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TMI Blog2018 (10) TMI 353X X X X Extracts X X X X X X X X Extracts X X X X ..... e assessee has also preferred cross objection No. 266/DEL/2012. All these appeals were heard together and are being disposed off by this common order for the sake of convenience and brevity. 2. First we will take up assessee's appeal. ITA No. 1920/DEL/2012 [Assessee's appeal] 3. The sum and substance of the grievance of the assessee is that the ld. CIT(A) erred in concluding that the activities carried out by the assessee are in the nature of technical services. 4. Briefly stated, the facts of the case are that the appellant company, viz., Ericson Telephone Corporation India AB(India Branch) is an entity incorporated in Sweden with limited liability, which is a fully owned subsidiary of M/s Telefonaktiedolaget LM Ericsson AB, Sweden. I ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Sweden. 6. We find that in assessment year 2000-01, the dispute travelled upto the Tribunal and the Tribunal in ITA No. 893/DEL/2006 held as under: "10. We are not convinced with the contention put forth on behalf of the Revenue. A Protocol to the DTAA is, for all practical purposes, to be considered as its part and parcel. There is no question of resorting to it only if some clarity is wanting in the DTAA. In fact, a Protocol completes the DTAA. If a particular benefit is being conferred, expanded or reduced by the Protocol, which is absent in the DTAA, then the provisions of the Protocol shall apply pro tanto. A Protocol cannot be viewed as a document independent of the DTAA and has to be considered as its addendum. We, therefore, do n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on issues decided by the Authority, which remain unaltered by the DTAA of 1998 or the Protocol, will have to be applied as such. It is made clear that discussion of the new DTAA or the Protocol above should not be construed as reflection of our opinion on its applicability or otherwise to the facts of the ITA No.893/Del/2006 instant case. The AO should decide its implications independently on merits. Needless to say, the assessee will be allowed a reasonable opportunity of hearing in such fresh proceedings." 7. On finding parity in the facts and respectfully following the co-ordinate bench [supra], we direct accordingly. 8. A similar view was taken by the co-ordinate bench in assessment year 2001-02 in ITA No. 894/DEL/2006. The relevant f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n the table below: S. No. Income component Amount (Rs.) Taxing Principal 1 Fee from technical services from Indian concerns 9,32,48,802/- Sec. 44D, Sec. 115A read with Article 7 of 2 Fee from technical services from foreign services 4,81,08,814/- Article 7 of DTAA 3 Interest income 18,69,986/- Article 11(5) read with Article 7 of the DTAA 4 Marketing Support Services provided to foreign concerns 34,58,1407- Article 7 of the DTAA 13. The appellant company had used Transactional Net Margin Method [TNMM] as the most appropriate method and OP/TC as the Profit Level Indicator [PLI]. 51 comparables were used, which were mainly in the business of construction/installation and erection services. The Mean OP/TC of the co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... contended that six months operation of the assessee in installation and erection activity should be compared and bench marked. The assessee submitted the calculation of the results upto the sale of the business segment. It was further contended that since the assessee has sold the business in the middle of the F.Y., the assessee was incurring unutilized capacity in the form of fixed cost no longer recoverable through normal business activity. Therefore, it was pleaded that the excess costs towards unutilized capacity should be excluded from the total operating cost in order to bring the level of capacity utilization of the comparables in line with that of the assessee. 16. After considering the facts and submissions and the remand report, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... /TPO. It is the say of the ld. DR that the ld. CIT(A) has not given sound reasoning while deciding the issue in favour of the assessee. 18. Per contra, the ld. counsel for the assessee strongly supported the findings of the first appellate authority. 19. We have carefully considered the orders of the authorities below. There is no dispute that the assessee sold its major business activity in the middle of FY. It is equally true that the assessee was incurring unutilised capacity in the form of fixed costs which were no longer recoverable through normal business activity. Meaning thereby, that there was no level playing field with the 51 comparables, in as much as, the comparables were not on the same platform with that of the assessee. In ..... X X X X Extracts X X X X X X X X Extracts X X X X
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