M/s. PT. LP Display Indonesia, New Delhi V. DDIT, Noida

ITA 1846/DEL/2014

• Counselvise Citation: [2020] 110 COUNSELVISE.COM (IT) 4489 (ITAT-DELHI)
• Duration Of Justice: 6 year(s) 6 month(s) 22 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-10-2020
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: F
• Assessment Year: 2005-2006
• Appeal Filed On: 28-03-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SATPAL GULATI
• Assessee Lawyers: DEEPAK CHOPDA
• Keywords: Reopening of assessment; Transfer pricing; Double taxation relief; International transaction; Permanent establishment; Right to appeal; Reassessment proceedings; TDS; Set aside
• Section: 5(2); 133A; 201(1); 13; 147; 148

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH D, NEW DELHI , . , ' BEFORE MS. SUSHMA CHOWLA, VP & DR. B.R.R. KUMAR, AM [THROUGH VIDEO CONFERENCING] . / ITA NOS.1845 TO 1847/DEL/2014 /ASSESSMENT YEARS 2004-05 TO 2006-07 PT.LP DISPLAY INDONESIA, C/O-PDS LEGAL, ADVOCATES & SOLICITORS, OFFICE NO.-7, 1 ST FLOOR, ATMARAM MANSION SCINDIA HOUSE, CONNAUGHT PLACE, NEW DELHI-110001. PAN-AACCL2631H .......... /APPELLANT VS THE DDIT [INTERNATIONAL TRANSACTION] SECTOR-24, NOIDA. . / RESPONDENT . / ITA NOS.1887 & 1888/DEL/2014 /ASSESSMENT YEARS 2004-05 & 2005-06 THE DDIT [INTERNATIONAL TRANSACTION] AAYAKAR BHAWAN, 5 TH FLOOR, PLOT NO.A-2D, SECTOR-24, NOIDA. ....... ... /APPELLANT VS PT.LP DISPLAY INDONESIA, C/O-PDS LEGAL, ADVOCATES & SOLICITORS, OFFICE NO.-7, 1 ST FLOOR, ATMARAM MANSION SCINDIA HOUSE, CONNAUGHT PLACE, NEW DELHI-110001. PAN-AACCL2631H . / RESPONDENT . / ITA NOS.1885 & 1886/DEL/2014 /ASSESSMENT YEARS 2005-06 & 2006-07 THE DDIT [INTERNATIONAL TRANSACTION] ROOM NO.506, AAYAKAR BHAWAN, PLOT NO.A-2D, SECTOR-24, NOIDA. ....... ... /APPELLANT VS 2 ITA NO.1845 /DEL/2014 & OTHERS ASSESSMENT YEARS 2004-05 & OTHERS M/S. LG PHILIPS DISPLAY KOREA C.LTD., LG TWIN TOWER, 50 YOID DONG, YOUNGDUNGPO, GU, SEOL-150-606, SOUTH KOREA. PAN-N.A. . / RESPONDENT . /CROSS OBJECTION NOS.40 & 41/DEL/2017 [ . / IN ITA NOS.1885 & 1886/DEL/2014] /ASSESSMENT YEARS 2005-06 & 2006-07 M/S. LG PHILIPS DISPLAY KOREA CO.LTD., LG TWIN TOWER, 50 YOID DONG, YOUNGDUNGPO, GU, SEOL-150-606, SOUTH KOREA. PAN-N.A. .......... /APPELLANT VS THE DDIT [INTERNATIONAL TRANSACTION] ROOM NO.506, AAYAKAR BHAWAN, PLOT NO.A-2D, SECTOR-24, NOIDA. . / RESPONDENT [ . / ITA NOS.1584 & 1585/DEL/2019 /ASSESSMENT YEARS 2007-08 & 2009-10 M/S. LG PHILIPS DISPLAY KOREA CO.LTD., C/O-AZB & PARTNERS, AZB HHOUSE, A-8, SECTOR-4, NOIDA-201304. PAN-AZUPP5353N .......... /APPELLANT VS THE DCIT [INTERNATIONAL TRANSACTION] ROOM NO.312, 3 RD FLOOR, AAYAKAR BHAWAN, PLOT NO.A-2D, SECTOR-24, NOIDA. . / RESPONDENT / APPELLANT BY: SH. DEEPAK CHOPDA, ADV. / RESPONDENT BY: SH. SATPAL GULATI, CIT DR / DATE OF HEARING : 25.08.2020 / DATE OF PRONOUNCEMENT: 20.10.2020 3 ITA NO.1845 /DEL/2014 & OTHERS ASSESSMENT YEARS 2004-05 & OTHERS / ORDER PER SUSHMA CHOWLA, VP OUT OF THIS BUNCH OF APPEALS IN THE CASE OF PT LP. DISPLAY INDONESIA (IN SHORT PT LP INDONESIA) , CROSS-APPEALS ARE FILED BY ASSESSEE AND REVENUE FOR ASSESSMENT YEARS 2004-05 TO 2005-06 AND ASSESSEE IS IN APPEAL RELATING TO ASSESSMENT YEAR 2006-07 AGAINST RESPECTIVE ORDERS P ASSED BY ASSESSING OFFICER DATED 30.01.2014. FURTHER, IN THE CASE OF THE SECOND ASSESSEE, L.G. PHILIPS DISPLAY KOREA CO.LTD. (IN SHORT LG PHILIPS KOREA), REVENUE IS IN APPEAL AGAINST ORDER OF DISPUTE RESOLUTION PANEL (I N SHORT DRP) DATED 02.12.2013 RELATING TO ASSESSMENT YEARS 2005-06 & 2 006-07 AND THE ASSESSEE HAS FILED CROSS-OBJECTIONS AGAINST THE SAME; ASSESS EE HAS ALSO FILED APPEALS AGAINST ORDER OF CIT(A), DATED 30.11.2018 RELATING TO ASSESSMENT YEARS 2007- 08 & 2009-10 RESPECTIVELY. 2. THIS BUNCH OF APPEALS RELATING TO CONNECTED ASSESSE E ON SIMILAR ISSUE WERE HEARD TOGETHER AND ARE BEING DISPOSED OFF BY T HIS CONSOLIDATED ORDER FOR THE SAKE OF CONVENIENCE. IN ORDER TO ADJUDICATE TH E ISSUE, WE TAKE UP THE APPEAL OF THE ASSESSEE, PT LP INDONESIA RELATING T O ASSESSMENT YEAR 2004-05 FIRST. ITA NO.1845/DEL/2014 [ASSESSEES APPEAL] ASSESSMENT YEAR 2004-05 3. THE PRELIMINARY ISSUE WHICH IS RAISED IS AGAINST THE RE-OPENING OF ASSESSMENT U/S 147 OF THE ACT AND WHETHER THE NON-R ESIDENT ENTITIES HAD PERMANENT ESTABLISHMENT (IN SHORT PE) IN INDIA AN D IF THE PE EXISTED WHAT WOULD BE THE INCOME ATTRIBUTABLE TO SUCH ALLEGED PE . 4 ITA NO.1845 /DEL/2014 & OTHERS ASSESSMENT YEARS 2004-05 & OTHERS 4. BRIEFLY IN THE FACTS OF THE CASE, TDS SURVEY U/S 133A OF THE ACT WAS CONDUCTED AT THE PREMISES OF L.G. ELECTRONICS INDIA PVT. LTD. (IN SHORT LGEIL) ON 24.06.2010. L.G.KOREA, THE PARENT COMPANY TRANSACT ED WITH THE INDIAN SUBSIDIARY I.E. LGEIL AND BOTH ASSESSEES BEFORE US ARE GROUP ENTITIES OF L.G. GROUP. THE PURPOSE OF THE SURVEY ON LGEIL WAS TO A SCERTAIN WHETHER TDS COMPLIANCES WERE BEING MADE ON PAYMENTS MADE BY LGE IL TO NON-RESIDENT ASSOCIATED COMPANIES FOR PURCHASE OF RAW-MATERIAL, CAPITAL GOODS ETC. DURING THE COURSE OF SURVEY, STATEMENT OF EMPLOYEES, BOTH INDI AN AND EXPATRIATES WERE RECORDED AND ON THE BASIS OF THE SAID STATEMENT, RE VENUE CONCLUDED THAT THE NON-RESIDENT COMPANIES INCLUDING THE PARENT COMPANY I.E. L.G.KOREA HAD A PE IN THE FORM OF LGEIL. CONSEQUENT THERETO, RE-ASSESSME NT NOTICES UNDER SECTION 148 OF THE ACT WERE ISSUED TO NON-RESIDENT GROUP COMPAN Y FOR VARIOUS ASSESSMENT YEARS. THE ALLEGATION OF THE ASSESSING OFFICER WAS THAT L.G. KOREA AND ITS ASSOCIATED ENTERPRISES (IN SHORT AES) INCLUDING P T LP INDONESIA HAD BUSINESS CONNECTION AS PER SECTION 9(1)(I) OF THE ACT WITH L GEIL; AND THE ASSESSEE WAS CARRYING ON BUSINESS WITH LGEIL THROUGH FIXED PLAC E OF BUSINESS AS PER ARTICLE 5(1) OF THE INDIA INDONESIA TREATY. THE ASSESSING OFFICER FURTHER NOTED THAT THE ASSESSEE I.E. PTLP INDONESIA WAS FOREIGN COMPANY AN D HAD NOT FILED ANY RETURN OF INCOME FOR THE YEAR UNDER CONSIDERATION. THE DETAI LS OF TRANSACTIONS AS PER FORM NO.3CEB OF LGEIL WERE REFERRED I.E. EXPORT OF RAW M ATERIAL AND FINISHED GOODS AND IT WAS ESTABLISHED THAT THE ASSESSEE HAD BUSINE SS CONNECTION AS WELL AS PE IN INDIA. THE ASSESSING OFFICER RECORDED REASONS FOR RE-OPENING THE ASSESSMENT U/S 147 OF THE ACT, AS ACCORDING TO HIM INCOME HAD ESCA PED ASSESSMENT. THE REASONS RECORDED FOR RE-OPENING OF ASSESSMENT ARE R EPRODUCED IN THE ASSESSMENT 5 ITA NO.1845 /DEL/2014 & OTHERS ASSESSMENT YEARS 2004-05 & OTHERS ORDER, WHICH ARE BEING REFERRED, BUT NOT BEING REP RODUCED FOR THE SAKE OF BREVITY. STATEMENT OF VARIOUS EMPLOYEES WERE RECORDED DURING SURVEY, WHICH WERE REFERRED BY THE ASSESSING OFFICER TO COME TO A FINDING THAT THE ASSESSEE HAD BOTH BUSINESS CONNECTION AND PE IN INDIA. THE ASSESSEE DID NOT COMPLY BY FILING ANY RETURN OF INCOME. VARIOUS NOTICES IN THIS REGARD WERE ISSUED TO THE ASSESSEE AND THEN RETURN OF INCOME WAS FILED ON 08.11.2011. THE ASSE SSEE SOUGHT COPY OF REASONS RECORDED FOR RE-OPENING THE ASSESSMENT, WHICH WERE SUPPLIED TO THE ASSESSEE AND OBJECTIONS WERE FILED AGAINST THE INITIATION OF RE- ASSESSMENT PROCEEDINGS. THE SAME WERE DISPOSED OFF BY THE ASSESSING OFFICER VID E ORDER DATED 19.11.2012. RELYING ON THE DECISION OF HONBLE SUPREME COURT IN CIT VS. RAJESH JHAVERI STOCK BROKERS PVT. LTD., 291 ITR 500 (SC) AND OTHER DECISIONS, THE ASSESSING OFFICER OBSERVED THAT AT THE TIME OF ISSUE OF NOTICE U/S 14 8 OF THE ACT, THE ASSESSING OFFICER IS NOT REQUIRED TO ESTABLISH THAT THERE IS ESCAPEMENT OF INCOME; MERE BONAFIDE REASONS TO BELIEVE THAT THERE IS ESCAPEMEN T OF INCOME IS SUFFICIENT FOR ISSUE OF NOTICE U/S 148 OF THE ACT. THE OBJECTION OF THE ASSESSEE, ON THE OTHER HAND, WAS THAT THE REASONS DO NOT REFLECT ANY TENAB LE OR SUSTAINABLE BASIS FOR CONCLUDING THAT ANY INCOME CHARGEABLE TO TAX HAD E SCAPED ASSESSMENT IN THE HANDS OF THE ASSESSEE. THE ASSESSING OFFICER WAS O F THE VIEW THAT THE CONDITIONS FOR ASSUMING JURISDICTION U/S 147 OF THE ACT ARE FU LLY SATISFIED AND THE INITIATION OF RE-ASSESSMENT PROCEEDINGS IN THE CASE U/S 148 OF THE ACT WAS LAWFUL. THE ASSESSING OFFICER ALSO OBSERVED THAT THE JURISDICTI ON OF PERSONS BEING NON- RESIDENT INCLUDING FOREIGN COMPANIES WAS BASED ON H AVING PE OR HAVING BUSINESS CONNECTION OR HAVING ANY SOURCE OF INCOME ACCRUING OR ARISING OR DEEMED TO BE ACCRUING OR ARISING IN THE AREAS WITHIN INDIAN TERR ITORIES. HE CONCLUDED BY STATING 6 ITA NO.1845 /DEL/2014 & OTHERS ASSESSMENT YEARS 2004-05 & OTHERS THAT THE SURVEY PROCEEDINGS HAD ESTABLISHED BUSINES S CONNECTION AND PE OF PT LP INDONESIA. FURTHER, IT WAS OBSERVED THAT THE EXPAT RIATE EMPLOYEES OF L.G. PHILIPS KOREA, THE OTHER ASSESSEE BEFORE US, NOT ONLY REPR ESENTED LG.KOREA, BUT ALSO WORKED FOR ITS OTHER AFFILIATES AND SUBSIDIARIES. AS FAR AS PTLP INDONESIA WAS CONCERNED, IT WAS ALSO HELD THAT IT HAD FIXED PLACE OF BUSINESS IN THE OFFICE OF LGEIL. THE EXPATRIATES WORKING IN INDIA WERE EMPLO YEES OF PARENT COMPANY OF PT LP INDONESIA AND ALSO AT TIMES, EMPLOYEES OF NON-RE SIDENT COMPANY PT LP INDONESIA. IT WAS ALSO THE RESPONSIBILITY OF EXPAT RIATE EMPLOYEES NOT ONLY TO LOOK AFTER THE INTEREST OF PARENT COMPANY BUT AS WELL A S OTHER SUBSIDIARIES. THE ASSESSING OFFICER CONCLUDED BY HOLDING THAT MERELY HAVING SEPARATE LEGAL CORPORATE ENTITY WOULD NOT PREVENT THE SUBSIDIARY F ROM BEING THE PE OF THE ESTABLISHMENT IF OTHER CONDITIONS OF ARTICLE 5 ARE BEING MET. THE OBJECTIONS OF THE ASSESSEE TO THE REASONS RECORDED WITH REGARD TO IT [PTLP INDONESIA] HAVING BUSINESS CONNECTION IN INDIA IN TERMS OF SECTION 9( 1)(I) OF THE ACT WERE HELD TO BE MISCONCEIVED, IRRELEVANT AND IMMATERIAL. 5. THE ASSESSING OFFICER WAS OF THE VIEW THAT FROM THE FACTS AND MATERIAL AVAILABLE ON RECORD, THERE WAS REAL AND INTIMATE BU SINESS CONNECTION AS PER SECTION 9(1)(I) OF THE ACT AS THERE WAS CONTINUITY OF BUSINESS BETWEEN INDIAN BUSINESS AND ITS AES. THE NON-RESIDENT COMPANIES W ERE DOING BUSINESS IN INDIA THROUGH THE EMPLOYEES OF THE PARENT COMPANY, WHO WERE HEADING VARIOUS DIVISIONS IN THE INDIAN COMPANIES AND ALSO THROUGH EMPLOYEES VISITING INDIA REGULARLY. THE ASSESSING OFFICER HELD THAT THERE W AS CLOSE BUSINESS CONNECTION IN TERMS OF DEPENDENTS OF INDIAN COMPANIES ON THE N ON-RESIDENT COMPANIES FOR ALL IMPORTS, AS IT COULD NOT IMPORT RAW MATERIAL FR OM ANY OTHER CONCERN, OTHER 7 ITA NO.1845 /DEL/2014 & OTHERS ASSESSMENT YEARS 2004-05 & OTHERS THAN L.G. AFFILIATES. THE ORDER OF PURCHASE OF RAW MATERIAL WAS PLACED FROM INDIA IN A GLOBAL PORTAL PROVIDED BY L.G.KOREA. TH E ASSESSING OFFICER WAS OF THE VIEW THAT THE TRANSACTION BETWEEN INDIA AND OTHER NON-RESIDENT COMPANIES WERE ALSO LINKED AS THE INDIAN COMPANY WAS DEPENDE NT UPON SUPPORT OF SUPPLIES BY THE NON-RESIDENT ENTITIES. THE CONTENT ION OF THE ASSESSEE THAT THERE WAS NO BUSINESS CONNECTION WAS NOT ACCEPTED. THE A SSESSING OFFICER THUS HELD THAT L.G.KOREA AND ITS AE, I.E. THE ASSESSEE HAD A BUSINESS CONNECTION U/S 9(1)(I) OF THE ACT. 6. NEXT PLANK OF THE DECISION WAS ON THE CONCEPT OF FI XED PLACE OF BUSINESS UNDER ARTICLE 5(1) OF DTAA BETWEEN INDIA AND INDONESIA. AS THE ASSESSEE I.E. PTLP INDONESIA WAS SUBSIDIARY OF L.G.KOREA AND THE EXPATRIATE EMPLOYEES OF L.G.KOREA WERE WORKING IN INDIA, IT WAS OBSERVED BY THE ASSE SSING OFFICER THAT THE ASSESSEE NOT ONLY REPRESENTED L.G.KOREA BUT ALSO WORKED FOR ITS OTHER AFFILIATES AND SUBSIDIARIES. IT WAS THUS OBSERVED THAT THE ASSESSEE HAD A FIXED PLACE OF BUSINESS IN THE OFFICE OF LGEIL. THE PLEA OF THE ASSESSEE REGARDING ATTRIBUTION OF NIL PROFITS TO THE PE WAS ON THE GROUND THAT INTERNATIONAL TRANSACTIONS WERE HELD TO BE AT ARMS LENGTH PRICE (IN SHORT AL P) BY THE TPO IN HIS ORDER DATED 30.10.2008 AND THEREFORE, NO ADJUSTMENT IS TO BE MADE. IN TH IS REGARD, RELIANCE WAS PLACED ON ARTICLE 7(2) OF THE INDO INDONESIA DTAA AND CIRCULAR NO.5 DATED 28.09.2004 ISSUED BY THE CBDT AND THE JUDGEMENT OF THE HONBLE SUPREME COURT IN DIT , INTERNATIONAL TAXATION VS MORGAN STANLEY & CO.INC [2007] 292 ITR 416 (SC ) WHICH STIPULATES THAT ARTICLE 7(2) OF THE INDO-US DTAA, WHICH IS SIMILAR TO ARTICLE 7 OF INDO-INDONESIA DTA A. THE ASSESSING OFFICER IN THIS REGARD NOTED THAT CERTAIN TRANSFER PRICING ADJ USTMENTS WERE MADE AND 8 ITA NO.1845 /DEL/2014 & OTHERS ASSESSMENT YEARS 2004-05 & OTHERS HENCE THE SUBMISSIONS OF THE ASSESSEE THAT NO TRANS FER PRICING ADJUSTMENTS HAVE BEEN MADE, WAS NOT CORRECT. IT WAS REITERATED BY THE ASSESSING OFFICER THAT THE SURVEY PROCEEDINGS U/S 133A OF THE ACT AND STATEMENT OF EXPATRIATES RECORDED ON OATH HAD BROUGHT OUT FACTS THAT LGEIL WAS FUNCTIONING AS PE OF PTLP INDONESIA AND HENCE, THERE WAS NEED FOR FURTHE R ATTRIBUTION OF PROFITS TO THE PE FOR FUNCTIONS AND SERVICES PROVIDED. THE AS SESSING OFFICER FURTHER NOTES THAT DESPITE GIVING ADEQUATE OPPORTUNITIES TO THE A SSESSEE, IT HAD FAILED TO PROVIDE COPIES OF BOOKS OF ACCOUNTS, BALANCE SHEET AND P&L A/C FOR THE RELEVANT FINANCIAL YEAR AND STATEMENT OF COMPUTATI ON OF INCOME; HENCE, THE ASSESSMENT WAS COMPLETED BASED ON THE MATERIAL AVA ILABLE ON RECORD. THE ASSESSEE HAD BUSINESS CONNECTION U/S 9(1)(I) OF THE ACT AND PE UNDER ARTICLE 5(1) & 5(2) OF DTAA BETWEEN INDIA AND INDONESIA; T HE TRANSACTION AMOUNTING TO RS.37,85,15,641/- FOR IMPORTS WERE HELD TO BE T AXABLE IN INDIA. THE ASSESSING OFFICER PASSED THE DRAFT ASSESSMENT ORDER . 7. THE ASSESSEE FILED OBJECTIONS BEFORE THE DRP, WH O IN TURN ISSUED CONSOLIDATED DIRECTIONS FOR ASSESSMENT YEARS 2004-0 5 TO 2006-07. WITH REGARD TO THE PLEA OF THE ASSESSEE THAT IT DID NOT HAVE AN Y OF ITS EMPLOYEES IN INDIA, THE DRP HELD THAT IT WAS NOT NECESSARY THAT EMPLOYEES O F ASSESSEE SHOULD COME TO INDIA SO AS TO CONSTITUTE FIXED PLACE OF PE. THE D RP FURTHER DIRECTED THAT ATTRIBUTION RATE OF PROFITS TO PE SHOULD BE REDUCE D TO 30%. FINAL ASSESSMENT ORDER WAS PASSED BY APPLYING PROFIT RATE OF 25% TO THE GLOBAL ACCOUNT OF THE ASSESSEE AND ADDITION OF RS.9,47,21,910/- WAS MADE IN THE HANDS OF THE ASSESSEE. 9 ITA NO.1845 /DEL/2014 & OTHERS ASSESSMENT YEARS 2004-05 & OTHERS 8. BOTH THE ASSESSEE AND REVENUE ARE IN APPEAL BEFO RE US FOR ASSESSMENT YEARS 2004-05 AND 2005-06 AND THE ASSESSEE IS IN A PPEAL FOR ASSESSMENT YEAR 2006-07 ALSO. IN THE CASE OF L.G. PHILIPS KOREA FO R ASSESSMENT YEARS 2005-06 & 2006-07, THE ASSESSING OFFICER/DRP DECIDED THE IS SUE OF PE AGAINST THE ASSESSEE, FOLLOWING THE SAME PARITY OF REASONING AS IN THE CASE OF PT LP INDONESIA AND ALSO AS THE ATTRIBUTION RATE OF PE WA S REDUCED TO 30%. REVENUE IS IN APPEAL ON THE ISSUE OF RATE OF ATTRIBUTION OF PROFITS AND ASSESSEE HAS FILED CROSS OBJECTION ON THE ISSUE OF EXISTENCE OF PE AND ALSO ON RE-OPENING OF THE ASSESSMENT U/S 147 OF THE ACT. FURTHER, THE CIT(A) WHILE DECIDING THE APPEALS FOR ASSESSMENT YEARS 2007-08 & 2009-10, DISMISSED T HE APPEALS OF THE ASSESSEE ON THE TECHNICAL GROUND THAT THE PAN QUOTE D IN THE MEMO OF APPEAL WAS NOT THAT OF ASSESSEE BUT OF AUTHORIZED SIGNATO RY. THE ASSESSEE IS IN APPEAL BEFORE US AGAINST THE ORDER OF CIT(A) IN ASS ESSMENT YEARS 2007-08 & 2009-10. 9. THE LD.AR FOR THE ASSESSEE POINTED OUT THAT THE PRESENT APPEALS ARE FILED IN THE CASE OF PTLP INDONESIA RELATING TO ASSESSMEN T YEARS 2004-05 TO 2006-07 ON SIMILAR ISSUES. HE CHALLENGED THE REASSESSMENT PROCEEDINGS AS COMPLETED U/S 147/148 OF THE ACT AND RAISED THE ISSUE AS TO W HETHER SUCH REASSESSMENT PROCEEDINGS COULD BE INITIATED AGAINST THE NON-RESI DENT ENTITIES, WHERE THERE WAS NO TRANSACTION BETWEEN THE SELECTED NON-RESIDEN T ENTITIES AND LGEIL THOUGH THE POINTED OUT THAT THERE WERE CERTAIN TRAN SACTIONS BETWEEN L.G. KOREA , THE PARENT COMPANY AND LGEIL. IN RESPECT OF L.G. PH ILIPS KOREA, IT WAS POINTED OUT THAT THE ISSUE RAISED BY WAY OF CROSS-OBJECTION IS ALSO AGAINST THE RE- ASSESSMENT PROCEEDINGS INITIATED U/S 147/148 OF THE ACT. 10 ITA NO.1845 /DEL/2014 & OTHERS ASSESSMENT YEARS 2004-05 & OTHERS 10. THE LD.AR FOR THE ASSESSEE POINTED OUT ON FIRST ANALYSIS, L.G.KOREA HAS BEEN HELD TO HAVE PE IN INDIA IN LGEIL. HE FURTHER POINTED OUT THAT TPO PASSED THE ORDER IN CASE OF LGEIL FOR ALL THE RESPE CTIVE YEARS, WHICH ARE PLACED AT SL.NOS. 11 TO 15 OF THE PAPERBOOK WHEREIN INTER NATIONAL TRANSACTIONS WERE HELD TO BE AT ARM'S LENGTH PRICE. HE THEN DREW OUR ATTENTION TO THE ORDER OF HONBLE SUPREME COURT WITH LEAD ORDER IN CIVIL APPE AL NO(S) 781 OF 2018 IN THE CASE OF L.G.GROUP COMPANIES, JUDGEMENT DATED 16.01. 2018 UNDER WHICH ALL THE SLPS FILED BY THE AES INCLUDING THE SLP FILED B Y THE ASSESSEE FOR ASSESSMENT YEAR 2007-08 WERE ALLOWED, ON THE BASIS OF FINDING OF THE DRP THAT THE AES DO NOT HAVE PE IN INDIA. THE HONBLE SUPRE ME COURT ALLOWED L.G.KOREA TO WITHDRAW ITS SLP. THE COPIES OF THE S AID ORDERS ARE PLACED AT PAGES 12 TO 18 OF THE CONVENIENT PAPERBOOK. OUR AT TENTION WAS DRAWN TO THE JUDGEMENT OF THE HONBLE SUPREME COURT IN THE PRINC IPAL OFFICER, HONDA ACCESS ASIA AND OCEANIA CO.LTD. VS ADIT, NOIDA & OR S. AND OTHER CONNECTED MATTERS IN C.A.NO.19659/2017, JUDGEMENT DATED 23.11 .2017 UNDER WHICH THE CASE OF HONDA MOTORS CO.LTD. AND ALSO LGEIL WAS DEC IDED ON THE BASIS THAT ONCE THE DRP HAS FOUND THAT THERE IS NO PE IN INDIA , THEN THE RE-ASSESSMENT PROCEEDINGS NEED TO BE WITHDRAWN. VIDE LEAD ORDER I N SLP (C) NO(S).24455/2014 AND OTHER CONNECTED SLPS, JUDGEMEN T DATED 16.01.2018, FOLLOWING THE EARLIER ORDER IN HONDA ACCESS ASIA AN D OCEANIC CO.(SUPRA), AS DRP IN PRESENT APPEALS HAD FOUND THAT THERE IS NO P E INDIA, CONSEQUENTLY THE REASSESSMENT PROCEEDINGS WERE DROPPED . IN THE SAID BUNCH OF APPEALS, ONE OF THE PETITION M/S L. G. KOREA CO. LTD . MADE A PRAYER FOR PERMISSION TO WITHDRAW SLP AND PURSUE THE STATUTORY REMEDY UNDER THE 11 ITA NO.1845 /DEL/2014 & OTHERS ASSESSMENT YEARS 2004-05 & OTHERS INCOME TAX ACT AND THE SAME WAS ALLOWED. THE LD.AR FOR THE ASSESSEE FURTHER PLACED RELIANCE ON THE DECISION OF HONBLE SUPREME COURT IN HONDA MOTORS CO. LTD. VS ADIT IN CIVIL APPEAL NOS.2833 TO 2840 OF 20 18, JUDGEMENT DATED 14.03.2018, REPORTED IN [2018] 92 TAXMANN.COM 353 ( SC) FOR THE PROPOSITION THAT ONCE THE INTERNATIONAL TRANSACTIONS WERE HELD TO BE AT ARMS LENGTH PRICE, EVEN IF THERE WAS PE IN INDIA, NO PROFIT COULD BE A TTRIBUTED TO IT. THUS, REASSESSMENT PROCEEDINGS INITIATED ON THE ALLEGATIO N THAT THE ASSESSEE HAS PE IN INDIA WERE QUASHED BY THE HONBLE SUPREME COURT ON THE GROUND THAT THE NOTICE FOR REASSESSMENT COULD NOT BE SUSTAINED, ONC E ARMS LENGTH PRICE PROCEDURE HAD BEEN FOLLOWED. THE SAID ORDER IS PLAC ED AT PAGES 19 TO 20 OF THE CONVENIENCE PAPERBOOK. THE LD.AR FOR THE ASSESSEE FURTHER PLACED RELIANCE ON THE DECISION OF HONBLE SUPREME COURT IN ADIT VS HO NDA MOTORS CO.LTD. (SUPRA) [2019] 108 TAXMANN.COM 300 (SC), JUDGEMENT DATED 18.07.2019 FOR THE PROPOSITION THAT ONCE ARMS LENGTH PRINCIPLE HAS BE EN FOLLOWED, THERE CAN BE NO FURTHER PROFIT ATTRIBUTABLE TO PERSON EVEN IF IT H AS PE IN INDIA. IT WAS THUS HELD THAT RE-ASSESSMENT NOTICE ISSUED TO ASSESSEE ON THE ALLEGATION THAT IT HAD PE IN INDIA, CONSIDERING THE FACTS THAT ARMS LENGTH PRIC E PROCEDURE WAS FOLLOWED, THE HONBLE SUPREME COURT HELD THAT THE NOTICE COULD NO T BE SUSTAINED. THE REVENUE FILED REVIEW PETITION AGAINST THE SAID ORDE R OF THE HONBLE SUPREME COURT WHICH WAS DISMISSED ON THE GROUND THAT THERE WAS NO ERROR APPARENT ON FACE OF RECORD WARRANTING RE-CONSIDERATION OF THE O RDER PASSED. 11. THE LD.DR FOR THE REVENUE IN REPLY STATED THAT IN THE CASE OF LGEIL, IT HAS BEEN HELD THAT OTHER THAN L.G.KOREA, NO OTHER A FFILIATES HAD PE IN INDIA; HENCE NO NEED TO DEDUCT TAX AT SOURCE. HE THEN REF ERRED TO THE DECISION OF 12 ITA NO.1845 /DEL/2014 & OTHERS ASSESSMENT YEARS 2004-05 & OTHERS DELHI TRIBUNAL IN GE ENERGY PARTS INC. VS ADIT IN I TA NO.671/DEL/2011 ORDER DATED 27.01.2017 COPY OF WHICH IS FILED, WHICH TALKS OF GROUP PE. AS FAR AS PT.LP DISPLAY INDONESIA IS CONCERNED, HE STATED THA T NO EXPATRIATE PERSONNEL WERE IN INDIA. ADMITTEDLY, NO EXPATRIATES/PERSONNE L OF THE SAID ENTITIES WERE BASED IN INDIA. HOWEVER, IN THE CASE OF GE ENERGY PARTS INC. VS ADIT (SUPRA) ALSO, IT IS HELD THAT IT IS NOT CRITICAL THAT EXPAT RIATES FROM EACH COUNTRY SHOULD BE IN INDIA. THE LD.DR FOR THE REVENUE STRESSED TH AT ON ACCOUNT OF CONTRIBUTION BY VARIOUS ENTITIES, GOODWILL OF BUSIN ESS WAS ACHIEVED BY THE ROLE OF SECONDMENT EMPLOYEES HENCE, PAYMENT OF ROYALTY. THE LD.DR FOR THE REVENUE PLACED RELIANCE ON THE ORDERS OF THE AUTHOR ITIES BELOW. 12. THE LD.AR FOR THE ASSESSEE IN HIS RE-JOINDER ST ATED THAT THE FIRST ISSUE TO BE DECIDED IS INITIATION OF REASSESSMENT PROCEEDING S U/S 147 OF THE ACT AND IN THE ABSENCE OF ANY TRANSACTION, THERE IS NO QUESTIO N OF ASSESSMENT IN THE HANDS OF THE ASSESSEE FOR NON-RESIDENT ENTITIES. H E FURTHER PLACED STRONG RELIANCE ON THE ORDERS OF THE HONBLE SUPREME COURT (SUPRA) WHEREIN IT WAS HELD THAT IF INTERNATIONAL TRANSACTION WAS FOUND TO BE AT ARMS LENGTH, THEN THE ENTIRE QUESTION OF PE BECOMES ACADEMIC AND REASSESS MENT NOTICE CANNOT BE SUSTAINED. IN THE CASE OF L.G. PHILIPS KOREA, THE ASSESSEE HAS FILED CROSS- OBJECTION FOR AYS 2005-06 & 2006-07 AND GROUND OF A PPEAL NO.2 OF THE CROSS- OBJECTION ARE PRESSED BY THE ASSESSEE. 13. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE RECORD. THE ISSUE ARISING IN THE BUNCH OF APPEALS IS AGAINST THE INIT IATION OF RE-ASSESSMENT PROCEEDINGS U/S 147/148 OF THE ACT AGAINST THE A SSESSEE. ALL THE ASSESSEES 13 ITA NO.1845 /DEL/2014 & OTHERS ASSESSMENT YEARS 2004-05 & OTHERS BEFORE US ARE NON-RESIDENT ENTITIES WHICH ARE ASSOC IATED CONCERNS OF L.G.KOREA. IT HAS BEEN HELD THAT L.G.KOREA HAS A PE IN INDIA I N LGEIL BY THE REVENUE AUTHORITIES, WHICH IS UNDER CHALLENGE. THE CASE OF THE REVENUE IS THAT ALL OTHER ASSOCIATED CONCERNS OF THE L.G.KOREA GROUP, WHICH ARE NON-RESIDENT ENTITIES, ALSO HAVE CONNECTION IN THE BUSINESS MODULE OF PURC HASE OF RAW MATERIALS, CAPITAL GOODS, ETC. AND HENCE THERE IS PE IN INDIA , THOUGH NO INCOME WAS ASSESSED IN THE HANDS OF THE RESPECTIVE PES. REASS ESSMENT PROCEEDINGS WERE INITIATED U/S 147/148 OF THE ACT CONSEQUENT TO TDS SURVEY U/S 133A OF THE ACT IN THE CASE OF LGEIL AND HONDA MOTORS CO. LTD.(SUPR A). HOWEVER, BEFORE REFERRING TO THE SAID PROCEEDINGS, WE REFER TO JUDG EMENT OF THE HONBLE SUPREME COURT IN THE PRINCIPAL OFFICER, HONDA ACCESS ASIA A ND OCEANIA CO.LTD. VS ADIT, NOIDA & ORS. AND OTHER CONNECTED MATTERS IN C.A.NO. 19659/2017, JUDGEMENT DATED 23.11.2017 WHEREIN IT WAS HELD AS UNDER:- LEAVE GRANTED. IN VIEW OF THE FACT THAT THE DISPUTE RESOLUTION PAN EL HAS FOUND THAT THERE IS NO PERMANENT ESTABLISHMENT IN INDIA, THE JUDGEMENT OF THE HIGH COURT IS SET ASIDE AND THE APPEALS ARE ALLOWED ACCORDINGLY. 14. THIS PROPOSITION WAS ALSO FOLLOWED IN THE CIVIL APPEAL NO(S). 781 OF 2018 & ORS. IN THE CASE OF L.G. GROUP COMPANIES, JUDGEME NT DATED 16.01.2018 UNDER WHICH ALL THE SLPS FILED BY THE AES INCLUDING THE SLP FILED BY THE ASSESSEE FOR ASSESSMENT YEAR 2007-08 WERE ALLOWED, ON THE BASIS OF FINDING OF THE DRP THAT THE AES DO NOT HAVE PE IN INDIA. IT W AS NOTED BY THE HONBLE APEX COURT THAT WHERE THE DRP HAS FOUND THAT THERE IS NO PE IN INDIA, CONSEQUENTLY THE ASSESSING OFFICER WAS DIRECTED TO PASS ORDERS DROPPING THE 14 ITA NO.1845 /DEL/2014 & OTHERS ASSESSMENT YEARS 2004-05 & OTHERS PROCEEDINGS. HENCE, BUNCH OF APPEALS WERE ALLOWED BY THE HONBLE SUPREME COURT (SUPRA). 15. CONSEQUENT THERETO, VIDE LEAD ORDER IN SLP IN ( C) NO(S).24455/2014 AND OTHER CONNECTED SLPS, JUDGEMENT DATED 16.01.2018, I T WAS HELD AS UNDER:- 5. IN THE AFORESAID MATTERS, THE DISPUTE RESOLUTIO N PANEL (DRP) HAS FOUND THAT THERE IS NO PERMANENT ESTABLISHMENT (PE) IN INDIA. CONSEQUENTLY, THE ASSESSING OFFICER HAS PASSED ORDE RS DROPPING THE PROCEEDINGS. ACCORDINGLY, WE PASS THE SAME ORDER A S WAS PASSED IN C.A.NO.19659/2017 (THE PRINCIPAL OFFICER, HONDA ACC ESS ASIA AND OCEANIA CO.LTD. VS ASST. DIRECTOR OF INCOME TAX, NO IDA & ORS.) AND OTHER CONNECTED MATTERS ON 23.11.2017, VIZ. LEAVE GRANTED. IN VIEW OF THE FACT THAT THE DISPUTE RESOLUTION PAN EL HAS FOUND THAT THERE IS NO PERMANENT ESTABLISHMENT IN INDIA, THE J UDGMENT OF THE HIGH COURT IS SET ASIDE AND THE APPEALS ARE ALLOWED ACCORDINGLY. 6. ORDERED ACCORDINGLY. 16. THE HONBLE SUPREME COURT ALLOWED L.G.KOREA TO WITHDRAW ITS SLP. THE COPY OF THE SAID ORDER IS PLACED AT PAGES 12 TO 18 OF THE CONVENIENT PAPERBOOK. 17. NOW COMING TO THE FACTS OF THE PRESENT CASE ON THE BASIS OF FINDINGS IN THE CASE OF LGEIL, RE-ASSESSMENT PROCEEDINGS U/S 14 7/148 OF THE ACT HAVE BEEN INITIATED AGAINST THE ASSESSEE ON THE GROUND T HAT ALL THE AES OF THE L.G.KOREA HAS PE IN INDIA IN LGEIL. THE PLEA OF TH E ASSESSEE THAT IT DID NOT SEND ANY OF ITS EMPLOYEES ON SECONDMENT TO LGEIL FO R THE YEARS UNDER CONSIDERATION HAS NOT BEEN ACCEPTED. FOR ALL RELEVA NT ASSESSMENT YEARS, THE TRANSACTION BETWEEN THE ASSESSEE AND LGEIL, HAS BEE N FOUND TO BE AT ARMS LENGTH BY THE TPO, WAS NOT ACCEPTED BY THE ASSESSIN G OFFICER IN THE DRAFT ASSESSMENT ORDER. THE DRP ALSO ISSUED DIRECTIONS F OR ASSESSMENT YEARS 2004- 15 ITA NO.1845 /DEL/2014 & OTHERS ASSESSMENT YEARS 2004-05 & OTHERS 05 TO 2006-07 HOLDING THAT THE ASSESSEE HAD PE IN I NDIA. FINAL ASSESSMENT ORDER HAS BEEN PASSED IN TERMS OF THE DIRECTIONS OF THE DRP AND CONSEQUENT APPEALS PLACED BEFORE US. 18. THE CASE OF THE ASSESSEE IS THAT WHERE THE TRAN SACTIONS BETWEEN THE ASSESSEE AND LGIEL HAS BEEN FOUND TO BE AT ARMS L ENGTH BY THE TPO THEN THERE CANNOT BE FURTHER PROFIT ATTRIBUTION TO A PER SON EVEN IF IT HAS PE IN INDIA. IN THIS REGARD, WE MAY REFER TO TWO PROCEEDINGS; WH EREIN ONE IS PROCEEDINGS TAKEN UP BY THE LGEIL WHICH CHALLENGE THE ORDER PAS SED U/S 201(1) OF THE ACT BEFORE THE CIT(A), WHO PASSED CONSOLIDATED ORDER DA TED 04.09.2018 FOR ASSESSMENT YEAR 2005-06 TO 2010-11 HOLDING THAT NON E OF THE AES APART FROM L.G.KOREA HAD PE IN INDIA. THE SAID ORDER HAS NOT BEEN APPEALED AGAINST THE DEPARTMENT AND HENCE THE FINDINGS HAD BECOME ABSOLU TE. IN THESE CIRCUMSTANCES, CONSEQUENT FALL OUT IS THE CASE OF T HE ASSESSEE, WHICH IN TURN WERE RE-OPENED U/S 147 OF THE ACT CONSEQUENT TO SUR VEY U/S 133A OF THE ACT ON LGEIL. THE BASIS FOR INITIATION OF RE-ASSESSMENT P ROCEEDINGS FALLS AS IN THE HANDS OF LGEIL BY THE ORDER DATED 04.09.2018, THE C IT(A) HAS GIVEN A FINDING THAT NONE OF THE AES APART FROM L.G.KOREA HAD PE I N INDIA FOR ASSESSMENT YEARS 2005-06 TO 2010-11. COPY OF THE SAID ORDER I S PLACED AT PAGES 39 TO 105 OF THE CONVENIENCE PAPERBOOK. IN THESE CIRCUMSTANC ES AND APPLYING THE RATIO LAID DOWN BY THE HONBLE SUPREME COURT IN L.G.GROUP OF COMPANIES DATED 16.01.2018 & HONDA MOTORS CO.LTD.(SUPRA) DATED 14.0 3.2018, WHEREIN IT HAS BEEN HELD THAT SINCE, THE DRP HAS GIVEN THE FINDING THAT THE AES OF LGEIL I.E. ASSESSEE BEFORE US DO NOT HAVE PE IN INDIA; THE BAS IS FOR INITIATING THE RE- ASSESSMENT PROCEEDINGS FAIL AND THE SAME ARE HELD T O BE INFRUCTUOUS. 16 ITA NO.1845 /DEL/2014 & OTHERS ASSESSMENT YEARS 2004-05 & OTHERS 19. WE MAY FURTHER REFER TO THE ORDER OF DRP RELAT ING TO ASSESSMENT YEAR 2007-08 DATED 11.12.2015 WHEREIN IT HAS BEEN HELD A S UNDER:- 9.1. .THE CONTENTION OF THE ASSESSEE IS THAT N ONE OF THE EXPATRIATE CAME TO INDIA FROM ASSESSEES COMPANY ON SECONDMENT BASIS TO WORK IN LG INDIA. FURTHER, NO PERSONNEL FROM ASSES SEES COMPANY CAME TO LG INDIA ON SHORT TERM OR LONG TERM BASIS FOR PR OVIDING ANY TECHNICAL SERVICES. DURING THE COURSE OF SURVEY PROCEEDINGS CARRIED OUT IN PREMISES OF LG INDIA ON 24.06.2010, THE ASSESSING OFFICER RE CORDED STATEMENTS OF CERTAIN EXPATRIATES EMPLOYEES WHO HAD COME FROM L.G .KOREA TO WORK ON SECONDMENT BASIS WITH L.G.INDIA. ON BASIS OF THESE STATEMENTS, THE ASSESSING OFFICER HAS OBSERVED THAT THERE EXISTED PE IN INDIA FOR LG KOREA AND ITS OTHER GROUP COMPANIES. THE ASSESSING OFFIC ER HAS NOT SPECIFIED HOW PRESENCE OF EXPATRIATE EMPLOYEES OF LG KOREA IN INDIA CAN LEAD TO PE IN INDIA OF ALL GROUP COMPANIES OF L G KOREA INCLUD ING ASSESSEE. 9.2. DRP HAS DULY GONE THROUGH VARIOUS STATEMENTS O F EXPATRIATES, EXCERPTS FROM WHICH HAVE BEEN REPRODUCED BY THE ASS ESSING OFFICER IN DRAFT ASSESSMENT ORDER. IT IS SEEN THAT IT IS NOT THE CASE OF THE ASSESSING OFFICER THAT ANY EXPATRIATE EMPLOYEE FROM THE ASSES SEE COMPANY HAS COME TO INDIA TO WORK WITH LG INDIA ON SECONDMENT BASIS. NONE OF THE EXPATRIATE EMPLOYEE IN HIS STATEMENT HAS SAID THAT HE HAS COME FROM LG INDONESIA OR HE IS WORKING FOR AND ON BEHALF OF LG INDONESIA. NONE OF THE EXPATRIATE HAS SAID THAT HE HAS BEEN REPORTING TO L G INDONESIA. THE EXPATRIATES HAVE IN FACT COME FROM L G KOREA AND TH EIR SALARIES HAVE BEEN PAID BY LG INDIA DURING THE PERIOD OF SECONDMENT. IN VIEW OF THESE FACTS, THERE IS NO QUESTION OF EXISTENCE OF PE OF THE ASSE SSEE IN INDIA UNDER ARTICLE 5(1)/5(2) OF DTAA AS NO FIXED PLACE OF BUSI NESS OR PLACE OF MANAGEMENT IS AVAILABLE TO THE ASSESSEE IN INDIA. 9.3. FURTHER, FROM LANGUAGE OF ARTICLE 5(6) OF DTAA , IT IS CLEAR THAT ANY SUBSIDIARY SHALL NOT BE PE OF ITS HOLDING COMPANY O R VICE VERSA UNLESS CONDITIONS OF ITS BEING PE UNDER OTHER PARAGRAPHS O F ARTICLE 5 OF DTAA ARE SATISFIED. HERE, THE ASSESSING OFFICER HAS GONE ON E STEP FURTHER BY SAYING THAT LG INDIA REPRESENTS PE OF ITS PARENT COMPANY AND ALSO OF ALL OTHER AFFILIATES. THIS OBSERVATION OF THE ASSESSING OFFI CER IS NOT SUPPORTED BY PROVISIONS OF LAW ON THE ISSUE. 20. NOW COMING TO THE NEXT ASPECT OF THE ISSUE WHIC H IS AN ALTERNATE PLEA BEFORE THE AUTHORITIES BELOW AND ALSO BEFORE US THA T THE TRANSACTION BETWEEN THE ASSESSEE AND LGEIL HAS BEEN FOUND AT ARMS LENG TH BY THE TPO AND HENCE, NO MERIT IN ANY PROFIT ATTRIBUTION TO A PERSON EVEN IF THERE WAS PE IN INDIA. THE 17 ITA NO.1845 /DEL/2014 & OTHERS ASSESSMENT YEARS 2004-05 & OTHERS HONBLE SUPREME COURT IN HONDA MOTORS CO. LTD. VS A DIT IN CIVIL APPEAL NOS.2833 TO 2840 OF 2018, JUDGEMENT DATED 14.03.201 8, REPORTED IN [2018] 92 TAXMANN.COM 353 (SC) HAD HELD THAT ONCE THE INTERNA TIONAL TRANSACTIONS WERE HELD TO BE AT ARMS LENGTH PRICE, EVEN IF THERE WAS PE IN INDIA, NO PROFIT COULD BE ATTRIBUTED TO IT. IT WAS HELD AS UNDER:- 3. IN THE JUDGEMENT OF THIS COURT DATED 24.10.2017 IN ASSTT. DIT VS E-FUNDS IT SOLUTIONS INC. [2017] 86 TAXMANN.COM 240/251 TAXMAN 280/399 ITR 34 (SC) AND CONNECTED MATTERS, IT HAS B EEN HELD THAT ONCE ARMS LENGTH PRINCIPLE HAS BEEN SATISFIED, THE RE CAN BE NO FURTHER PROFIT ATTRIBUTABLE TO A PERSON EVEN IF IT HAS A PE RMANENT ESTABLISHMENT IN INDIA. 4. SINCE, THE IMPUGNED NOTICE FOR THE REASSESSMENT IS BASED ONLY ON THE ALLEGATION THAT THE APPELLANT(S) HAS PERMANE NT ESTABLISHMENT IN INDIA, THE NOTICE CANNOT BE SUSTAINED ONCE ARMS LE NGTH PRICE PROCEDURE HAS BEEN FOLLOWED. 5. ACCORDINGLY, THE IMPUGNED ORDER(S) IS SET ASIDE AND THE APPEALS ARE ALLOWED. 21. THE ASSESSEE BEFORE US REFERRED TO THE FOLLOWIN G ORDERS OF THE TPO/S PASSED IN THE CASE OF LGEIL FOR ASSESSMENT YEARS 20 04-05 TO 2007-08 AND 2009-10, WHICH ARE PLACED AT PAGES 247 TO 403 AS UN DER; ANNEXURE NO. PARTICULARS PAGE NO. 11. COPY OF TPO ORDER DATED 20.12.2006 IN THE CASE OF LGIL FOR ASSESSMENT YEAR 2004-05 247 - 279 12. COPY OF TPO ORDER DATED 20.12.2008 IN THE CASE OF LGIL FOR ASSESSMENT YEAR 2005-06 280 - 301 13. COPY OF TPO ORDER DATED 15.10.2009 IN THE CASE OF LGIL FOR ASSESSMENT YEAR 2006-07 302 - 323 14. COPY OF TPO ORDER DATED 18.10.2011 IN THE CASE OF LGIL FOR ASSESSMENT YEAR 2007-08 324 - 325 15. COPY OF ORDER DATED 3 0.01.2013 IN THE CASE OF LGIL FOR ASSESSMENT YEAR 2009-10 326 - 403 18 ITA NO.1845 /DEL/2014 & OTHERS ASSESSMENT YEARS 2004-05 & OTHERS 22. ONCE THE INTERNATIONAL TRANSACTION, IF ANY, HAD BEEN FOUND TO BE AT ARMS LENGTH IN THE TP PROCEEDINGS CARRIED OUT IN THE CAS E OF LGEIL, THEN THE ENTIRE QUESTION OF PE BECOMES ACADEMIC IN NATURE. WE FIND SUPPORT FROM THE RATIO LAID DOWN BY HONBLE SUPREME COURT IN THE CASE OF HONDA MOTORS CO. LTD. VS ADIT, NOIDA [2018] 92 TAXMANN.COM 353 (SC). IT HAS BEEN LAID DOWN BY THE HONBLE SUPREME COURT (SUPRA) THAT WHERE ONCE THE A RMS LENGTH PRINCIPLE HAS BEEN SATISFIED THEN THERE COULD BE NO FURTHER PROFI T ATTRIBUTABLE TO A PERSON, EVEN IF IT HAD PE IN INDIA. THEREFORE, IT WAS FURT HER HELD THAT WHERE NOTICE WAS ISSUED TO THE ASSESSEE FOR RE-ASSESSMENT BASED ONLY ON ALLEGATION THAT IT HAD PE IN INDIA, SAID NOTICE COULD NOT BE SUSTAINED, ON CE ARMS LENGTH PROCEDURE HAS BEEN FOLLOWED. ACCORDINGLY WE HOLD THAT IN ANY CASE, TRANSACTION HAS BEEN FOUND TO ARMS LENGTH THEN THE ENTIRE QUESTION OF P E BECOMES ACADEMIC AND THERE IS NO MERIT IN THE RE-ASSESSMENT PROCEEDINGS INITIATED U/S 147 OF THE ACT. AS FAR AS THE OBJECTIONS OF THE LD.DR FOR THE REVEN UE IS CONCERNED, EXISTENCE OF PE OF THE ASSESSEE IN INDIA UNDER ARTICLE 5(1)(I) O F THE DTAA I.E. FIXED PLACE OF BUSINESS OR PLACE OF MANAGEMENT IS AVAILABLE TO THE ASSESSEE IN INDIA, THEN ALSO THE CONSEQUENT REASSESSMENT PROCEEDINGS INITIA TED AGAINST THE ASSESSEE U/S 147 OF THE ACT DO NOT SURVIVE. THUS, THE PRELIM INARY ISSUE RAISED BY THE ASSESSEE IS ALLOWED. THE ISSUE RAISED IN ASSESSMENT YEARS 2005-06 AND 2006- 07 IN THE CASE OF PT. LP. DISPLAY INDONESIA IS SIMI LAR AND FOLLOWING THE SAME PARITY OF REASONING, THE SAID ISSUE IS ALLOWED. 23. THE APPEALS OF THE REVENUE FOR ASSESSMENT YEARS 2004-05 & 2005-06 ON MERITS ARE THUS DISMISSED. 19 ITA NO.1845 /DEL/2014 & OTHERS ASSESSMENT YEARS 2004-05 & OTHERS 24. NOW, COMING TO THE APPEALS FILED BY THE ASSESSE E IN L.G. PHILIPS KOREA. FIRST FOR ASSESSMENT YEARS 2005-06 & 2006-07, THE C ROSS-OBJECTIONS HAVE BEEN FILED BY THE ASSESSEE ON THE ISSUE OF BOTH RE-OPENI NG OF THE ASSESSMENT AND EXISTENCE OF PE. FOLLOWING THE SAME LINE OF REASON ING AS IN PARA ABOVE, WE HOLD THAT THE REASSESSMENT PROCEEDINGS INITIATED AGAINST THE ASSESSEE UNDER SECTION 147 OF THE ACT DO NOT SURVIVE. ACCORDINGLY, THE CRO SS OBJECTION NO.2 RAISED BY THE ASSESSEE IN ASSESSMENT YEARS 2005-06 & 2006-07 IS ALLOWED. CONSEQUENT THERETO THE OTHER CROSS OBJECTIONS RAISED BY THE AS SESSEE BECOME ACADEMIC IN NATURE. FURTHER THE APPEAL OF THE REVENUE ARE DISMI SSED AS WE HAVE HELD THAT REASSESSMENT PROCEEDINGS TO BE INVALID. 25. NOW, COMING TO THE APPEALS OF ASSESSEE FOR ASSE SSMENT YEARS 2007-08 & 2009-10 WHICH ARE DISMISSED BY THE CIT(A) ON THE TE CHNICAL GROUND THAT THE PAN QUOTED IN THE MEMO OF APPEAL WAS NOT THAT OF TH E ASSESSEE BUT THAT OF THE AUTHORIZED SIGNATORY. THE HONBLE SUPREME COURT IN CIT VS ASHOKA ENGG.CO. [1992] 194 ITR 645 (SC) HAS HELD AS UNDER:- BUT IT IS AN EQUALLY WELL SETTLED PREPOSITION OF L AW THAT, IF THERE IS A PROVISION CONFERRING RIGHT OF APPEAL, IT SHOULD BE READ IN A REASONABLE, PRACTICAL AND LIBERAL MANNER. 26. APPLYING THE SAID RATIO LAID DOWN BY THE HONBL E SUPREME COURT(SUPRA), WE FIND THAT THERE IS NO MERIT IN THE SUMMARY DISPO SAL OF THE APPEALS BY CIT(A). IN ANY CASE, THE ASSESSEE RAISED BOTH ISSU E ON MERITS AND RE-OPENING OF ASSESSMENT U/S 147 OF THE ACT BEFORE US. WE HAVE AL READY DECIDED THE SAID ISSUE OF REOPENING OF ASSESSMENT UNDER SECTION 147 OF THE ACT IN THE CASE OF PT. LP DISPLAY INDONESIA, IT MAY BE POINTED THEREIN THA T IN THE CASE OF THE ASSESSEE 20 ITA NO.1845 /DEL/2014 & OTHERS ASSESSMENT YEARS 2004-05 & OTHERS NONE OF THE AUTHORITIES BELOW HAVE FOUND ANY INTERN ATIONAL TRANSACTIONS WHATSOEVER WITH LGEIL. IN THESE CIRCUMSTANCES, THE RE IS NO MERIT IN THE REASSESSMENT PROCEEDINGS INITIATED UNDER SECTION 14 7 OF THE ACT. 27. IN THE RESULT, APPEALS OF THE ASSESSEE OF PT. L P. DISPLAY INDONESIA, RELATING TO ASSESSMENT YEAR 2004-05 TO 2006-07 ARE ALLOWED AND APPEALS OF THE REVENUE RELATING TO ASSESSMENT YEARS 2004-05 & 2006 -07 ARE DISMISSED. FURTHER, CROSS OBJECTIONS FILED BY THE ASSESSEE (M/ S L.G. PHILIPS DISPLAY KOREA CO. LTD.) FOR ASSESSMENT YEAR 2005-06 & 2006-07 AND APPEALS OF THE ASSESSEE RELATING TO ASSESSMENT YEARS 2007-08 & 2009-10 ARE ALLOWED. THE APPEALS OF THE REVENUE RELATING TO ASSESSMENT YEARS 2005-06 AN D 2006-07 ARE DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 20 TH OCTOBER, 2020. SD/- SD/- (DR. B.R.R. KUMAR) (SUSHMA CHOWLA) /ACCOUNTANT MEMBER / VICE PRESIDENT / DATED : 20 TH OCTOBER, 2020 * AMIT KUMAR * / COPY OF THE ORDER IS FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT 3. ( ) / THE CIT(A) 4. / THE PR. CIT 5. 6. , , / DR, ITAT, DELHI / GUARD FILE. / BY ORDER // TRUE COPY // , , ASSISTANT REGISTRAR, ITAT, DELHI