TMI Blog2022 (3) TMI 1209X X X X Extracts X X X X X X X X Extracts X X X X ..... sence of the expat employees. In our considered opinion, whether an assessee has PE in a particular Assessment Year has to be decided on facts of that Assessment Year and not by the facts of earlier Assessment Years. When the assessee has raised specific objections before the DRP, the DRP ought to have given findings on the objections raised by the assessee. We find that the order of the DRP is silent in this respect. Moreover, the premises which were considered to be at the disposal of the employees of the assessee were not in use any more in Assessment Years 2014-15 and 2015-16. This fact is also not dealt with by the revenue authorities. Since the entire assessment order/DRP orders are based on the findings given in Assessment Year ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tioned Assessment Years. - ITA Nos. 743, 6304/DEL/2017 & 484/DEL/2019 - - - Dated:- 7-3-2022 - SHRI N. K. BILLAIYA , ACCOUNTANT MEMBER AND SHRI ANUBHAV SHARMA , JUDICIAL MEMBER For the Appellant : Sachit Jolly , Adv. For the Respondents : Anupama Anand , CIT - DR ORDER Per N. K. Billaiya , Accountant Member The above captioned three separate appeals by the assessee are preferred against the orders dated 04.01.2017, 30.08.2017 and 29.10.2018, framed under section 144C(13) r.w.s. 143(3) the Income-tax Act, 1961 [hereinafter referred to as 'The Act'] pertaining to Assessment Years 2012-13, 2014-15 and 2015-16. 2. Since the underlying facts in issue are common in all these three appeals, they were heard toge ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dopted. The assessee was also asked to explain as to why it may not be held that it has business connection and PE in India and its income is taxable accordingly. 8. Vide reply dated 10.03.2015, the assessee specifically contended that it does not have a PE in India under Article 5 of the India-USA DTAA. In the alternative, the assessee contended that even if it is presumed that it has a PE in India, no further profits can be attributed in the hands of such alleged PE, as the assessee has adequately remunerated GE India Industrial Private Limited [GEIIPL] for local marketing support provided by it. 9. In support, the assessee submitted transfer pricing order passed in the case of GEIIPL for Assessment Year 2011-12 wherein it has been ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rofits to the PE. 13. Specific objections were raised before the DRP claiming that there were no expat employees present during the year under appeal and there is no mention of such employees in the assessment order. 14. Objections of the assessee did not find any favour with the DRP which was also influenced by the findings given in Assessment Years 2002-03 to 2006-07. 15. We have carefully considered the orders of the authorities below. There is no dispute that the Revenue has taken a particular stand in Assessment Years 2002-03 to 2006-07 which was upheld in the subsequent appellate proceedings. It is also not in dispute that for the year under consideration, there is no specific finding given neither by the Assessing Officer no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . The assessee is directed to furnish all necessary details in support of its claim that no expat employees were present during the Assessment Year under consideration. 20. With these directions, the first challenge is allowed for statistical purposes. 21. Second challenge is in respect to receipts of income from supply of software in India treating the same as royalty in terms of provisions of section 9(1)(vi) of the Act and Article 12 of the DTAA. 22. A perusal of the assessment order shows that referring to the definition of royalty as in India-USA DTAA, the Assessing Officer was of the opinion that the words use of or right to use denote that both specific use and use of copy right result in earning of royalty income, even if ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 5 of the Income-tax Act were not liable to deduct any TDS under section 195 of the Income-tax Act. The answer to this question will apply to all four categories of cases enumerated by paragraph 4 of this judgment. The appeals from the impugned judgments of the High Court of Karnataka are allowed, and the aforesaid judgments are set aside. The rule the AAR in Citrix Systems (AAR) (supra) is set aside. The appeals from impugned judgments of the High Court of Delhi are dismissed. 24. Respectfully following the decision of the Hon'ble Supreme Court [supra] we direct the Assessing Officer to delete the impugned addition in the captioned Assessment Years. 25. In the result, all the three appeals of the assessee in ITA Nos. 732, ..... X X X X Extracts X X X X X X X X Extracts X X X X
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