TMI Blog2022 (9) TMI 1313X X X X Extracts X X X X X X X X Extracts X X X X ..... IAL MEMBER ASSESSEE BY : Shri Anmol Anand , Advocate REVENUE BY : Shri Sanjay Kumar , Senior DR ORDER PER SHAMIM YAHYA , ACCOUNTANT MEMBER : This appeal by the assessee is directed against the order of the ld. CIT (Appeals)-42, New Delhi dated 31.05.2019 for the Assessment Year 2016-17. 2. The grounds of appeal raised by the assessee read as under :- 1. That on the facts and in the circumstances of the case and in law, the order passed by the Commissioner of Income-tax (Appeals) [ CIT(A) ] under section 250 of the Income-tax Act, 1961 ( Act ), to the extent prejudicial to the Appellant, is bad in law and void ab-initio. Existence of an Association of Persons ( AOP ) 2. That the Assessing Officer ( AO ) grossly erred m law in concluding the existence of an AOP between the Appellant and Bombardier Transportation India Ltd. ( BTIN ), in respect of their contract with Delhi Metro Rail Corporation ( DMRC ). Re : BTIN forms a Fixed Place Permanent Establishment of the Appellant in India. 3. That the CIT(A) erred in upholding the action of the AO in treating BTIN as a Fixed Place Permanent Establishment ( Fixed Place PE ) of the Appellant ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e that BTI was separately charging/billing DMRC for all the services rendered by it and all the receipt to BTIN from BS-02 and CS-l Contract had been duly offered to tax in India by BTIN. 14. That the CIT(A) failed to appreciate that BTIN was not held as a PE of Bombardier Transportation GMBH by the Ld. CIT(A) while deciding the appeal for Bombardier Transportation GMBH and therefore, similar treatment should have been granted to the Appellant. 15. That the CIT(A)/ AO erred in attributing 10% of the net profits from the supply of goods to DMRC as attributable to the alleged BTIN PE of the Appellant company. 16. That the CIT(A) erred in concluding that basis the additional risk, there was a requirement to attribute additional income to the PE. 17. That the CIT(A) grossly erred in selectively relying on the decision of the Hon'ble High Court of Delhi in DIT v. Ericson AB [2011] 16 taxmann.com 371 (Delhi). 18. That without prejudice, the AO/ CIT(A) erred in holding that there existed a PE of the Appellant in India in the form of BTIN despite the conclusion of the AO that there also existed an AOP (consisting of the Appellant and BTIN) in India and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rain control and signaling equipment are not chargeable to tax in India in the absence of PE. However, AO was of the opinion that BTIN is to be treated as Permanent Establishment of assessee in India as it was held in earlier years. 6. Against the above order, the assessee filed appeal before the ld. CIT (A). Ld. CIT (A) referred to the finding of DRP in assessee s case for AY 2011-12 and was of the opinion that he was in agreement with the finding of ld. DRP for AY 2011-12. He also found that the contract CS01 and BS2 are similar and the same findings held good for the current assessment year. He also referred to Hon ble Delhi High Court decision in the case of Ericsson A.B. dated 23.12.2011 and several other decisions. He upheld the AO s action that assessee has a PE in India in the form of BTIN. However, as regards 35% attribution of gross profits made by the AO, ld. CIT (A0 directed that attribution of 10% will be justified. 7. Against this order, assessee is in appeal before us. We have heard both the parties and perused the record. 8. At the outset, ld. Counsel of the assessee contended that the issue is squarely covered in favour of the assessee by the decision of I ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2 contract with DMRC. 40. In our considered opinion, the entire findings of the DRP are based on erroneous appreciation of wrong facts and on such erroneous appreciation of wrong facts, the DRP held that BTIN is the PE of the appellant in India without appreciating the true facts that the appellant has no place of disposal in India in the office of BTIN from {here the appellant could have conducted its business in India. 12. On finding parity on facts, respectfully following the decision of the Coordinate Bench we direct the AO to delete the impugned additions. Ground No.3 with all its sub grounds are allowed. 13. Other grounds are consequential In nature and need no separate adjudication. 14. In the result, the appeal filed by the assessee is allowed. 11. We may also refer to the ITAT order for AY 2011-12 and concluding portion of the said order reads as under :- 38. We find that during the DRP proceedings, the DRP was misdirected in considering the contract RS 02. This contract is between BTIN Bombardier Transportation, Germany and DMRC and for this contract, Bombardier Transportation Germany has raised invoices on BTIN for offshore manufacture ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... view no Assessing Officer could proceed in another assessment proceeding without looking into the returned income qua its computation. 44. Considering the facts in totality, and also the fact that the TPO has examined the international transactions and has accepted the same to be at ALP, we do not find any merit the additions made by the DRP. We accordingly, direct the Assessing Officer to delete the addition of income attributable to PE amounting to Rs. 60,99,630/-. Grounds Nos. 7 to 14 taken together are allowed. 45. In the result the appeal filed by the assessee in ITA No. 859/DEL/2016 is allowed. 12. Accordingly, in the background of aforesaid precedent, we find that the same issue has been decided by the ITAT consistently in assessee s favour. The DRP order of AY 2011-12 which has been preferred and referred by AO as well as by ld. CIT (A) has not been upheld by the ITAT and the ITAT has reversed the decision and decided the issue in favour of the assessee. Since no distinguishing features on the facts of this year and earlier years were brought to our notice, nor it is the case that any of the orders have been reversed by Hon ble jurisdictional High Court, w ..... X X X X Extracts X X X X X X X X Extracts X X X X
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