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TMI Blog2023 (7) TMI 805X X X X Extracts X X X X X X X X Extracts X X X X ..... and it cannot be segregated. This service was not being provided on a item which can be consider as stand alone item even without availability of this agreement. As far as the first-fold of submission of assessee AO has perused the submission of the assessee, we are of the view that the assessee had made a fatuous attempt to goad the adjudicating authority in a field, where facts are not available. The theory of conditions enumerated in Article 13 of the DTAA between UK and India is totally misplaced. The enquiry at this angle is to be made if it is determinable that services provided by the assessee are stand alone services and not dependent upon the agreement. It is an unnecessary argument raised by the assessee before AO for absolving from tax liability and this effort was not examined by the ld. Assessing Officer elaborately and diligently. If agreement is being perused, then, it would give a meaning that it is a composite agreement and different category of receipts cannot be segregated from it. Therefore, this concept of applicability of Article 13 is not at all applicable in the present case. The facts to that effect are not available precisely. Non-examination of AO with th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng are that the assessee entered into an agreement with Brahmaputra Cracker and Polymer Limited (BCPL) on 18.03.2009, vide which licence for manufacture of linear polyethylene in Assam and its sale across the world. Under this agreement, the assessee granted licence and the necessary knowhow including design, procurement, construction and operation of plant in Assam for the patentee by innovene process for manufacture of linear polyethylene to BCPL. Thus the assessee was actively helped BCPL in setting up the production process including training of its manpower, providing expert as well as supervision and commissioning services. The assessee has received fees under different categories enumerated in the agreement. Copy of the agreement is available on pages no. 23 to 208 of the paper book. It has categorised the fees under following heads:- (a) "licence fee and payments" (Article 3 of the Agreement 3.1 to 3.1.6). The assessee has offered tax on receipt of this fee. (b) BDEP Fees - Article 3.2 of the Agreement- the assessee has paid tax on receipt of this fee also. (c) Training Fees- Article 3.3- it had paid tax on this receipt also. (d) Mandatory Service Fees- Article 3.4- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ITAT, Mumbai in the case of Raymond Limited -vs.- DCIT (86 ITD 791) and the decision of the Hon'ble Karnataka High Court in the case of CIT -vs.- De Beers India Minerals (P) Limited (2012) 21 taxmann.com 214. Though the ld. Assessing Officer has not made any discussion in the assessment order but it is to be construed that he must have applied his mind on this submission and only thereafter chose not to tax these receipts. He further contended that when ld. Assessing Officer has taken one of the plausible views on a debatable point, then, his order cannot be termed as erroneous and no action under section 263 deserves to be taken against the ld. Assessing Officer. In support of his contention, he placed on record a large number of decisions contained in the paper book running into 456 pages. In all, assessee has placed on record copies of 33 decisions. 8.1. In his next fold of submission, he submitted that whether the alleged supervision service fees is to be taxed as FTS or not, will depend upon the nature of technical services provided by the assessee and construction of facts along with interpretation of Article 13 of India-UK Treaty may lead to divergent opinion at the end of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... b-section and passed by the Assessing Officer had been the subject matter of any appeal filed on or before or after the 1st day of June, 1988, the powers of the Commissioner under this sub-section shall extend and shall be deemed always to have extended to such matters as had not been considered and decided in such appeal. (2) No order shall be made under sub-section (1) after the expiry of two years from the end of the financial year in which the order sought to be revised was passed. (3) Notwithstanding anything contained in sub-section (2), an order in revision under this section may be passed at any time in the case of an order which has been passed in consequence of, or to give effect to, any finding or direction contained in an order of the Appellate Tribunal, National Tax Tribunal, the High Court or the Supreme Court. Explanation.- In computing the period of limitation for the purposes of sub-section (2), the time taken in giving an opportunity to the assessee to be reheard under the proviso to section 129 and any period during which any proceeding under this section is stayed by an order or injunction of any court shall be excluded." 11. A bare perusal of the sub sec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was only when an order is erroneous that the section will be attracted. (iii) An incorrect assumption of facts or an incorrect application of law will suffice the requirement of order being erroneous. (iv) If the order is passed without application of mind, such order will fall under the category of erroneous order. (v) Every loss of revenue cannot be treated as prejudicial to the interests of the Revenue and if the AO has adopted one of the courses permissible under law or where two views are possible and the AO has taken one view with which the CIT does not agree. If cannot be treated as an erroneous order, unless the view taken by the AO is unsustainable under law. (vi) If while making the assessment, the AO examines the accounts, makes enquiries, applies his mind to the facts and circumstances of the case and determine the income, the CIT, while exercising his power under s 263 is not permitted to substitute his estimate of income in place of the income estimated by the AO. (vii) The AO exercises quasi-judicial power vested in him and if he exercises such power in accordance with law and arrive at a conclusion, such conclusion cannot be termed to be erroneous simply ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fifteen (15) working days of receipt of such "documents by Licensor. Notwithstanding this review, Licensee shall remain exclusively responsible for the design of the Plant and for ensuring that the design conforms to the BDEP; 7.1.2. Upon dispatch by the Licensor of its written comments on the Licensee P&ID's as defined in the Eighth Schedule (Licensee's "issued for construction" P&IDs) the Parties shall meet within thirty (30) days at a location and time to be agreed for the purpose of assisting Licensee in the interpreting and understanding Licensor's comments on Licensee's "issued for construction" P&IDs; 7.1.3 Licensee shall notify Licensor that the critical piping model is ready for review. Within thirty (30) days thereafter, the Parties shall meet at a location and time to be mutually agreed to review the critical piping model. Within twenty-eight (28) days, Licensor shall provide its written recommendations (if any) concerning the critical piping model. The documents referred to in this Clause 7.1 shall constitute the detailed engineering documents essential for Licensor to fulfill the warranty referred to at Clause 10.1. The meetings referred t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... perused the submission of the assessee particularly the note dated 15.11.2019 available on pages no. 4 to 7 of the paper book is concerned, we are of the view that the assessee had made a fatuous attempt to goad the adjudicating authority in a field, where facts are not available. The judgments of ITAT, Mumbai in the case of Raymond Limited as well as of Hon'ble Karnataka High Court in the case of De Beers India Minerals (P) Limited could only be relevant if the assessee has been providing this nature of services as a stand-alone and not dependent upon the other performance of this agreement. The theory of conditions enumerated in Article 13 of the DTAA between UK and India is totally misplaced. The enquiry at this angle is to be made if it is determinable that services provided by the assessee are stand alone services and not dependent upon the agreement. It is an unnecessary argument raised by the assessee before the ld. Assessing Officer for absolving from tax liability and this effort was not examined by the ld. Assessing Officer elaborately and diligently. If agreement is being perused, then, it would give a meaning that it is a composite agreement and different category of r ..... X X X X Extracts X X X X X X X X Extracts X X X X
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