TMI Blog2016 (5) TMI 849X X X X Extracts X X X X X X X X Extracts X X X X ..... 4/-. 2. Following grounds have been raised in this appeal by the assessee :- 1. The Learned Dispute Resolution Panel ('Ld. DRP') and Learned Assessing Officer ('Ld. AO') erred in following the order of AY 2010-11 without giving due consideration to the submissions of the assessee. 2. The Ld. DRP and Ld. AO erred in holding that assessee has a service Permanent Establishment ( PE ) in India within the meaning of Article 5 of India UK Double Taxation Avoidance Agreement ( DTAA ). 3.The Ld. DRP and Ld. AO erred in holding that the assessee has a service PE in India under Article 5(2)(k) of the DTAA without appreciating that: - -Technology Transfer Agreement ( TTA ) dated March 5, 2004 read with Intellectual Property Agreement ( IPA ) dated December 17, 2007 and International Personnel Assignment Agreement ( IP AA ) dated December 5, 2005 are independent contracts for materially different purposes. -IP AA between JC Bamford Excavators Limited ( JCBE ) and JCB India Limited ( JCB India ) provides for employees sent by JCBE to JCB India on deputation (secondment) which is admittedly as per specific requirements of JCB India and not for servi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y connected to alleged service PE of the assessee in India. 8. Under the facts and circumstances of the case and in law, the Ld. Aa while framing the assessment order has erroneously erred in not following the direction of Ld. DRP by allowing expenses at a lower amount of INR 329,238,504/- instead of INR 411,548,129/- (1/3rd ofthe amount attributed to alleged Service PE in India, as directed by Ld. DRP). 9. Under the facts and circumstances of the case and in law, the Ld. DRP and Ld. AO erred in levying interest under Section 234A, 234B, 234C and 234D of the Act. 10. The Ld. AO erred in initiating penalty proceedings under Section 271(1)(c) of the Act for furnishing inaccurate particulars of income. That the above grounds of appeal are without prejudice to each other. That the appellant reserves its right to add, alter, amend or withdraw any ground of appeal either before or at the time of hearing of this appeal. 3. Grievance of the assessee vide ground nos. 1 to 3 is that as to whether the assessee has permanent establishment (PE in India or not ). As regards to this issue the ld Counsel for the assessee at the very outset stated that this issue has been de ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es of JCBE, earlier seconded to JCBI, continued to render services to JCBI during the year in question in the same way as they were doing in the past. This position was noticed by virtue of Clause (d) of the new Agreement and Clause 4.2 of this Agreement which clarifies that the delivery of technical documentation and making available of technical personnel as set out in earlier clauses III and IV of the Technology Agreement shall remain unaffected by this agreement and shall continue as rights and obligations between JCBE and JCBI under the Technology Agreement. The AO held that the above details coupled with the fact that JCBE received 99.5% of royalty from the assessee left nothing to doubt that there was service PE of the assessee as per Article 5(2)(k) of the DTAA covered within the ambit of other personnel . Since this position has been candidly accepted by the ld. AR as well, we, therefore, refrain from any independent evaluation of this aspect. The ld. AR accentuated that his objections against the holding of the service PE of the assessee in India were practically the same which were taken for the earlier years. The tribunal has discussed and jettisoned such objections in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e tribunal for the earlier years. The tribunal has held that the total amount consisting Lumpsum Licence/Know-how Fees and also royalty as mentioned in para 2.2 of TTA was consideration for the transfer of IP rights simplicitor and also the service rendered by the employees of the second category. The Tribunal further held that in so far as the question of royalty representing consideration for the transfer of IP rights simplicitor was concerned, the service PE representing the deputationists had no role to play either in creating or making it available to JCB India. That is how the Tribunal came to hold that the same was not effectively connected with the service PE of the assessee in India. The amount of royalty and consideration for rendering of services by the employees of second category has been held to be not falling in para 6 of Article 13 and hence chargeable to tax as per para 2 of Article 13 of the DTAA. However, as regards the fees for technical services resulting from the rendering of services by the employees of the second category, the Tribunal has held that the same did not fall in para 6 of Article 13 and was, hence, chargeable to tax as per para 2 of the Article 1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of interest u/s 234B is decided in favour of the assessee vide order dated 04.07.2014 in ITA No. 80/Del/2013 for the assessment year 2008-09. 11. In her rival submissions the ld. CIT DR supported the order of the AO and submitted that the charging of interest u/s 234A, 234B, 234C and 234D of the Act is mandatory. 12. After considering the submissions of both the parties, it is noticed that the issue relating to charging of interest u/s 234B of the Act has already been decided in assessee s favour in the earlier years and the relevant findings have been given in para 6 of the order dated 04.07.2014 in ITA No. 80/Del/2013 (supra) which read as under:- 6. The last ground of the assessee s appeal against the charging of interest u/s 234B is also decided in assessee s favour by following the view taken in the order for AY 2006-07. Relevant discussion has been made in para 20.2 of the order by which it was held that the liability of interest u/s 234B did not arise as the assessee had included the amount of royalty and fees for technical services in its total income. 13. So, respectfully following the aforesaid referred to order the issue relating to charging of ..... X X X X Extracts X X X X X X X X Extracts X X X X
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