and the existence of a PE. The appellant contended that the ITAT erred in law by setting aside the re-opening of assessment under Section 147. However, the court noted that the CIT(A) had previously held that none of the AEs, except LG Korea, had a PE in India for the assessment years under consideration. As the same issue was present in the current proceedings, the court found no substantial question of law and dismissed the appeals for lacking merit.

Income attribution to PE in India:
One of the key issues raised was whether any income was attributable to the assessee's PE in India. The appellant argued that the ITAT erred in holding that no income was attributable to the PE in India. However, the court considered the CIT(A)'s decision regarding the presence of PE in India for other AEs and concluded that no substantial question of law arose in the present appeals, leading to their dismissal.

Setting aside re-opening of assessment under Section 147:
Lastly, the appellant contested the ITAT's decision to set aside the re-opening of assessment under Section 147. The court reviewed the CIT(A)'s findings regarding the presence of PE in India for different AEs and determined that since the same issue was involved in the current proceedings, no substantial question of law was raised. Consequently, the appeals were dismissed for lacking merit, and the order was directed to be uploaded on the website and forwarded to the counsel via email.