ADIT (I.T) 3(2), MUMBAI V. M/s. OY SISU AB (OY SISU AUTO AB), MUMBAI

ITA 3595/MUM/2005

• Counselvise Citation: 359519914 RSA 2005
• Duration Of Justice: 8 year(s) 3 month(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 14-08-2013
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: L
• Next Hearing Date: 05-08-2013
• Assessment Year: 1989-1990
• Appeal Filed On: 13-05-2005
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: R S SRIVASTAVA
• Keywords: Double taxation relief

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH L, MUMBAI , !' # $## #% , & !' ' BEFORE SHRI RAJENDRA SINGH, ACCOUNTANT MEMBER AND SHRI VIVEK VARMA, JUDICIAL MEMBER . : 3595 / / 2005, 1989-90 ITA NO. : 3595/MUM/2005 (ASSESSMENT YEAR: 1989-90) ADIT(IT)-3(2), R. NO. 132, 1 ST FLOOR, N M ROAD, MUMBAI -400 038 VS OY SISU AB(FORMERLY KNOWN AS OY SISU AUTO AB), C/O. S.R. BATLIBOI & CO., 18 TH FLOOR, EXPRESS TOWERS, NARIMAN POINT, MUMBAI -400 021 PAN: (SEARCHED BUT NOT FOUND) (APPELLANT) (RESPONDENT) APPELLANT BY : MR. R. S. SRIVASTAVA RESPONDENT BY : NONE /DATE OF HEARING : 05-08-2013 / DATE OF PRONOUNCEMENT : 14-08-2013 ! + O R D E R $## #% , : PER VIVEK VARMA, JM: THE APPEAL FILED BY THE DEPARTMENT AGAINST THE ORDER OF CIT(A)- 33, MUMBAI, DATED 23.02.2005, WHEREIN, THE FOLLOWING GROUNDS HA VE BEEN RAISED: ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A) HAS ERRED IN DIRECTING THE AO TO DELETE THE 1% DEEM ED PROFIT ON RS. 4,59,598/- BEING THE AMOUNT PAYABLE TO THE APPELLAN T FOR WORK DONE OUTSIDE INDIA, AMOUNTING TO RS. 4,59,706/- ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN L AW, THE LD. CIT(A) HAS ERRED IN DIRECTING THE AO TO TAX THE APPELLANT ON AN AMOUNT OF RS. 79,500/- ONLY AS AGAINST RS. 29,10,058/- BEING 10% OF THE REVENUE RECEIVED BY THE APPELLANT RIGHTLY ADOPTED BY THE AO . THE APPELLANT PRAYS THAT THE ORDER OF THE TRIBUNAL ON THE ABOVE GROUNDS SET ASIDE AND THAT OF THE AO RESTORED. 2. THE FACTS OF THE CASE ARE OY SISU AB (FORMERLY KNOWN AS OY SISU AUTO AB) ITA NO. 3595/MUM/2005 2 3.1 OY SISU AB (FORMERLY KNOWN AS OY SISU AUTO AB) (SISU AUTO OR THE APPELLANT), A COMPANY INCORPORATED IN FINLAND HAD EXECUTED A CONTRACT WITH NHAVA SHEVA PORT TRUST (NSPT) FOR THE SUPPLY OF TRACTORS AND TRAILERS. THE TOTAL SCOPE OF WORKS AS PER THE CONTR ACT INCLUDED MANUFACTURE, TRANSPORTATION AND DELIVERY OF EQUIPME NT TO NSPT. DURING THE YEAR UNDER CONSIDERATION, THE APPELLANT EARNED INCOME FROM SUPPLY OF TRACTORS FROM OUTSIDE INDIA AND INLAND TRANSPORT ATION WITHIN INDIA. UNDER THE MAIN CONTRACT, SISU AUTO WAS REQUIRED TO SUPPLY 38 TRACTORS AND RELATED SPARES) TO NSPT FOR A CONSIDERATION OF FINNISH MARKS (FM) (13761598. THE TRACTORS SUPPLIED TO NSPT WERE MANUF ACTURED IN FINLAND BY THE APPELLANT AND TRANSPORTED TO INDIA. FURTHER, THE APPELLANT HAD ENGAGED M/S USHA SALES SERVICES CONSU LTANTS (USHA SALES) FOR RENDERING CERTAIN SPECIFIC SERVICES IN I NDIA. USHA SALES WAS PRESENT IN ALL MEETINGS BETWEEN NSPT AND SISU AUTO; TRACTORS DISPATCHED TO INDIAN PORT WERE CLEARED BY USHA SALES AND CUSTOMS DUTY INSURANCE AND FREIGHT WAS PA ID BY USHA SALES; USHA SALES REPRESENTED SISU AUTO FOR THE TAX REFUND DUE TO SISU AUTO FROM THE REVENUE AUTHORITIES; AND IN RELATION TO THE AFORESAID SERVICES, SISU AUTO PA ID AN AGREED COMMISSION TO USHA SALES. 3.2 UNDER THE MAIN CONTRACT THE APPELLANT WAS ALSO REQUIRED TO SUPPLY 136 TRAILERS AND RELATED SPARES TO NSPT. THE APPELLANT WAS NOT ENGAGED IN SUPPLY OF TRAILERS IN INDIA AND IT WAS ENTERED INTO WITH NSPT AS JOINT BID WITH AN INDIAN COMPANY I.E. M/S BRAITH WAITE & COMP ANY CALCUTTA. THE APPELLANT ENTERED INTO A SUB CONTRACT WITH BRAI TH WAITE FOR MANUFACTURING THE ABOVE TRAILERS IN INDIA. HOWEVER, THE TRAILERS WERE SUPPLIED BY BRAITH WAITE DIRECTLY TO NSPT AND THE P AYMENTS RELATING TO TRAILERS WERE MADE TO BRAITH WAITE BY NSPT. THE APP ELLANT ENTERED INTO THE FORMAL AGREEMENT WITH NSPT FOR SUPPLY OF TRAILE RS ONLY BECAUSE NSPT DESIRED TO PLACE A SINGLE CONTRACT FOR BOTH TH E ABOVE ACTIVITIES I.E. SUPPLY OF TRACTORS AND TRAILERS. 3.3 THE REVENUE RECEIVABLE FROM NSPT FOR SUPPLY OF TRAILERS UNDER THE MAIN CONTRACT AND THE ACTUAL PAYMENT MADE UNDER SUB CONT RACT IS SUMMARIZED BELOW: PARTICULARS CONSIDERATION FOR SUPPLY OF TRAILERS UNDER MAIN CONTRACT CONSIDERATION FOR SUPPLY OF TRAILERS UNDER SUB-CONTRACT AND PAID DIRECTLY BY NSPT TO BRAITHWAITE(REFER PAGE 3 OF THE SUB- CONTRACT)/TRANSPORT CHARGES PAID BY THE APPELLANT DIFFERENCE BETWEEN CONSIDERATION UNDER MAIN CONTRACT AND SUBCONTRACT (ESSENTIALLY DUE TO INLAND TRANSPORT) (AMOUNT RS) (AMOUNT RS) (AMOUNT RS) SUPPLY OF TRAILERS 28,560,000 28,560,000 NIL SUPPLY OF SPARES 540,580 540,580 NIL INLAND TRANSPORTATION 837,500 408,000 429,500 INLAND TRANSPORT CHARGES PAID BY THE APPELLANT -- 350,000 (350,000) TOTAL (RS) 29,938,080 29,858,580 79,500 OY SISU AB (FORMERLY KNOWN AS OY SISU AUTO AB) ITA NO. 3595/MUM/2005 3 3. BEFORE THE AO IT WAS SUBMITTED THAT THE ASSESSEE DID NOT HAVE A PE IN INDIA, THEREFORE, PROVISIONS UNDER INDIA FINLAND DTAA WOULD NOT BE APPLICABLE. ACCORDING TO THE ASSESSEE TRACTORS WERE T O BE ASSEMBLED AND MANUFACTURED IN FINLAND BY THE ASSESSEE, WHEREAS, TRA CTORS WERE TO BE MANUFACTURED BY BRAITH WAITE & CO. IN CALCUTTA, USIN G ITS OWN ASSEMBLY / INSTALLATION FACILITIES. 4. THE AO HELD THAT THE ASSESSEE HAD PE IN INDIA IN THE FORM OF USHA SALES AND HENCE, HE ATTRIBUTED CERTAIN PERCENTAGE OF REVENUE FROM SALE OF TRACTORS AS TAXABLE IN INDIA, BESIDES HOLDING T HAT CERTAIN PERCENTAGE OF SALE OF TRAILERS WAS ALSO TAXABLE. 5. IN THE APPEAL BEFORE THE CIT(A), THE ASSESSEE AGITATED THE VIEW TAKEN BY THE AO. THE CIT(A) HELD, THAT FOR SUPPLY OF 36 TRACTORS, WHICH WERE MANUF ACTURED OUTSIDE INDIA (FINLAND) AND TRANSPORTED TO INDIA, THE USHA SALES AND SERVICES CONSULTANTS PVT LTD. IS AN AGENT OF INDEPENDENT STATUS. HE HAS FURTHER HELD THAT IN VIEW OF THE PROVISIONS OF THE INDIA FINLAND TREATY THE ACTI VITIES NOT ATTRIBUTABLE TO THE PE CANNOT BE SUBJECT TO TAX IN INDIA, THEREFORE THE AO ERRED IN LEVYING 1% DEEMED PROFIT ON RS. 45970598/- BEING THE AMOUNT PAYABLE T O THE APPELLANT FOR WORK DONE OUTSIDE INDIA AMOUNTING TO RS. 459706/-. SO FA R AS SUPPLY OF 136 TRAILERS IS CONCERNED FOR WHICH SUB CONTRACT WAS GIVEN BY TH E APPELLANT TO BRAITH WAITE, THE LD. CIT(A) HELD THAT THE AO IS CORRECT IN HOLDI NG THAT THE ASSESSEE COMPANY MAINTAIN PE WITHIN THE MEANING OF SUB CLAUSE (BB) O F CLAUSE 9 OF PARAGRAPH 1 OF ARTICLE 2 OF DTAA AND OBSERVED THAT THE WORDS C ONSTRUCTION, INSTALLATION OR ASSEMBLY PROJECT HAVE TO BE GIVEN A WIDE MEANING. THE CIT(A) ALSO DIRECTED THE AO TO RECOMPUTE THE INCOME OF THE ASSESSEE COMP ANY IN ACCORDANCE WITH THE PROVISIONS OF THE TREATY BETWEEN INDIA AND FINL AND IN RESPECT OF THE WORK DONE IN INDIA. 6. AGAINST THE ORDER, THE DEPARTMENT CAME UP IN APPEAL BEFORE THE ITAT, THE COORDINATE BENCH AT MUMBAI HELD, THE HONBLE ITAT VIDE ORDER N. 587/BOM/92 AY 1992 HELD THAT THE SERVICES OF M/S. USHA SALES & SERVICES CONSULTANTS PVT. LTD. COME WITHIN THE AMBIT OF ARTICLE II(1)(G)(AA) AND UPHOLD THE ORDER OF THE AO TAXING THE PROFIT IN RESPECT OF THE SUPPLY OF TRACT ORS AT 1% IN RS. 4,59,70,708/- AMOUNTING TO RS. 4,59,70,706/-. THE H ONBLE ITAT ALSO OBSERVED THAT, WE DO NOT SEE ANY REASON TO INTERFERE WITH THE FIN DINGS OF THE LEARNED CIT(A) IN REGARD TO THE ADDITION MADE BY TH E AO AT 10% OF RS. 2,91,00,580/- AMOUNTING TO RS. 29,10,058/-. KEEPING IN VIEW THE TERMS CONTAINED IN THE AGREEMENT, BETWEEN THE ASSESSEE AND M/S. BRAITH WAITE CO LTD., WE FIND IT DIFFICULT TO OY SISU AB (FORMERLY KNOWN AS OY SISU AUTO AB) ITA NO. 3595/MUM/2005 4 ACCEPT THAT THERE WAS NO PROFIT EARNED BY THE ASSES SEE ON THE SUPPLY OF TROLLIES. SINCE WE DO NOT HAVE THE BENEFI T OF GOING THROUGH THE NECESSARY TERMS OF CONTRACT AND DOCUMEN TARY EVIDENCE RELIED UPON BY THE LEARNED CIT(A), WE SET ASIDE THE MATTER BACK TO THE CIT(A) FOR THE LIMITED PURPOSE O F DECIDING THE ELEMENT OF PROFIT INVOLVED IN SUPPLY OF TROLLIES BY THE ASSESSEE TO NAHVA SHEVA PORT TRUST (NSPT) MANUFACTURED BY M/S. BRAITH WAITE & CO. 7. AGAINST THIS ORDER, THE ASSESSEE FILED A MISCELLANEOUS PE TITION AND AS A RESULT, THEREOF, THE ITAT IN THE MA RESTORED TH E MATTER BACK TO THE FILE OF THE AO TO FRAME THE ASSESSMENT DE NOVO , TAKING INTO ACCOUNT THE EFFECT OF NEW CLAUSE, AS PER NOTIFICATION NO. GSR /786(E) DATED 20.11.1984. 8. AS PER THE DIRECTIONS, THE AO REFRAMED THE ASSESSMEN T (THIS ROUND IS IMPUGNED). 9. BEFORE THE CIT(A), THE ASSESSEE SUBMITTED, 3.13 THE LD. COUNSEL OF THE APPELLANT HAS SUBMITT ED THAT A JOINT READING OF ARTICLE 5(5) AND 5(7) OF THE TREATY INDICATE THAT A RTICLE 5(5) SHALL APPLY ONLY TO AGENTS WHO CAN BE REGARDED AS DEPENDENT AGE NTS OF THE ASSESSEE. THIS IMPLIES THAT BEFORE EXAMINING WHETHE R AN AGENT SATISFIES CONDITIONS LAID DOWN IN PARA 5 IT MUST BE EXAMINED WHETHER THE AGENT SATISFIES CONDITIONS LAID DOWN IN PARA / (INDEPENDE NT AGENTS CLAUSE). ONLY WHERE THE AGENT DOES NOT SATISFY THE CONDITION S IN PARA 7 CONDITIONS LAID DOWN IN PARA 5 WILL NEED TO BE EXAM INED. HENCE AN AGENT WHO SATISFIES CONDITIONS LAID DOWN IN PARA 7 WOULD NOT CONSTITUTE A PE IN INDIA EVEN IF THE INDEPENDENT AGENT SATISFI ES THE CONDITIONS LAID DOWN IN PARA 5. IT IS SUBMITTED THAT USHA SALES AN INDEPENDENT LEGAL ENTITY OPERATING IN ORDINARY COURSE OF ITS BUSINESS AND ITS ACTIVITIES ARE NOT DEVOTED WHOLLY AND ALMOST WHOLLY ON BEHALF OF T HE APPELLANT. THE CIT(A) IN HIS ORDER HAS ACCEPTED THAT USHA SALES IS THE AGENT OF VARIOUS OTHER PRINCIPALS AND THE ASSESSEE IS JUST ONE OF TH EM. 3.14 IT IS FURTHER SUBMITTED THAT AS PER THE MAIN CONTRACT THE TRACTORS SUPPLIED TO NSPT WERE ASSEMBLED / MANUFACTURED IN F INLAND AND TRANSPORTED TO INDIA. ACCORDINGLY, NO ASSEMBLY ACTI VITIES IN RELATION TO SUPPLY OF TRACTORS WERE CARRIED OUT IN INDIA. FURTH ER, FOR THE PURPOSE OF SUPPLY OF TRAILERS TO NSPT, THE APPELLANT HAS ENTER ED INTO A SUB CONTRACT WITH BRAITH WAITE FOR MANUFACTURE OF TRAILERS IN IN DIA. THEREFORE, THE ACS CONTENTION THAT THE APPELLANT HAD AN INSTALLAT ION PE IS RELEVANT ONLY FOR THE PORTION OF THE MAIN CONTRACT RELATING TO SUPPLY OF TRAILERS. THE AO HAS STATED IN THE ORDER THAT THE APPELLANT H AS INSTALLATION/ASSEMBLY A PE IN INDIA UNDER THE NEW T REATY. IT IS SUBMITTED THAT THE APPELLANT DOES NOT HAVE A PE IN INDIA UNDER ARTICLE 5(3)(A) AND 5(3)(B) OF THE NEW TREATY. 10. THE CIT(A), ON CONSIDERATION OF THE ARGUMENTS OF THE AO, HELD, OY SISU AB (FORMERLY KNOWN AS OY SISU AUTO AB) ITA NO. 3595/MUM/2005 5 4. I HAVE CONSIDERED THE APPELLANTS SUBMISSION, ASSESSMENT ORDER AND THE RELEVANT ARTICLES 5(5) & 5(7) OF THE TREATY. ON A CAREFUL CONSIDERATION OF THE ABOVE ARTICLES, I AM OF THE VIEW THAT USHA S ALES IS AN INDEPENDENT AGENT WITHIN THE MEANING OF ARTICLE 5(7 ) OF THE TREATY, WHICH READS AS UNDER:- 7. AN ENTERPRISE SHALL NOT BE DEEMED TO HAVE A P ERMANENT ESTABLISHMENT IN A CONTRACTING STATE MERELY BECAUSE IT CARRIES ON BUSI NESS IN THAT STATE THROUGH A BROKER, GENERAL COMMISSION AGENT OR ANY O THER AGENT OF AN INDEPENDENT STATUS, PROVIDED THAT SUCH PERSONS ARE ACTING IN THE ORDINARY COURSE OF THEIR BUSINESS. HOWEVER, WHEN THE ACTIVIT IES OF SUCH AN AGENT ARE DEVOTED WHOLLY OR ALMOST ON BEHALF OF THE ENTERPRIS E, HE SHALL NOT BE CONSIDERED AN AGENT OF AN INDEPENDENT STATUS WITHIN THE MEANING OF THIS PARAGRAPH. 4.1 NO DOUBT, SOME ACTIVITIES LIKE ATTENDING MEETIN GS BETWEEN NSPT AND SISU AUTO, CLEARING TRACTORS DISPATCHED TO THE INDIAN PO RT, REPRESENTATION FOR THE TAX REFUND DUE BEFORE THE REVENUE AUTHORITIES ARE C ARRIED OUT ON BEHALF OF THE APPELLANT BUT IT IS ACTING IN THE ORDINARY COUR SE OF THEIR BUSINESS. IT IS ALSO PERTINENT TO MENTION HERE THAT MY LD. PREDECES SOR AFTER CAREFULLY CONSIDERING THE CONTENTION OF THE APPELLANT HAD ACC EPTED THE APPELLANTS PLEA AND IT WAS HELD THAT USHA SALES IS AN AGENT OF AN INDEPENDENT STATUS AND THE APPELLANT CANNOT BE DEEMED TO HAVE A PE IN INDIA ON THIS ACCOUNT. I DONT FIND ANY REASON TO INTERFERE WITH THE ORDER O F MY LD. PREDECESSOR. I, THEREFORE, HOLD THAT USHA SALES IS AN INDEPENDENT STATUS AND THEREFORE, THE APPELLANT CANNOT BE DEEMED TO HAVE A PE IN INDIA FO R THE SUPPLY OF 38 TRACTORS TO NSPT. HENCE, CANNOT BE SUBJECTED TO TAX FOR WORK DONE OUTSIDE INDIA I.E. AMOUNTING TO RS. 459706/- BEING 1% DEEME D PROFIT ON RS. 45970598/-. IN THE RESULT, THE APPEAL IS DECIDED IN APPELLANTS FAVOUR. 4.2 SO FAR AS SUPPLY OF 136 TRAILERS IS CONCERNED F OR WHICH THE APPELLANT HAD ENTERED INTO A SUB CONTRACT WITH BRAITH WAITE FOR M ANUFACTURING THE TRAILERS IN INDIA, I HOLD THAT APPELLANT HAD AN INSTALLATION PB AND THEREFORE, EVEN UNDER THE NEW TREATY THE APPELLANT HAS A PE IN INDI A WITHIN THE MEANING OF ARTICLE 5(3)(A) AND 5(3)(B) OF THE NEW TREATY. FOR THE SAKE OF CONVENIENCE THE ARTICLE 5(3)(A) & 5(3)(B) IS REPRODUCED HEREIN UNDE R: A) A BUILDING SITE, A CONSTRUCTION, ASSEMBLY OR IN STALLATION PROJECT OR SUPERVISORY ACTIVITIES IN CONNECTION THEREWITH, BUT ONLY WHERE SUCH SITE, PROJECT OR ACTIVITIES CONTINUE FOR A PERIOD OF MORE THAN SIX MONTH. B) A BUILDING SITE, A CONSTRUCTION, ASSEMBLY OR IN STALLATION PROJECT OR SUPERVISORY ACTIVITY BEING INCIDENTAL TO THE SALE O F MACHINERY OR EQUIPMENT, WHERE SUCH SITE, PROJECT OR ACTIVITY CONTINUES FOR A PERIOD OF EXCEEDING SIX MONTHS AND THE CHARGES PAYABLE FOR THE PROJECT OR S UPERVISORY ACTIVITY EXCEED 10 PER CENT OF THE SALE PRICE OF THE MACHINE RY OR EQUIPMENT. 4.3 THE CONTENTION OF THE APPELLANT THAT IT DID NOT CARRY OUT ANY OPERATION IN INDIA IN RELATION TO THE SUPPLY OF TRAILERS IS NOT CORRECT. THE APPELLANT HAD ENTERED INTO A SUB CONTRACT WITH BRAITH WAITE FOR M ANUFACTURING THE TRAILERS, WHICH WERE LATER SUPPLIED BY BRAITH WAITE TO NSPT. THUS, IT MAY BE NOTED THAT ASSEMBLY WORK IS CARRIED OUT BY THE APPELLANT IN INDIA THROUGH BRAITH WAITE. EVEN, THE HONBLE ITAT IN THE APPELLANTS OW N CASE ORDER DATED 15/10/200 1 AND M.A. NO. 159/M/09 ARISING OUT OF I. T.A.NO.5871M192 A.Y. 1989-90 HAD SET ASIDE THE MATTER BACK TO THE F ILE OF THE AO TO FRAME THE ASSESSMENT DE NOVO BY TAKING INTO CONSIDERATION THE EFFECT OF THE CLAUSES AS CONTAINED IN THE DTAA NOTIFIED VIDE NOTI FICATION NO.GSR-786(E) DATED NOV.20, 1984 W.E.F. 1/4/85 REPORTED IN 152 IT R 57 (ST). 4.4 IN RESPECT OF TAXATION OF INCOME RELATING TO WO RK DONE IN INDIA, WHICH WAS SUB CONTRACTED BY THE APPELLANT TO BRAITH WAITE & C O. FOR SUPPLY OF THE TRAILERS TO NSPT, I DO AGREE WITH THE FINDINGS OF L D. PREDECESSOR WHO IN THE APPELLANTS OWN CASE IN ITS APPELLATE ORDER DATED 1 2/11/1991 HAD OBSERVED THAT THERE WAS AN ELEMENT OF PROFIT ACCRUE D TO THE APPELLANT ON THE AMOUNT SUB CONTRACTED TO BRAITH WAITE. HOWEVER, HE DID NOT AGREE WITH THE OY SISU AB (FORMERLY KNOWN AS OY SISU AUTO AB) ITA NO. 3595/MUM/2005 6 AO WHO HAD MERELY MADE AN ESTIMATE OF 10% OF THE CO NTRACT PRICE OF TRAILERS BETWEEN NSPT AND OY SISU AT RS. 29100580/- AS PROFIT AND TAXED THE SAME AS INCOME OF THE APPELLANT WITHOUT HAVING BROUGHT ANY MATERIAL PROOF ON RECORD. THE AO WAS, THEREFORE, DIRECTED TO RECOMPUTE THE INCOME OF THE APPELLANT IN ACCORDANCE WITH THE PROVISIONS OF INDIA FINLAND TREATY IN RESPECT OF WORK DONE IN INDIA I.E. WORK ATTRIBUTABL E TO PE IN INDIA. THE LD. CIT(A) COMPUTED THE PROFIT IN THE FOLLOWING MANNER: PARTICULARS RUPEES RUPEES REVENUES: SUPPLY OF TROLLIES SUPPLY OF SPARES PAYMENT FOR INLAND TRANSPORTATION REIMBURSEMENT OF CUSTOM DUTY 285,60,000 5,40,580 8,37,500 472,36,874 77174,954 LESS COSTS: PAYMENT MADE DIRECTLY TO BRAITH WAITE - TOTAL PRICE FOR 136 TRAILLERS RS. 2,10,000 PER TRAILER TOTAL PRICE OF SPARES COST OF INLAND TRANSPORT FOR 136 TRAILERS RS. 3000 PER TRAILER PAYMENT TOWARDS CUSTOM DUTY EXPENSES FOR INLAND TRANSPORT 285,60,000 5,40,580 4,08,000 472,36,874 3,50,000 770,95,454 PROFIT/LOSS 79,500 4.5 I DONT FIND ANY REASON TO DEVIATE FROM THE FIN DING OF MY LD. PREDECESSOR. GROUND NO. (I), (II) & (III) ARE DISPOSED OF ACCORD INGLY. IN THE RESULT THE APPEAL IS PARTLY ALLOWED. 11. AGAINST THIS ORDER, THE PRESENT APPEAL IS IMPUGNED BEFORE US. 12. FROM THE RECORDS, WE FIND THAT THERE IS A CONSISTENT NON APPEARANCE ON THE PART OF THE ASSESSEE. ON THE LAST D ATE, THE DR WAS ASKED TO EFFECT THE SERVICE OF NOTICE OF HEARING. AT THE TIM E OF PRESENT HEARING, THE AR PLACED BEFORE THE BENCH PROOF OF SERVICE O N S.R. BATLIBOI & CO. (CA), AS THE ADDRESS GIVEN ON ALL THE COMMUNI CATIONS IS THAT OF S.R. BATLIBOI & CO. C.A. FIRM. 13. SINCE EVEN TODAY, THERE WAS NO APPEARANCE ON BEHA LF OF THE ASSESSEE, WE THINK IT APPROPRIATE TO PROCEED WITH THE CA SE AND DISPOSE IT OFF EX PARTE THE ASSESSEE. 14. FROM THE FACTS GATHERED FROM THE ORDER OF THE AO IN TWO ROUNDS, THE ASSESSEE TILL DATE HAS NOT BEEN ABLE TO CONVINCE THE FACT THAT HOHA OY SISU AB (FORMERLY KNOWN AS OY SISU AUTO AB) ITA NO. 3595/MUM/2005 7 SALES IS NOT A PE OF THE ASSESSEE AND IS AN INDEPENDENT BRANCH BY ITSELF. 15. IN AN INCOME TAX PROCEEDING IT IS THE DUTY OF THE A SSESSEE TO CONVINCE, WITH MATERIAL AND EVIDENCE, TO THE SATISFACTION OF THE AO, THIS EXERCISE, THE ASSESSEE HAS FAILED TO COMMIT. SINCE, IN THE TW O ROUNDS, THE ASSESSEE HAS NOT BEEN ABLE TO CONVINCE THE AO, WE ARE LEFT WITH NO CHOICE, BUT TO SUSTAIN THE ORDER OF THE AO. AS A CONSEQ UENCE, THE ORDER OF THE CIT(A) IS SET ASIDE. 16. IN THE RESULT, THE APPEAL IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 14 TH AUGUST, 2013. SD/- SD/- ( ) ( $## #% ) !' !' (RAJENDRA SINGH) (VIVEK VARMA) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI, DATE: 14 TH AUGUST, 2013 / COPY TO:- 1) / THE APPELLANT. 2) / THE RESPONDENT. 3) ! !' ( ) XXXIII, MUMBAI / THE CIT (A)- XXXIII , MUMBAI. 4) ! !' /DIT(IT)/CONCERNED , MUMBAI / THE DIT(IT)/ CONCERNED , MUMBAI 5) #$% & ' , ! & , ()* / THE D.R. L BENCH, MUMBAI. 6) %+ , COPY TO GUARD FILE. !-./ / BY ORDER / / TRUE COPY / / [ 0 / 1 )2 ! & , ()* DY. / ASSTT. REGISTRAR I.T.A.T., MUMBAI *451 . . * CHAVAN, SR. PS