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TMI Blog2017 (10) TMI 534X X X X Extracts X X X X X X X X Extracts X X X X ..... CIT(A) did not adjudicate the same, since he had held that the receipts relating to operations carried outside India is not required to be considered. Now we have held that the receipts relating to operations carried outside India is required to be considered. Accordingly the foreign exchange gain relating thereto is also required to be taken into account for determining the income of the assessee. Accordingly we confirm the view taken by the AO on this issue. - I.T.A. No. 2952/Mum/2010, I.T.A. No. 4930/Mum/2014 And I.T.A. No. 4931/Mum/2014 - - - Dated:- 6-10-2017 - Shri B.R. Baskaran (AM) And Ramlal Negi (JM) For The Assessee : Shri G.C. Srivastava For The Department : Shri Samuel Darse ORDER PER BENCH: All the three appeals filed by the revenue and the cross objections filed by the assessee are directed against the orders passed by Ld CIT(A)-10, Mumbai and they relate to the assessment years 2006-07 to 2008-09. Since issues urged in these appeals are identical in nature, they were heard together and are being disposed of by this common order, for the sake of convenience. 2. The facts relating to the case are discussed in brief. The assessee is a co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ned the scope of work carried on by the assessee as enumerated in the agreement and finally concluded as under:- 9 . A synopsis of the various clauses of the agreement, as mentioned above, had to be mentioned to prove that whatever payments the assessee received in the initial stages of the work especially for the year under reference involved such a complex and multiple diversified activities for which the assessee had to be physically present through various technical persons etc in connection with aforementioned works so as to commence the project . The assessee cannot take the plea that work in India started with the transportation of saleaway jackets which were fabricated outside Indian waters in the Middle East. This suggests that the assessee had to undergo various exercises and activities in the Indian territorial waters in order to commence the project work so that the project was successfully commenced, installed and commissioned. The AO also discussed various case laws relied upon by the assessee and held that they are distinguishable. Finally the AO concluded as under:- 11. Since the assessee was exclusively dealing with the commissioning of platforms m ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to Indian PE would only be taxable in India. 6. The Ld CIT(A), however, upheld the action of the AO in rejecting the books of accounts. 7. With regard to the income computation, the Ld CIT(A) held that only gross receipts relating to inside India operations alone is attributable to PE and to be taxed u/s 44BB(1) of the Act. 8. The Ld CIT(A) also held that the interest u/s 234B cannot be charged on the assessee, since the entire payment is subject to TDS. In this regard, the Ld CIT(A) placed reliance on the decision rendered by Hon ble Bombay High Court in the case of NGC Network Asia LLC (2009)(222 CTR (Bom) 86). 9. The revenue is aggrieved by the decision of Ld CIT(A) in excluding the receipts pertaining to operations carried out outside India and also in holding that the interest u/s 234B is not chargeable. 10. The assessee has filed cross objection, wherein the assessee is challenging the decision of the Ld CIT(A) in confirming the rejection of books of accounts and also in upholding the decision of the AO in assessing income relating to Indian operations u/s 44BB(1) of the Act. 11. The Ld D.R submitted that the Ld CIT(A) was not justified in holding that th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the issue by following the decision rendered by the jurisdictional Bombay High Court in the case of NGC Network Asia LLC (supra). Hence we do not find any infirmity in the order passed by Ld CIT(A) on this issue. 16. The Ld A.R submitted that the assessee has filed cross objection, wherein it is challenging the rejection of books of account as well as the rejection of income computed by the assessee. The Ld A.R submitted that the Ld CIT(A) has confirmed the order of the AO in rejecting the books of accounts and in determining income @ 10% of the gross receipts relating to operations carried on in India. He submitted that the assessee had computed the income without including receipts relating to the operations carried out outside India. However, since the assessee has accepted the view of the AO that the entire receipts are assessable in India, he submitted that the financial statements need to be recast. Accordingly he prayed that the assessee may be given an opportunity to represent its case for the determination of income. The Ld A.R also made submissions as to how the income should have been computed and pleaded that a view may be taken by the bench. 15. The Ld D.R, howev ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... adjudicate the same, since he had held that the receipts relating to operations carried outside India is not required to be considered. Now we have held that the receipts relating to operations carried outside India is required to be considered. Accordingly the foreign exchange gain relating thereto is also required to be taken into account for determining the income of the assessee. Accordingly we confirm the view taken by the AO on this issue. 19. The assessee has filed cross objection for AY 2007-08, wherein it is challenging the order of the AO in confirming the rejection of books of account and in estimating income u/s 44BB(1) of the Act. Identical issue was considered by us in AY 2006-07 in the preceding paragraphs and both the issues have been restored to the file of the AO for the reasons discussed therein. Consistent with the view taken therein we restore these issues to the file of the AO with similar directions. 20. We shall now take up the appeal filed by the revenue for AY 2008-09. In this year also, the Ld CIT(A) held that the receipts relating to operations carried out outside India is not required to be considered for determining the income. We have set aside ..... X X X X Extracts X X X X X X X X Extracts X X X X
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