TMI Blog2022 (1) TMI 1290X X X X Extracts X X X X X X X X Extracts X X X X ..... ) charges treating the same in the nature for fee for technical services/fee for included services - HELD THAT:- Revenue has not disputed the fact that the Co-ordinate Bench for Assessment Year 2010-11 [ 2020 (10) TMI 654 - ITAT DELHI] held that business operations of the assessee, we hold that the services rendered by the assessee do not fall within the purview of managerial , consultancy or technical services. The payment for freight and logistics cannot be treated as technical services. Similarly, the provisions of Section 9(1)(i) are not attracted in this case as no income has accrued or arised from the business connection abroad in India. The explanation states that only that part of income from business operations can be said to be accruing or arising in India only if it is relatable to the carrying of operations in India. Thus, the payment received by the assessee neither falls under Section 9(1)(i) or Section 9(1)(vii). Disallowance of reimbursement of lease line charges holding that the amount is in the nature of royalty - HELD THAT:- As in assessment Year 2004-05 in the assessee s own case wherein the issue was decided in favour of the assessee by the Co-ordinate B ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ble DRP') on the facts and law, have erred in holding that fee for freight/ logistic support services by the T 1 Appellant, rendered outside India amounting to INR 2,75,31,32,292 is in the nature of fee for technical services / Fee for Included Services as per the provisions of section 9(1)(vii) of the Act and under Article 12 of the India-USA Double Taxation Avoidance Agreement ('DTAA') respectively. 2.1 That the Ld. AO and the Hon'ble DRP have erred in law and on facts by upholding the fee for logistics support services to be in the nature of fee for technical support by considering entirely incorrect set of facts which do not pertain to the issue at hand. 3. That the Ld. AO and Ld. DRP, on the facts and law, have erred in holding that reimbursement of Global Account Management ('GAM') charges amounting to INR 3,09,85,415 received by the Appellant from Expeditors International (India) Private Limited ('El India') is in nature of fee for technical services / fee for included services as per the provisions of section 9(1)(vii) of the Act and under Article 12 of the India- USA DTAA respectively. 4. That the Ld. AO and the Ld. DRP, on the fact ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d the assessee vide order entry dated 29.01.2016 to explain whether there was any change in business model of the assessee as compared to Assessment Year 2011-12. It was further asked to explain as to why the assessment should not be completed on the line of the assessment made in Assessment Year 2011-12 on the issues of Logistic Service Fees and General Account Management Charges. In reference to that the assessee filed its reply that reply was not found acceptable by the Assessing Officer and proposed to assess the total income at Rs. 3,12,41,26,601/-. 4. The assessee aggrieved by the proposed order filed its objection before the Dispute Resolution Panel-1, New Delhi [in short the DRP-1 ]. The objections of the assessee for decided against the assessee. Therefore, the Assessing Officer in pursuance to direction of the DRP and considering the facts of the case assessed the income at total income of Rs. 3,12,41,26,600/- against the return income of Rs. 32,79,49,150/-. 5. Ground No.1 raised by the assessee is general in nature, needs no separate adjudication. 6. Ground No.2 is against the addition of Rs.2,,75,31,32,292/- holding that fee for freight/logistic support servic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hipment of transport of goods perform outside in India and the contract is entered between expertise international India Pvt. Ltd. and the customers i.e. at the consigner sent in the case of expert of Consignment from India to overseas countries found USA and between the assessee and the customer that is at the consignment end in the case of import of consignment from other countries i.e. USA to India. As regards GAM charges/expenses, the cost of these group is allocated to a respective countries benefited to these services and are incurred outside India. The GAM staff is employed with the assessee and there is no employer-employee relationship between the employees and the expeditor international India. These actual expenses incurred by the assessee are allocated in proportion to the Revenue by the relevant expedite group entity in that country from that particular customer account which is managed by the GAM team. These so called expenses without any income element embed in them are then reimbursement to the assessee on actual basis by Expeditors International India. These facts were neither disputed by the Revenue before the DRP in Assessment Year 201011 nor in the present Asses ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or arising in India only if it is relatable to the carrying of operations in India. Thus, the payment received by the assessee neither falls under Section 9(1)(i) or Section 9(1)(vii). Hence , we hereby decline to interfere with the directions o f the Dispute Resolution Panel in this case. 16. Further, the Tribunal following the decision in ITA No.1705/Del/2016 pertaining to Assessment Year 2011-12 held as under:- After going through the directions of DRP as well as the agreements in consonance with present Assessment Year, it is found that the activities mentioned by the assessee do not fall within the purview of Managerial/Consultancy or Technical Services. Thus, the payment towards the same cannot be treated as technical Services. The Support Services are very much of a general services in nature and does not require any Managerial/Technical or Consultancy Expertise. The assessee during the assessment year 2011-12 has categorically mentioned that the nature of these operations is purely logistic support provided by the assessee for shipment of transport of goods perform outside in India and the contract is entered between expertise international India Pvt. Ltd. and th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Bench of the Tribunal in ITA No.4226/Del/2007 pertaining to Assessment Year 2004-05 in the assessee s own case holding as under:- 6. On due consideration of the facts and circumstances in the light of ITAT s order, in earlier years, which have been affirmed by the Hon ble Delhi High Court in ITA No.475/Del/2009 and 751/Del/2010, we do not find any error in the order of the Learned CIT(Appeals). Both the grounds taken by the Revenue are, therefore, rejected. 20. Further, following the decision of Co-ordinate Bench of the Tribunal in ITA No.2128/Del/2011 pertaining to Assessment Year 2005-06 in assessee s own case holding as under:- 28. We have heard the rival submissions and perused all the materials available on record. The issue in the present ground is with respect to the disallowance of VSAT expenses by invoking the provision of section 40(a) of the Act. We find that identical issue arose in assessee s own case in A.Y. 2001-02 2004-05 wherein the issue was decided in favour of the assessee by the Co-ordinate Bench of Tribunal. We further find that the order of Tribunal in favour of the assessee was upheld by the Hon ble Delhi High Court. Before us, no distinguis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... led of by the department. [See CIT vs Motors General Stores 66 ITR 692 (SC)]. 20. In a taxing Act one has to look merely at what is clearly said. There is no room for any intendment. There is no equity about a tax. There is no presumption as to a tax. Nothing is to be read in, nothing is to be implied, into the provisions which has not been provided by the legislature [See CIT Vs Radhe Developers 341 ITR 403 ]. One can only look fairly at the language used. No tax can be imposed by inference or analogy. It is also not permissible to construe a taxing statute by making assumptions and presumptions [See Goodyear Vs State of Haryana 188 ITR 402(SC)]. 21. There are several decisions which lay down rule that the provision for deduction, exemption or relief should be interpreted liberally, reasonably and in favour of the assessee and it should be so construed as to effectuate the object of the legislature and not to defeat it. Further, the interpretation cannot go to the extent of reading something that is not stated in the provision [See AGS Tiber Vs CIT 233 ITR 207]. 22. Applying the aforesaid principles, we find that the legislature, in Section 40(a)(ii) has provided that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2. That the Ld. AO and the Hon'ble DRP on the facts and in law, have erred in holding that fee for freight/ logistic support services by the Appellant, rendered outside India amounting to INR 3,26,62,68,670 is in the nature of fee for technical services / Fee for Included Services as per the provisions of section 9( 1)(vii) of the Act and under Article 12 of the India-USA Double Taxation Avoidance Agreement ('DTAA') respectively. 3. That the Ld. AO and Hon'ble DRP, on the facts and in law, have erred in holding that reimbursement of Global Account Management ('GAM') charges amounting to INR 3,08,84,909 received by the Appellant from Expeditors International (India) Private Limited ('El India') is in nature of fee for technical services / fee for included services as per the provisions of section 9(1 )(vii) of the Act and under Article 12 of the India-USA DTAA respectively. 4. That the Ld. AO and the Ld. DRP, on the facts and in law, have erred in holding that the reimbursement of lease line charges amounting to INR 1,60,31,536 received by the Appellant from El India is in nature of royalty under Explanation 2 to section 9(l)(vi) of the Act and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rticle 12 of the India-USA Double Taxation Avoidance Agreement ('DTAA'). 3. That the Ld. AO and Ld. DRP, on the facts and in law, have erred in holding that reimbursement of Global Account Management ('GAM') charges amounting to INR 3,81,08,797 received by the Appellant from Expeditors International (India) Private Limited ('El India') is in nature of FTS/FIS as per the provisions of section 9(l)(vii) of the Act and under Article 12 of the IndiaUSA DTAA. 4. That the Ld. AO and the Ld. DRP, on the facts and in law, have erred in holding that the reimbursement of lease line charges amounting to INR 1,94,10,291 received by the Appellant from El India is in nature of royalty under Explanation 2 to section 9(l)(vi) of the Act andunder Article 12 of the India-USA DTAA. 5. That without prejudice to any other ground of appeal, the Ld. AO on the facts and in law, has erred in levying interest under section 234A of the Act. 6. That Without prejudice to any other ground of appeal, the Ld. AO on the facts and in law has erred in levying interest under section 234B of the Act. 7. That on the facts and in law, the Ld. AO has erred in initiating penalty proc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Article 12 of the India-USA DTAA. 5. That without prejudice to any other ground of appeal, the Ld. AO on the law, has erred in levying interest under section 234B of the Act. 6. That without prejudice to any other ground of appeal, the Ld. AO on the facts and in law, has erred in levying interest under section 234B of the Act. 7. That on the facts and in law, the Ld. AO has erred in initiating penalty proceedings u/s 271(l)(c) of the Act mechanically by alleging that the Appellant has furnished incorrect particulars of income without recording any adequate satisfaction for such initiation. 8. The above grounds of appeal are all independent and without prejudice to each other. 35. The facts and grounds are identical as were in ITA No.1904/Del/2017 pertaining to Assessment Year 2012-13. The Ld. Representatives of the parties have adopted the same arguments as were in ITA No.1904/Del/2017 [Assessment Year 2012-13]. We, therefore taking the consistent view, partly allow the grounds raised by the assessee in this appeal. Our finding on the identical grounds raised by the assessee in ITA No.1904/Del/2017 shall apply on the grounds raised in the year under consideration mu ..... 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