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TMI Blog2019 (12) TMI 380X X X X Extracts X X X X X X X X Extracts X X X X ..... all, and the determination of the said issue was undertaken dehors the said explanation, upon appreciation of the evidence unearthed during the survey. The explanation may, or may not, be prospective. In any event, the same would certainly not have the effect of nullifying the determination made on the issue of PE on the basis of the evidence collected and the pre existing law as prevalent prior to the amendment of Section 9(1) with effect from 1st April, 2019. That, clearly, is not the purport of the substituted Clause (a) of Explanation-2 to Section 9(1) of the Act, with effect from 1st April, 2019. Another argument advanced by Mr. Billimoria is that the income of the assessee, on the basis that RRIL constituted its PE, has already been subjected to tax in the hands of PE i.e. RRIL, and the revenue is seeking to tax the same again. This submission has no merit. Firstly, this aspect does not raise a substantial question of law, since it is clearly a factual issue. Secondly, the order of the CIT(A) dated 15th February, 2009 was available when this Court rendered its decision on 30th August, 2011 in the case of the assessee, as taken note of hereinabove. No such plea was raised t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on is that on the same set of facts, the liaison office of RRIL has been held to be the PE of the appellant, as well as that of RRIL, which is not possible. 3. We have no difficulty in accepting the legal proposition laid down in M.M.Ipoh (supra). However, it was for the appellant to point out as to how the facts pertaining to the relevant assessment years were different from the facts on which the decision was rendered against the assessee, holding that RRIL constituted PE of the assessee in India. 4. The earlier decision against the appellant-assessee, holding that RRIL constituted its PE in India, pertains to the assessment years 1997-98 to 200304. The present appeal pertains to the assessment year 2004-05. The appellant has not been able to point out any pertinent difference in facts prevailing in the assessment year in question, and the assessment years to which the decision of this Court relates. 5. A perusal of the impugned order shows that the Tribunal has, in fact, considered and rejected the same arguments as advanced by the appellant before it. We may extract the relevant portion of the impugned order in this regard: 10. We have ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... independent PE of assessee in India or not, but the same activities arising from the same set of facts as alleged by the Revenue cannot give rise to two PEs, i.e., one PE for the assesse and another PE for RRIL. To canvass this point the ld. counsel has drawn our attention to the various findings of ld. CIT(A) in the case of RRIL and remand report of AO as contained in the appellate order dated 15.02.2009. He has pointed out that in the said order the ld. CIT(A) has relied upon same contents of report of survey conducted at the LO office of RRIL and exactly the same material has again been used in the case of the assessee also; and therefore, for the same activity there cannot be two PEs for two different entities. As culled out from the records, the survey of RRIL office in India had revealed certain facts which has been used by the Revenue authorities for holding that Rolls Royce Group has a PE in India. The contents of the survey have been discussed by this Tribunal in its order and have reached to the following conclusion:- It can, therefore, be summarized that in the light of the facts as well as document mentioned above, RRIL's presence in India is, a permanen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... son that while determining the issue whether RRIL constituted the PE of the appellant-assessee, the authorities have not relied upon the said explanation at all, and the determination of the said issue was undertaken dehors the said explanation, upon appreciation of the evidence unearthed during the survey. The explanation may, or may not, be prospective. In any event, the same would certainly not have the effect of nullifying the determination made on the issue of PE on the basis of the evidence collected and the pre existing law as prevalent prior to the amendment of Section 9(1) with effect from 1st April, 2019. That, clearly, is not the purport of the substituted Clause (a) of Explanation-2 to Section 9(1) of the Act, with effect from 1st April, 2019. 8. Another argument advanced by Mr. Billimoria is that the income of the assessee, on the basis that RRIL constituted its PE, has already been subjected to tax in the hands of PE i.e. RRIL, and the revenue is seeking to tax the same again. This submission has no merit. Firstly, this aspect does not raise a substantial question of law, since it is clearly a factual issue. Secondly, the order of the CIT(A) dated 15th Februa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e of the assesse the profit which has been attributed relates to purely sales of engines and parts. Further, nothing has been brought before us that under the MAP agreement the profit attribution of sales of RRPL were also subject matter of consideration or discussion and there cannot be any assumption that the quantum of tax agreed in the case of RRIL exhausts the contribution of profit to the PE of assesse in India. 13. In so far as attribution of profit is concerned, we are of the opinion that such a blanket attribution as done by the authorities below does not seems to be on a sound footing, especially when they have alleged that common activities were carried out from the LO. Then in that case, it would not possible to distinguish as to which activities of LO pertains to RRIL or activities of LO were undertaken on behalf of the assessee and what part of activities at the LO which assessee itself was executing for its sale. That being so, then ostensibly attribution of the profit to the activities in India of the assessee logically should be deducted by the amount attributed to RRIL. But we do not wish to give any finding or direction in this regard and we still pers ..... X X X X Extracts X X X X X X X X Extracts X X X X
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