DCIT, CIRCLE- 2(2)(2), INTL. TAXATION, NEW DELHI V. NATIONAL PETROLEUM CONSTRUCTION COMPANY, NOIDA

ITA 1714/DEL/2018

• Counselvise Citation: [2021] 107 COUNSELVISE.COM (IT) 5221 (ITAT-DELHI)
• Duration Of Justice: 3 year(s) 6 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-09-2021
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: E
• Assessment Year: 2014-2015
• Appeal Filed On: 12-03-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Double taxation relief; Permanent establishment
• Section: 22

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH D, NEW DELHI BEFORE SH. KUL BHARAT, JUDICIAL MEMBER DR. B. R. R. KUMAR, ACCOUNTANT MEMBER (THROUGH VIDEO CONFERENCING) ITA NO. 1714/DEL/2018 : ASSTT. YEAR : 2014-15 DCIT, CIRCLE-2(2)(2), NEW DELHI-110002 VS NATIONAL PETROLEUM CONSTRUCTION COMPANY,C/O NANGIA & CO. LLP, A-109, SECTOR-136, NOIDA (APPELLANT) (RESPONDENT) PAN NO. A A ACN7799J ASSESSEE BY : SH. AMIT ARORA, ADV. REVENUE BY : SH. SUNIL KUMAR, CIT DR DATE OF HEAR ING: 20 . 0 9 .20 2 1 DATE OF PRONOUNCEMENT: 22 .0 9 .20 2 1 ORDER PER DR. B. R. R. KUMAR, ACCOUNTANT MEMBER: THE PRESENT APPEAL HAS BEEN FILED BY THE REVENUE A GAINST THE ORDER OF LD. CIT (A)-43, NEW DELHI DATED 20.12. 2017. 2. FOLLOWING GROUNDS HAVE BEEN RAISED BY THE REVENU E: (I) WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) ERRED IN HOLDING THAT THE PROJECT OFFICE OF THE ASSESSEE IN INDIA IS NOT ITS FIXED PLACE OF BUSINESS AND PERMANENT ESTABLISHMENT AS DEFINED UNDER ARTICLE 5 (2) (C) OF THE DOUBLE TAXAT ION AVOIDANCE AGREEMENT BETWEEN INDIA AND UAE. (II) WHETHER ,ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) ERRED IN HOLDING THAT T HE ACTIVITIES OF PROJECT OFFICE OF THE ASSESSEE WERE PREPARATORY AND AUXILIARY IN NATURE IN TERMS OF T HE ITA NO.1714/DEL/2018 NATIONAL PETROLEUM CONSTRUCTION COMPANY 2 ARTICLE 5 (3) (E) OF THE DOUBLE TAXATION AVOIDANCE AGREEMENT BETWEEN INDIA AND UAE. (III) WHETHER, ON THE FACTS AND IN THE CIRCUMSTANCE S OF THE CASE, THE LD.CIT(A) ERRED IN HOLDING THAT ASSESSEE DID NOT HAVE AN INSTALLATION PERMANENT ESTABLISHMENT UNDER ARTICLE 5 (2) (H) OF THE DOUBLE TAXATION AVOIDANCE AGREEMENT BETWEEN INDIA AND UAE. (IV) WHETHER, ON THE FACTS AND IN THE CIRCUMSTANCE S OF THE CASE, THE LD.CIT (A) ERRED IN HOLDING THAT M /S ARCADIA SHIPPING LTD WAS NOT A DEPENDENT AGENT PERMANENT ESTABLISHMENT OF THE ASSESSEE UNDER ARTIC LE 5 (4) OF THE DOUBLE TAXATION AVOIDANCE AGREEMENT BETWEEN INDIA AND UAE. (V) WHETHER, ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD. CIT (A) ERRED IN HOLDING THAT NO INCOME OF THE ASSESSEE CAN BE ATTRIBUTED TO THE ASSESSEES PERMANENT ESTABLISHMENT IN INDIA. (VI) WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) ERRED IN HOLDING THAT THE PROFITS ATTRIBUTABLE TO THE ASSESSEES PE AT 1.55% OF ITS OFFSHORE SUPPLY SEGMENT AND 17.37% OF ITS ONSHO RE SERVICE SEGMENT, WERE NOT TAXABLE IN INDIA. (VII) WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD. CIT (A) ERRED IN HOLDING THAT INT EREST INCOME RECEIVED FROM INCOME TAX REFUNDS AND FROM DEPOSITS IS LIABLE TO BE TAXED AS PER ARTICLE 11 OF THE DOUBLE TAXATION AVOIDANCE AGREEMENT BETWEEN INDIA AND UAE AND NOT AS PER ARTICLE 7 IN SPITE OF BEING EFFECTIVELY CONNECTED WITH THE PE OF THE ASSESSEE. 3. THE APPEAL OF THE REVENUE MAINLY RELATES TO THE PROVISIONS OF ARTICLE 5(2)(C) WITH REGARD TO TREATING OF PROJE CT OFFICE AS FIXED PLACE PE, THE PREPARATORY AND AUXILIARY FUNCT IONS AS PER ARTICLE 5(3)(E) AND TREATING THE ASSESSEE AS INSTAL LATION PE UNDER ARTICLE 5(2)(H) OF DTAA BETWEEN INDIA AND UAE . ITA NO.1714/DEL/2018 NATIONAL PETROLEUM CONSTRUCTION COMPANY 3 4. AT THE OUTSET, THE COUNSELS BROUGHT TO THE NOTIC E OF THE BENCH THAT THE ISSUE STANDS SQUARELY COVERED BY THE ORDER OF THE HONBLE HIGH COURT OF DELHI FOR THE A.YS. 2007- 08, 2008-09 AND 2009-10 IN ITA NO 143/2013. THE JUDGMENT DEALT WITH FIXED PLACE PE, INSTALLATION PE AND DEPENDENT PE IN THE ASSESSEES OWN CASE REFERRED IN 383 ITR 648 FOR THE A.YS. 2007-08 AND 2008-09 AND THE HONBLE HIGH COURT HELD THAT THE ASSESSEE DID NOT HAVE A PE IN INDIA AND NO INCOME F ROM THE PROJECT IN QUESTION CAN BE CONTRIBUTED TO THE ASSES SEES PE. 5. IN THE ABSENCE OF ANY MATERIAL CHANGE IN THE FAC TS OF THE CASE AND LEGAL PROPOSITION, FOLLOWING THE JUDGMENT OF HONBLE HIGH COURT MENTIONED ABOVE, WE HEREBY DISMISS THE A PPEAL OF THE REVENUE. 6. IN THE RESULT, THE APPEAL OF THE REVENUE IS DISM ISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 22/09/2021. SD/- SD/- (KUL BHARAT) ( DR. B. R. R. KUMAR) JUDICIAL MEMBER ACC OUNTANT MEMBER DATED: 22/09/2021 *SUBODH KUMAR, SR. PS* COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(APPEALS) 5. DR: ITAT ASSISTANT REGISTRAR