TMI Blog2022 (1) TMI 960X X X X Extracts X X X X X X X X Extracts X X X X ..... ed:- 10-12-2021 - Shri Kuldip Singh, JM And Shri Amarjit Singh, AM For the Appellant : Shri P. J. Pardiwala /Nishant Thakkar/Jasmin Amalasadvala, Ld. ARs For the Respondent : Shri Milind Chavan, Ld. DR ORDER PER KULDIP SINGH (JUDICIAL MEMBER): 1. The Assistant Commissioner of Income Tax (Intl. Taxation), Circle-4(2)(2), Mumbai [hereinafter referred to as the revenue] by filing of aforesaid appeal sought to set aside impugned order passed by AO u/s 143(3)/144C(13) for AY 2017-18 on the grounds interalia that:- 1. Ground 1 The learned AO has, on the facts and circumstances of the case and in law, and based on the directions of the Hon'ble DRP, erred in proposing to assess the total income of the Appellant at ₹ 899,470,800 as against a loss of ₹ 79,280,349 reported by the Appellant in its return of income. 2. Ground 2 The learned AO has, on the facts and circumstances of the case and in law, and based on the directions of the Hon'ble DRP, erred in holding that the Appellant has a business connection in India as per the provisions of section 9(1)(i) of the Act and a Permanent Establishment (PE) in India as per Artic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rred in holding that SRSIPL could also constitute a Subsidiary PE of the Appellant in India as it carries out all the acts of the parent company in India. 2.5 The learned AO has, on the facts and in the circumstances of the case and in law, and based on the directions of the Hon'ble DRP, erred in estimating 10 per cent of the gross receipts attributable to the Indian operations to be the profit generally made by a re- insurance company in India and in estimating 50 per cent of the profit determined above to be attributable to the Appellant in India. 2.6 The learned AO has, on the facts and in the circumstances of the case and in law, and based on the directions of the Hon'ble DRP, erred in holding that the remuneration paid to SRSIPL is not at arm's length price without giving any detailed reasons thereof. 3. Ground 3 The learned AO has, on the facts and circumstances of the case and in law, and based on the directions of the Hon'ble DRP, erred in not following the decision of the Hon'ble Income-tax Appellate Tribunal (ITAT), Mumbai in the Appellant's own case, on the same facts, for AY 2010-11, AY 2011-12, AY 2012-13, AY 2013-14 and AY ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e assessee that It does not have any PE in India, hence its income is not taxable in India and proceeded to hold that in view of the services agreement between assessee and Swiss Re Services India Private Limited (SRSIPL) and it works as a dependent agent of the assessee, thus constitutes a PE (DAPE) of the assessee in terms of article 5.5 of DTAA and thereby an amount of ₹ 97,87,37,706 (being 15% of the 10% of the total turnover of the assessee) is added to the total income of the assessee and compute the income of the assessee at ₹ 89,94,57,360/- under rule 10 of the I.T. Act. 5. Feeling aggrieved, assessee approached the DRP by way of challenging the draft order who has upheld the draft order by dismissing the objections raised by the assessee. 6. Feeling aggrieved the order passed by AO/DRP, assessee come up before the Tribunal by way of filing the present appeal. 7. We have heard Ld. ARs for the parties to the present appeal and perused the order passed by lower authorities in the light of the arguments addressed by the ld. A.Rs for the parties to the appeal and law on the issue in controversy. Ground No. 1 8. This ground is general in nature, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 'ble High Court of Bombay held that: 47. However as no final assessment order has yet been passed by the Assessing officer and the issues are still at large before the DRP the same could be urged before the DRP......... ......... ......... ......... ......... ........ The process before the DRP is a continuation of the assessment proceedings as only thereafter would a final appealable assessment order be passed. Till date there is no appealable assessment order. The proceeding before the DRP is not an appeal proceeding but a correcting mechanism in the nature of a second look at the proposed assessment order by high functionaries of the revenue keeping in mind the interest of the assessee. It is a continuation of the Assessment proceedings till such time a final order of assessment which is appealable is passed by the Assessing Officer. This also finds support from Section 144C(6) which enables the DRP to collect evidence or cause any enquiry to be made before giving directions to the Assessing Officer under Section 144C(5) . The DRP procedure can only be initiated by an assesses objecting to the draft assessment order. This would enable correction in the proposed order (d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... it have any PE in India. The Tribunal, in very clear terms held that SRSIPL cannot be considered as a service/dependent agent PE of the assessee. The same view was reiterated by the Tribunal while deciding appeals for assessment years 2011-12 and 2012013 vide ITA Nos 1350 1351/Mum/2016 dated 223-01-2018, for assessment year 2013-14 vide ITA No.2759/Mum/2017 dated 04-07-2017 and for assessment year 2015-16 in ITA No.4898/Mum/2018 dated 26-12-2018. Thus, from the facts discussed above it is amply clear that the issue, whether SRSIPL can be considered as a PE of the assessee in India has arisen time and again before the Tribunal and the Tribunal has consistently decided in favour of the assessee. In fact, the impugned direction of the learned DRP would reveal that though learned DRP was conscious of the fact that the Tribunal has decided the issue in favour of the assessee in assessment year 2010-11; however, since the revenue has filed an appeal against the decision of the Tribunal, learned DRP decided the issue against the assessee just for the sake of keeping it alive. However, we are unable to accept the aforesaid reasoning of learned DRP. Therefore, respectfully following the d ..... X X X X Extracts X X X X X X X X Extracts X X X X
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