9911796707
TMI Blog2024 (2) TMI 833X X X X Extracts X X X X X X X X Extracts X X X X ..... elating to the tenability of the impugned final assessment order. 1. On the facts and circumstances of the case in law, the Final Assessment Order dated September 11, 2023 ( Impugned Order ) passed by the Learned Assistant Commissioner of Income-Tax Circle-1(3)(1), International Taxation, Delhi ( Ld. AO ) under section 143(3) read with section 144C of the Income tax Act, 1961 ( Act ) pursuant to the directions issued by the Learned Dispute Resolution Panel ( Ld. DRP ) is bad in law and liable to be quashed. 2. On the facts and circumstances of the case in law, the Impugned Order, giving effect to the directions of the Hon'ble DRP dated August 8, 2023 is bad in law and barred by limitation in view of the provisions of Section 153 of the Act. Grounds relating to the taxability of Appellant in India under the Act and the Tax Treaty. 3. On the facts and circumstances of the case in law, the Ld. AO/ DRP grossly erred in holding that the receipts from offshore supply of parts is taxable in India both under section 9(1)(i) of the Act and Article 5 read with Article 7 of India-USA Double Taxation Avoidance Agreement ( Tax Treaty ). 4. On the facts and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a) the Ld. AO/ DRP, erred in attributing 100% of deemed profits from offshore supply transactions to alleged PE / business connection in India without considering the apportionment principle and further, did not allow any deduction for compensation paid to the Indian affiliate of the Appellant, in respect of marketing and sales support provided to the Appellant. (b) the Ld. AO erred in not following the directions of the Ld. DRP and incorrectly computed the total receipts from offshore supply for the concerned year as INR 1,24,96,28,023, in place of INR 1,18,26,08,690. (c) the Ld. AO/ DRP erred in changing the attribution rate as compared to the earlier assessment years and accordingly grossly erred in violating the principles of Article 7(5) of Tax Treaty. Other grounds. 9. On the facts and circumstances of the case in law, the Ld. AO has erred in determining the tax payable by the Appellant as INR 6,79,49,370 without providing any computation. 10. That on the facts of the case and in law, the Ld. AO erred in levying interest under section 234A and 244B of the Act. 11. That on the facts of the case and in law, the Ld. AO erred in initiating penalt ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... earlier, the short issue arising for consideration is whether the assessees had PE in India during the assessment years under consideration? From the facts and materials on record, it is observed, not only before the Assessing Officer, but even before learned DRP, the assessees have vehemently urged that since the factual position in the impugned assessment years have substantially changed, the decision taken in past assessment years cannot be followed blindly. It was the case of assessees before the departmental authorities that as per the facts of the impugned assessment years, the assessees had no PE in India as the AIFACS building considered as the PE of the assessees was vacated by GEIOC on 01.05.2012. It was pleaded by the assessee that in these years, no expatriates have visited in India. As it appears, the departmental authorities have turned a blind eye to all the submissions and facts brought on record by the assessee. Merely following the decision taken by the appellate authorities and Hon ble High Court in past assessment years, the departmental authorities have concluded the existence of PE without looking into or examining the facts and evidences brought on record, w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bmissions made and documents filed before the departmental authorities. Despite such submissions and evidences produced by the assessee, the departmental authorities have remained oblivious to such facts and materials brought on record and proceeded to conclude existence of PE merely relying upon the past orders passed by them and higher appellate authorities. It is trite law, the existence or otherwise of PE has to be determined on year to year basis, as the existence of PE has to be decided based on the definition of PE in the relevant tax treaty. Merely because in one year, the assessee had a PE in India, that by itself cannot lead to the conclusion that the assessee must be having a PE in subsequent assessment year, without looking into the relevant facts. In this context, we refer to the decision in the case of M/s. Bentley Nevada Inc. (supra). Further, in case of E-Funds IT Solution Inc. (supra), Hon ble Supreme Court has very clearly and categorically held that the onus is entirely on the Revenue to establish existence of PE. 13. Adverting to the facts of the present appeal, undisputedly, the assessee brought on record all material and evidences to establish that it doe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ew, it has to be concluded that the departmental authorities have not found anything amiss or adverse in the facts and material brought on record by the assessee. In such a scenario, we do not find any reason to again remit the matter back to the Assessing Officer to provide him a second inning to improve upon the deficiencies in the original assessment order. In view of the aforesaid, we are inclined to hold that keeping in view the facts and materials peculiar to the impugned assessment year, it has to be concluded that the assessee did not have any PE, either fixed place PE or dependent agent PE, in India in the year under consideration. We again reiterate, our aforesaid conclusion is purely based on the facts involved in the impugned assessment year. 7. Akin to the case referred to above, in the facts of the present appeals also, the departmental authorities have failed to controvert either the submission or the materials and evidences brought on record by the assessees to demonstrate that they did not have any PE in India in these assessment years. In fact, even at the stage of Tribunal, no contrary material has been brought on record by the Revenue to rebut the claim of ..... X X X X Extracts X X X X X X X X Extracts X X X X
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