9911796707
TMI Blog2015 (1) TMI 353X X X X Extracts X X X X X X X X Extracts X X X X ..... and perused relevant material placed before us. The facts of the case are that the assessee is a company incorporated under the laws of People's Republic of China and is engaged in the business of supply of Boiler, Turbine & Generator (BTG) equipments to various companies setting up power plants in India. The assessee also provided supervisory services for erection/commissioning of such equipment at project owners' sites. The assessee offered income from supervisory service fee under Section 44BBB of the Income-tax Act, 1961. Regarding supply of BTG equipment, the assessee's contention is that these are off-shore supplies, hence, not taxable in India. The Assessing Officer, after detailed discussion on factual as well as legal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ions performed by the assessee's PE in India. Therefore, we find no reason to interfere with the above propositions made by the AO in the draft assessment order. The grounds of objection nos.1 to 5 are, accordingly, rejected." 3. After carefully considering the arguments of both the sides and the facts of the case, we are of the opinion that the order of the DRP is cryptic and non-speaking without considering any submissions and arguments of the assessee. We find that the assessment order is running into 44 pages. The assessee's objection to the DRP is of more than 60 pages in which the assessee has not only dealt with the factual aspect but has also referred to the various decisions of the ITAT, Hon'ble Jurisdictional High Cou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t the DRP has not considered either the assessee's contention or the decisions relied upon by the assessee or the provisions of DTAA and simply sustained the addition holding that the Assessing Officer has taken the stand after detailed analysis of terms and contract entered into by the assessee. That if the DRP has to simply endorse the order of the Assessing Officer, the purpose of creating the high-powered panel i.e., DRP, which is consisting of three Commissioners of Income-tax, would be totally frustrated. We are, therefore, of the opinion that the order of the DRP needs to be set aside being cryptic and non-speaking. 5. However, during the course of assessment proceedings, it was pointed out by the learned DR that the assessee ha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ne the same. He also submitted that the issue of determination of income from supervisory services is not in appeal before the ITAT and, therefore, it is not relevant how the income is offered by the assessee in respect of supervisory contract. He further submitted that if at all the matter is required to be sent back, then it should be sent to the file of the DRP and not the Assessing Officer. 7. After considering the above submissions of the parties, we are of the opinion that it would meet the ends of justice if the matter is set aside and restored to the file of the Assessing Officer. It is the assessee's contention that the assessee entered into two agreements, one for supply of equipment and another agreement for supervision of e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... quired under sub-section (2) of section 44AA and gets his accounts audited and furnishes a report of such audit as required under section 44AB, and thereupon the Assessing Officer shall proceed to make an assessment of the total income or loss of the assessee under sub-section (3) of section 143 and determine the sum payable by, or refundable to, the assessee.]." 8. Section 44BBB is applicable for computing the profits and gains of foreign companies engaged in the business of civil construction or in certain turnkey power projects. Thus, the assessee is taking a contradictory stand while offering income in respect of supervisory service agreement and in respect of equipment supply agreement. Moreover, the contention of the learned DR that ..... X X X X Extracts X X X X X X X X Extracts X X X X
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