TMI Blog2018 (2) TMI 1346X X X X Extracts X X X X X X X X Extracts X X X X ..... 006-07 also on the very same reasoning, assessment was reopened and in the reason so recorded for reopening, AO observed that receipts in pursuance of off-shore service contract are in nature of royalty and in pursuance of the contract for deputation of specialists and off-shore training contracts are in the nature of fees for technical services. Similar reasons have been recorded during the year under consideration. As the facts and circumstances during the year under consideration are parameteria, respectfully following the same, we do not find any merit for reopening of assessment u/s. 147 of the IT Act. - Decided against revenue. - ITA No.1000/Mum/2010 And ITA No.1095/Mum/2010 - - - Dated:- 16-2-2018 - SHRI R.C.SHARMA, AM AND SHRI C. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eed that the Russian Federation would assist India in selling up a Nuclear Power Station al Kudankulani, Tamil Nadu. The Government of India had identified NPCIL as the entity in India and the Russian Government had identified the assessee as an entity in Russia, which would be parties to the agreements referred above for the construction of Nuclear Power Station in India. In the return of income filed wiih the department, the assessee has claimed applicability of provisions of section 44BBB of the Act to the payment received from NPCIL and has offered 10% of the total amount received to tax. However, at the time of payment. NPCU, has deducted lax at source at the rate of 10% in accordance with the order passed under section 195(2) of the A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fore us, the Departmental Representative (DR) fairly conceded that the issue stands decided against the AO and in favour of the assessee. The Authorised Representative (AR) brought to our notice that in the draft assessment order for the AY. 2007-08 the AO had denied the assessee s similar claim, that the DRP in its directions had instructed the AO to accept the claim of the assessee, that the AO himself had accepted the position for the AY. s 2008-09 and 2010-11. He further stated that income earned by the assessee from service contract had to be computed as per the provisions of section 44 BBB. He referred to the order of the Tribunal in assessee s own case, for the AY 2009-10 and 2010-11 (ITA/6581/Mum/2012 and ITA/6401/Mum/2013 dt. 22. 3 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t, and relevant DTAA as well as the principles of law laid down in judicial precedents, in a detailed order ultimately concluded, since, supply of materials and equipments under the offshore supply contracts were carried out and concluded outside India, the receipts from off-shore supply contracts cannot be deemed to accrue or arise in India. The operative portion from the order of the Tribunal is extracted herein below: 15. Therefore, after analyzing the various case laws, statutory provisions, DTAA provisions and contractual terms and respectfully following judgment of Hon'ble Supreme Court in Ishikawajima Harima Heavy Industries Limited V/s DCIT (288 ITR 408), we are inclined to hold that Offshore Supply contracts were carr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion in the return of income and the basis for the same. In the return itself, the assessee company has mentioned that CIT(A) in the case of NPCIL held that the payment made to the assessee company under the above contracts are covered by the provisions of Section 44BBB. Reliance was placed by learned AR on the decision of Jurisdictional High Court in the case of Jet Airways 331 ITR 236. Reliance was also placed on the decision of Jurisdictional High Court in the case of German Remedies Ltd. , reported at 285 ITR 26. 11. Learned AR also placed on record, the order of Tribunal for the A. Y. 2006-07 dated 04/12/2013 wherein exactly similar issue of reopening has been decided in favour of the assessee. The precise observation of the Tribunal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... preme Court in the case of Kamalakshi Finance Corporation (supra). It is also pertinent to note that the AO has given appeal effect to the order of the Ld. CIT(A) on 5. 3. 2009 which was also prior to the date of issuing notice u/s. 148 of the Act. As the entire reopening was based on what happened in assessment year 2005-06 that very basis being struck down by the first appellate authority, there was no reason before the AO to believe that the income has escaped assessment. 12. 1. Another important factor to be considered is that the assessment order for A. Y. 2005-06 is dt. 31. 12. 2007 and the return for the impugned assessment year was filed on 29. 10. 2007 which means that the AO had sufficient time to take the return under scrutiny as ..... X X X X Extracts X X X X X X X X Extracts X X X X
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