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TMI Blog2018 (2) TMI 298X X X X Extracts X X X X X X X X Extracts X X X X ..... rcise as discussed above can be done by the AO only if the assessee extends co-operation and furnishes all the relevant agreements or other documents as be called for by the Assessing Officer for determining the amount of income from rendition of services. The ld. AR has undertaken to supply all the necessary documents and details as may be required by the AO. It is made clear that if the assessee fails to supply the information/documents as required by the Assessing Officer, as happened during the course of original assessment proceedings, then the Officer will be entitled draw an adverse inference against the assessee and proceed to make a fair and reasonable estimate. With the above observations, we remit the matter to the file of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e as well as agency PE of GE Overseas entities was established in India; attribution to the income of PE was to be done at 2.6% of the sales made by GE Overseas in India; and interest u/s 234B was not chargeable. The assessee preferred appeals before the Hon'ble High Court in respect of the instant eight matters, contending that the Tribunal overlooked the grounds raised in its appeals regarding installation of PE, ad-hoc attribution between sales and services and taxable income as fees for technical services. The Hon'ble High Court, vide its order dated 13.09.2017, has remitted the matter to the file of the Tribunal for adjudication of grounds regarding installation of PE; ad hoc attribution between sales and services; and taxabili ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... al estimated income @ 2.6 % on total Sales for working out the profits attributable to the PE in India. This order was passed in the context of GE Energy Parts Inc., which assessee was engaged in the Supply of turbines alone and not in Services of installation etc. The Ld. AR contended that the assessee under consideration, apart from supplying equipments, has also rendered services and hence separate adjudication is required in so far as income from Services is concerned. It was pointed out that the assessee treated service income as part of its profits for the Assessment Years 2001-02 to 2004-05 and in the absence of any PE, it was inferred that no income was taxable. However, for the Assessment Years 2005-06 2006-07, that is, the perio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Assessing Officer fell into error by considering 8.68% of total invoice values as fees for technical services for other years as well. On a pointed query, it was admitted that the relevant Agreements with different parties for supplying and installation of turbines, leading to the raising of invoices during these years, were not provided to the Assessing Officer and hence could not be considered. The Ld. AR maintained that in some cases of Supply, the assessee may have rendered Services as well as, while in other cases, it may not have done so. It was further stated, that there may have been the rendition of services independent of Supply of turbines. The stand of the assessee taken for the Assessment Years 2005-06 2006- 07 was that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g of invoices during the years under consideration. We order accordingly and direct the Assessing Officer to examine whether the assessee undertook any obligation to render services along with the Supply of turbines etc. or any services were rendered independent of Supply. If such an obligation was undertaken or such services were rendered, then he will segregate such amount as it relatable to these services. 10. The ld. AR contended that the Assessing Officer while computing income from fees of technical services also included Reimbursement of expenses in the base amount which, in his opinion, was not warranted. It is obvious that if there is certain reimbursement of expenses without there being any mark up of any nature, then the infer ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e fails to supply the information/documents as required by the Assessing Officer, as happened during the course of original assessment proceedings, then the Officer will be entitled draw an adverse inference against the assessee and proceed to make a fair and reasonable estimate. 13. The ld. AR contended that taxability of income from fees of technical services should be considered in the light of the judgment of Hon'ble Supreme Court in the case of ONGC Ltd. vs CIT [2015] 367 ITR 306 (SC). In this judgment, the Hon'ble Supreme Court has held that if imparting of training and carrying out drilling operations for exploration etc. are inextricably connected with prospecting, extraction or production of mineral oil, the dominant pur ..... X X X X Extracts X X X X X X X X Extracts X X X X
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