COMMISSIONER OF INCOME TAX INTERNATIONAL TAXATION-2, NEW DELHI V. M/S NANJING ELECTRIC GROUP CO. LTD.

ITA/406/2024

AI Insights

The case revolves around an appeal by the Commissioner of Income Tax International Taxation-2 against M/S Nanjing Electric Group Co. Ltd., concerning the assessment year 2013-14. The core issue was the taxation of income related to offshore supplies made by the respondent, which the Assessing Officer alleged was attributable to a permanent establishment (PE) in India. The Income Tax Appellate Tribunal (ITAT) had previously ruled in favor of the respondent, stating that there was no PE in India, a decision upheld by the Delhi High Court in earlier years. The Revenue's appeal was dismissed based on the lack of new substantial questions of law and the minimal tax effect involved.

• Counselvise Citation: [2024] 140 COUNSELVISE.COM (IT) 741007 (HC-DELHI)
• Appeal Type: Others
• Pronouncement Date: 14-11-2024
• Assessment Year: misc
• Other Referred Cases: Director of Income Tax (New Delhi) v. L.S. Cables Limited, Director of Income Tax v. L.G. Cables Limited
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Others
• Court: HIGH COURT
• Assessee Lawyers: SUNIL AGARWAL; SHIVANSH PANDYA; VIPLAV ACHARYA; UTKARSH TIWARI
• Keywords: Income tax appellate tribunal; Permanent establishment; Taxable income; Off-shore supplies
• Section: 260A

Judgement Text

"$~6 * IN THE HIGH COURT OF DELHI AT NEW DELHI + ITA 406/2024 COMMISSIONER OF INCOME TAX INTERNATIONAL TAXATION-2, NEW DELHI .....Appellant Through: Mr Sunil Agarwal, Senior Standing Counsel with Mr Shivansh B. Pandya, Mr Viplav Acharya and Mr Utkarsh Tiwari, Advocates. versus M/S NANJING ELECTRIC GROUP CO. LTD. .....Respondent Through: CORAM: HON'BLE MR. JUSTICE VIBHU BAKHRU HON'BLE MS. JUSTICE SWARANA KANTA SHARMA O R D E R % 14.11.2024 CM APPL. 43642/2024 1. For the reasons stated in the application, the same is allowed. 2. The application stands disposed of. ITA 406/2024 3. The Revenue has filed the present appeal under Section 260A of the Income Tax Act, 1961 impugning an order dated 22.08.2022 (hereafter the impugned order) passed by the learned Income Tax Appellate Tribunal (hereafter the Tribunal) in ITA No.1726/Del/2021 captioned DCIT v. M/s Nanjing Electric Group Co. Ltd. in respect of assessment year (AY) 2013- 14. 4. The dispute involved is centred around the addition in respect of income relating to off-shore supplies made by the respondent (Assessee). This is a digitally signed order. The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 21/11/2024 at 12:23:49 The Assessing Officer had sought to tax the same alleging that the Assessee had a permanent establishment (PE) in India and attributed 35% of the global net profit to the said PE. Accordingly, the taxable income was determined at ₹3,84,68,416/- instead of Nil as declared by the Assessee. It is noted that before the Tribunal, the learned counsel for the Revenue had conceded that the appeal may be decided based on the Tribunal’s decision in the earlier assessment year – AY 2009-10. 5. The learned ITAT had noted that the issue whether the assessee had a PE in India had been considered by the Tribunal in the case of the assessee for the AY 2009-2010 (ITA No.6175/Del/12), which was decided on 22.02.2013. In the said case, the ITAT had held that the assessee did not have a PE in India. 6. The Revenue had appealed the ITAT’s order dated 22.02.2013 in ITA No.6175/Del/2012 before this Court. However, the same was dismissed by an order dated 06.11.2013 passed in ITA No.488/2013. This Court had held that the issue was squarely covered by the earlier decisions in favour of the Assessee. The said order is set out below: “In view of the decisions of the Delhi High Court in Director of Income Tax (New Delhi) v. L.S. Cables Limited, ITA Nos. 704, 706 and 707 of 2011 decided on 30.9.2011 and Director of Income Tax v. L.G. Cables Limited; 2011 (2) AD (Delhi) 286 in ITA No.703/2009 decided on 24.12.2010, the present appeal has to be dismissed as the issues raised are already covered and decided by this Court in the aforesaid two decisions. Appeal is dismissed.” 7. In view of the above, no substantial question of law arises in the This is a digitally signed order. The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 21/11/2024 at 12:23:49 present appeal. This Court is also informed that the tax effect in the present case is below the threshold as specified by the Central Board of Direct Tax (CBDT) in the Notification dated 19.09.2024. 8. Accordingly, the present appeal is dismissed. VIBHU BAKHRU, J SWARANA KANTA SHARMA, J NOVEMBER 14, 2024 RK Click here to check corrigendum, if any This is a digitally signed order. The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 21/11/2024 at 12:23:49 "