ACIT (International Taxation), New Delhi V. M/s. LS Cable and System Ltd., Gurgaon

ITA 5900/DEL/2016

• Counselvise Citation: [2018] 126 COUNSELVISE.COM (IT) 4137 (ITAT-DELHI)
• Duration Of Justice: 1 year(s) 1 month(s) 24 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-01-2018
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: D
• Assessment Year: 2014-2015
• Appeal Filed On: 18-11-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: G K DHALL
• Keywords: Double taxation relief; Permanent establishment; Tax effect

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH D NEW DELHI BEFORE SHRI R.K.PANDA, ACCOUNTANT MEMBER AND SMT. BEENA A. PILLAI, JUDICIAL MEMBER ITA NO. 5900/DEL/2016 (ASSESSMENT YEAR: 2014 -15) ACIT (INTERNATIONAL TAXATION), CIRCLE-2(2)(1), ROOM NO.411, 4 TH FLOOR, E-2 BLOCK, DR. S.P.MUKHERJEE, CIVIC CENTRE, MINTO ROAD, NEW DELHI- 110002. VS LS CABLE & SYSTEM LTD., 328, 3 RD FLOOR, DLF STAR TOWER, SECTOR-30, GURGAON-122002. PAN-AAACL6446Q (APPELLANT) (RESPONDENT) APPELLANT BY SH. SPARSH BHARGAVA, MS. ISHITA FARSAIYA, ADV. RESPONDENT BY SH. G.K.DHALL, CIT DR DATE OF HEARING 08.01.2018 DATE OF PRONOUNCEMENT 12.01.2018 ORDER PER R.K.PANDA, ACCOUNTANT MEMBER THIS APPEAL FILED BY THE REVENUE IS DIRECTED AGAIN ST THE ORDER DATED 22.09.2016 OF THE LD. CIT(A)-43, NEW DELHI RE LATING TO ASSESSMENT YEAR 2014-15. 2. THE ONLY EFFECTIVE GROUND RAISED BY THE REVENUE READS AS UNDER:- 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, WHETHER THE LD.CIT(A) ERRED HOLDING THAT THE INCOME OF M/S L S CABLE AND SYSTEMS LTD. FROM OFFSHORE SUPPLY OF CABLES IS NOT TAXABLE IN INDIA. ITA NO. 5900/DEL/2016 PAGE | 2 3. FACTS OF THE CASE, IN BRIEF, ARE THAT THE ASSESS EE IS A COMPANY INCORPORATED IN KOREA AND IS ENGAGED IN THE EXECUTI ON OF VARIOUS PROJECTS IN INDIA. DURING THE FY 2013-14, THE COMP ANY HAS EXECUTED 29 PROJECTS IN INDIA, THE DETAILS OF WHICH IS GIVEN AT PAGE 2 OF THE ASSESSMENT ORDER. THE ASSESSEE FILED ITS RETURN OF INCOME ON 28.11.2014 DECLARING TAXABLE INCOME OF RS.49,88,35, 664/-. IT WAS CLAIMED BY THE ASSESSEE DURING THE ASSESSMENT PROCE EDINGS THAT INDIAN CONCERNS HAD IMPORTED CERTAIN MATERIALS FROM LSCL, KOREA AND HAD DEDUCTED TAX AT SOURCE WHILE MAKING PAYMENTS TO LSCL. SINCE THE MATERIAL WAS SUPPLIED FROM OUTSIDE INDIA, NO INCOME ACCRUES OR ARISES IN INDIA AND NO INCOME IS TAXABLE IN INDIA. HOWEVE R, SINCE TAX HAS BEEN DEDUCTED, CREDIT FOR TAX DEDUCTED AT SOURCE AG AINST SUCH SUPPLIES WAS CLAIMED AS REFUND. 4. THE AO ASKED THE ASSESSEE TO SUBMIT THE COPY OF AGREEMENTS ENTERED INTO WITH VARIOUS PROJECT OWNERS AND ALSO A SKED THE ASSESSEE TO SHOW-CAUSE AS TO WHY ADDITIONS MADE IN PREVIOUS YEA R ON OFFSHORE SUPPLY SHOULD NOT BE MADE IN THIS YEAR. THE AO NOT ICED THAT ALL ACTIVITIES AND THE NATURE OF RECEIPTS IN RESPECT OF OFFSHORE SUPPLY ARE IDENTICAL TO THOSE IN PRECEDING YEARS I.E. 2004-05 TO 2009-10. HE OBSERVED THAT HIS PREDECESSORS HAS DEALT WITH THIS ISSUE IN GREAT DETAIL AND HAS ATTRIBUTED 50% OF THE INCOME RELATABLE TO O PERATIONS CARRIED OUT IN INDIA AND PROFIT RATE OF 20% WAS DEEMED ON E STIMATED BASIS. ITA NO. 5900/DEL/2016 PAGE | 3 THE AO OBSERVED THAT THE ASSESSEE HAD FILED APPLICA TIONS U/S 197 OF THE ACT FOR SEEKING NIL WITHHOLDING TAX CERTIFICATE S FOR PAYMENT RECEIVED UNDER THE OFFSHORE SUPPLY CONTRACTS FROM 2 015-16 FY. THE CERTIFICATES DATED 22.06.2015 AND 21.07.2015 WERE I SSUED AT EFFECTIVE RATE OF 4% ON PAYMENT MADE TO THE ASSESSEE UNDER OF FSHORE SUPPLY CONTRACTS, FOLLOWING THE PRECEDENCE OF ASSESSMENTS IN PREVIOUS YEAR WHEREIN 50% OF THE DEEMED PROFIT OF 20% WAS ATTRIB UTED TO INDIA. HE NOTED THAT THE ASSESSEE FILED AN APPLICATION U/S 26 4 OF THE ACT BEFORE THE LD. CIT WHO VIDE ORDER DATED 07.03.2016 HAS HEL D THAT IT WOULD BE REASONABLE TO ATTRIBUTE 25% OF THE INCOME RELATABLE TO THE OPERATIONS CARRIED OUT IN INDIA BOTH AS PER PROVISIONS OF SECT ION 9 OF THE I.T. ACT, 1961 AND ARTICLE 7 OF THE TAX TREATY BETWEEN INDIA AND KOREA. HE HAS FURTHER HELD THAT ON THE OFFSHORE SUPPLY, PROFIT RA TE OF 10% IS DEEMED TO BE ASSUMED. IN VIEW OF THE ABOVE, THE AO TAXED THE REVENUES FROM OFFSHORE SUPPLY BY CONSIDERING THE PROFIT RATE OF 1 0% AND ATTRIBUTING 25% OF PROFITS TO OPERATIONS CARRIED OUT IN INDIA. HE FURTHER HELD THAT FINAL TAX LIABILITY SHALL BE RESTRICTED TO 01% (INC LUSIVE OF SURCHARGE AND CESS) OF THE RECEIPTS AS PER DIRECTION OF LD.CIT(A) . HE ACCORDINGLY DETERMINED THE TOTAL INCOME OF THE ASSESSEE AT RS. 52,91,43,096/-. 4.1 IN APPEAL, LD.CIT(A) HELD THAT THE INCOME OF M/ S L.S.CABLE AND SYSTEM LTD. FROM OFFSHORE SUPPLY OF CABLES IS NOT T AXABLE IN INDIA. THE ITA NO. 5900/DEL/2016 PAGE | 4 RELEVANT OBSERVATION OF THE LD.CIT(A) FROM PARA 4 O NWARDS READ AS UNDER:- 4. FINDINGS/DETERMINATION I HAVE EXAMINED THE FACTS AT HAND. I HAVE HEARD TH E COUNSEL. THE APPELLANT HAS POINTED OUT THAT THE ISSUE STANDS COVERED BY TH E HON'BLE HIGH COURT IN APPELLANT'S OWN CASE. THE SUBMISSIONS AND YEAR-WISE STATUS HAS BEEN PROVIDED BY THE APPELLANT VIDE WRITE UP DATED 22.09 .2016 IS AS FOLLOWS:- 'OUR SUBMISSION IT IS RESPECTFULLY SUBMITTED THAT REVENUES EARNED B Y LS CABLE FROM OFFSHORE SUPPLY OF GOODS UNDER SUBJECT OFFSHORE SUPPLY CONTR ACT ARE NOT SUBJECT TO TAX IN INDIA BECAUSE TITLE AND RISK IN THE GOODS WAS PASSE D OUTSIDE INDIA. IT IS SUBMITTED LS CABLE HAS, IN ACCORDANCE WITH THE OFFS HORE SUPPLY CONTRACT, SUPPLIED GOODS FROM OUTSIDE INDIA. IN CONSIDERATION FOR SUCH SUPPLIES, LS CABLE HAS BEEN PAID CONSIDERATION OUTSIDE INDIA. THEREFOR E, SUCH CONSIDERATION IS NOT LIABLE TO TAX IN INDIA AS NO PART OF SUCH CONSIDERA TION COULD BE SAID TO RECEIVE OR DEEMED TO BE RECEIVED IN INDIA; ACCRUE OR ARISE; OR DEEMED TO ACCRUE OR ARISE TO LS CABLE IN INDIA. FURTHER, IT IS HUMBLY SUBMITTED THAT THE ISSUE OF T AXABILITY OF OFFSHORE SUPPLIES IS NO LONGER RES INTEGRA AND THE SAME STANDS COVERE D BY THE FOLLOWING MULTIPLE JUDGMENTS IN APPELLANT'S OWN CASE FOR VARIOUS AYS A S TABULATED BELOW:- ASSESSMENT YEAR DRP/CIT(A) ITAT HIGH COURT REFERENCE TO PAPER BOOK AY 2002 - 03 HELD OFFSHORE SUPPLY TAXABLE IN FAVOUR OF APPELLANT (HELD THAT OFFSHORE SUPPLIES ARE NOT TAXABLE IN INDIA) IN FAVOUR OF APPELLANT (HELD THAT OFFSHORE SUPPLIES ARE NOT TAXABLE IN INDIA) REFER PAGE NO.175 TO 275 OF PAPERBOOK AY 2003 - 04 HELD OFFSHORE SUPPLY TAXABLE IN FAVOUR OF APPELLANT (HELD THAT OFFSHORE SUPPLIES ARE NOT TAXABLE IN INDIA) IN FAVOUR OF APPELLANT (HELD THAT OFFSHORE SUPPLIES ARE NOT TAXABLE IN INDIA) REFER PAGE NO. 276 TO 320 OF PAPERBOOK AY 2004 - 05 HELD OFFSHORE SUPPLY TAXABLE IN FAVOUR OF APPELLANT (HELD THAT OFFSHORE SUPPLIES ARE NOT TAXABLE IN INDIA) IN FAVOUR OF APPELLANT (HELD THAT OFFSHORE SUPPLIES ARE NOT TAXABLE IN INDIA) REFER PAGE NO. 276 TO 320 OF PAPERBOOK AY 2005 - 06 HELD OFFSHORE SUPPLY IN FAVOUR OF APPELLANT IN FAVOUR OF APPELLANT (HELD THAT OFFSHORE REFER PAGE NO. 276 TO 320 OF PAPERBOOK ITA NO. 5900/DEL/2016 PAGE | 5 TAXABLE (HELD THAT OFFSHORE SUPPLIES ARE NOT TAXABLE IN INDIA) SUPPLIES ARE NOT TAXABLE IN INDIA) AY 2006 - 07 HELD OFFSHORE SUPPLY TAXABLE IN FAVOUR OF APPELLANT (HELD THAT OFFSHORE SUPPLIES ARE NOT TAXABLE IN INDIA) REFER PAGE NO. 321 TO 347 OF PAPERBOOK AY 2007 - 08 HELD OFFSHORE SUPPLY TAXABLE IN FAVOUR OF APPELLANT (HELD THAT OFFSHORE SUPPLIES ARE NOT TAXABLE IN INDIA) REFER PAGE NO. 348 TO 354 OF PAPERBOOK AY 2008 - 09 HELD OFFSHORE SUPPLY TAXABLE IN FAVOUR OF APPELLANT (HELD THAT OFFSHORE SUPPLIES ARE NOT TAXABLE IN INDIA) REFER PAGE NO. 355 TO 362 OF PAPERBOOK AY 2009 - 10 IN FAVOUR OF APPELLANT (HELD THAT OFFSHORE SUPPLIES ARE NOT TAXABLE IN INDIA) REFER PAGE NO. 363 TO 374 OF PAPERBOOK AY 2010 - 11 NO ADDITIONS MADE IN THE ASSESSMENT ORDER (HELD THAT OFFSHORE SUPPLIES ARE NOT TAXABLE IN INDIA ON THE B ASIS OF AAR ORDER) REFER PAGE NO. 384 TO 409 OF PAPERBOOK AY 2011 - 12 NO ADDITIONS WERE MADE IN THE ASSESSMENT ORDER (HELD THAT OFFSHORE SUPPLIES ARE NOT TAXABLE IN INDIA ON THE B ASIS OF AAR ORDER) REFER PAGE NO. 410 TO 427 OF PAPERBOOK WE HAVE BRIEFLY DISCUSSED BELOW OBSERVATIONS OF APP ELLATE AUTHORITIES IN APPELLANT'S CASE: OBSERVATIONS OF HON'BLE ITAT AND HIGH COURT IN THE ORDERS FOR AY 2002-03 OBSERVATIONS OF HON'BLE ITAT: THE FACTS OF THE CASE ARE COVERED BY THE DECISION OF HON'BLE SUPREME COURT IN THE CASE OF ISHIKAWAJIMA HARIMA HEAVY INDU STRIES VS DIT (288 ITR 408). THE RELEVANT EXTRACT FROM THE ORDER OF ITAT I S REPRODUCED AS UNDER: '12. ON CONSIDERATION OF FACTS AND CIRCUMSTANCES OF THE CASE, WE ARE OF VIEW THAT CONTENTIONS OF LEARNED COUNSEL FOR THE AS SESSEE ARE WELL TAKEN ....... IN THE LIGHT OF ABOVE BACKGROUND, IT IS NEI THER POSSIBLE NOR PERMISSIBLE FOR THE REVENUE TO CONTEND THAT ABOVE D ECISION OF SUPREME ITA NO. 5900/DEL/2016 PAGE | 6 COURT IS NOT APPLICABLE TO THE FACTS OF THE CASE. T HE SUPREME COURT AFTER CONSIDERING ALMOST IDENTICAL FACTS AND CIRCUMSTANCE S AND EVEN WHEN THERE WAS ONE AGREEMENT BOTH FOR SUPPLY AND ERECTIO N OF EQUIPMENT HELD THAT INCOME FROM OFFSHORE SUPPLY OF MATERIAL EQUIPM ENT DID NOT ARISE IN INDIA AND WAS NOT TAXABLE. ' BASED ON APPRECIATION OF CLAUSE 31, 1 OF THE GENE RAL CONDITIONS OF CONTRACT (WHICH STATES THAT OWNERSHIP IN GOODS TO B E IMPORTED TO INDIA SHALL BE TRANSFERRED TO THE PGCIL UPON LOADING ONTO THE MODE OF TRANSPORT TO BE USED TO CONVEY THE GOODS FROM THE COUNTRY OF ORIGIN TO INDI A) AND PROVISIONS OF SALES OF GOODS ACT, 1930 HELD THAT PROPERTY IN THE GOODS WAS TRANSFERRED OUTSIDE INDIA. THE RELEVANT EXTRACT FROM THE ORDER IS REPRODUCED A S UNDER: 13.2 ALL THE CIRCUMSTANCES MENTIONED ABOVE ARE FUL LY SATISFIED IN THE PRESENT CASE ALSO AS GOODS WERE ASCERTAINED AND DEL IVERED TO SHIP FOR TRANSPORTATION TO INDIA, BILL OF LADING WAS ALSO HA NDED OVER TO THE BANK NOMINATED BY THE ASSESSEE AND PAYMENT WAS ALSO RECE IVED OUTSIDE INDIA. THE PROPERTY IN GOODS GOT TRANSFERRED TO THE BUYER AND SALE WAS COMPLETED. WITH THE COMPLETION OF THE SALE, INCOME ACCRUED AND THAT ACCRUAL WAS OUTSIDE INDIA. ACCRUAL OF SUCH INCOME W AS NOT ATTRIBUTABLE TO ANY OPERATION CARRIED OUT IN INDIA. THEREFORE, C ONTENTION OF THE ASSESSEE THAT INCOME FROM OFFSHORE CONTRACT FOR SUP PLY ETC DID NOT ARISE IN INDIA AND PROVISIONS OF INDIAN INCOME-TAX ACT HA D NO APPLICATION IS WELL FOUNDED AND IS REQUIRED TO BE ACCEPTED.' THE PERMANENT ESTABLISHMENT (PE') OF THE APPELLAN T HAD NO ROLE TO PLAY IN OFFSHORE SUPPLY OF GOODS AND MERE SIGNING OF AGREEM ENT IN INDIA DOES NOT GIVE RISE TO ANY INCOME TRI INDIA. THE RELEVANT EXTRACT FROM THE ORDER IS REPRODUCED AS UNDER: 13.4 THERE IS NO MATERIAL TO SHOW THAT PE OF ATE ASSESSEE IN INDIA HAD ANY ROLE TO PLAY IN SUPPLY OF OFFSHORE EQUIPMENT. W E HAVE ALREADY NOTED THAT EVEN IF AGREEMENT FOR SUPPLY OF EQUIPMENT WAS ENTERED INTO INDIA, THE MERE SIGNING OF AGREEMENT OF SUPPLY DID NOT GI VE RISE TO ANY INCOME.. THE PERFORMANCE OF DUTIES UNDER INSTALLATION/EREC TION CONTRACT CANNOT POSTPONE THE TRANSFER OF PROPERTY. THE ITAT ALSO OB SERVED THAT NON-PAYMENT OF ITA NO. 5900/DEL/2016 PAGE | 7 ENTIRE CONSIDERATION ON SHIPMENT CANNOT PREVENT TRA NSFER OF TITLE IN GOODS. THE RELEVANT EXTRACT FROM THE ORDER IS REPRODUCED AS UN DER: 13.5 .... THEREFORE, PERFORMANCE OF DUTIES MENTION ED IN THE ERECTION CONTRACT CANNOT POSTPONE THE TRANSFER OF PROPERTY U/S 24 REA D WITH PARA 31.2 OF THE AGREEMENT. NONE OF THE ACTIVITIES STATED IN THE ERE CTION CONTRACT CAN BE TAKEN AS VESTING THE SELLER WITH A RIGHT OF DISPOSAL OF E QUIPMENT OR RIGHT TO TAKE BACK THE EQUIPMENT, WHICH HE IS DEEMED TO HAVE UNCONDITI ONALLY APPROPRIATE AT THE TIME OF DELIVERY TO THE SHIP. IN THE PRESENT AGREEM ENT THE SELLER WAS TO BE PAID PRICE OF THE GOODS AS STIPULATED IN THE AGREEMENTS. ALTHOUGH ENTIRE CONSIDERATION IS NOT PAID ON SHIPMENT OF EQUIPMENT, BUT NON PAYMENT OF PRICE CANNOT PREVENT TRANSFER OF EQUIPMENT. THE WARRANTIES GIVEN IN THE CONTRACT RELATING TO SATISFACTORY PERFORMANCE OF EQUIPMENT ARE NORMAL WARRANTEES TO SECURE PERFOR MANCE BY THE BUYER AND CANNOT BE READ AS CONDITION ENTITLING THE SELLER TO REPUDIATE CONTRACT. THE RELEVANT EXTRACT FROM THE ORDER OF ITAT IS REPRODUC ED AS UNDER: 15.....OTHER ASSURANCES AND WARRANTEES GIVEN IN TH E AGREEMENT RELATING TO SATISFACTORY PERFORMANCE OF EQUIPMENT ARE NORMAL WA RRANTEES TO SECURE PERFORMANCE BY THE BUYER AND CANNOT BE READ AS COND ITION ENTITLING THE SELLER TO REPUDIATE CONTRACT AND HAVE THE GOODS BACK OR RE STORED TO HIM. OBSERVATIONS OF HIGH COURT ('HC') THERE IS NO JUSTIFICATION OF MIXING THE OFFSHORE AND THE ONSHORE CONTRACTS AS BOTH THE AGREEMENTS WERE ALTOGETHER DIFFERENT IN TERMS OF THEIR SCOPE AND INDEPENDENT OF EACH OTHER. RELEVANT EXTRACT OF THE JUDGMENT OF THE HC IS REPRODUCED HEREIN BELOW: 18. FURTHERMORE, AS NOTICED ABOVE, THE SCOPE OF WO RK UNDER THE ONSHORE CONTRACT WAS UNDER A SEPARATE AGREEMENT AND FOR A S EPARATE CONSIDERATION. THERE IS NO JUSTIFICATION TO MIX THE CONSIDERATION FOR THE OFFSHORE AND ONSHORE CONTRACTS. WHEN THE EQUIPMENT WAS TRANSFERRED OUTSI DE INDIA, NECESSARILY THE TAXABLE INCOME ALSO ACCRUED OUTSIDE INDIA, AND HENC E, NO PORTION OF SUCH INCOME WAS TAXABLE IN INDIA. THE PE HAD NO ROLE TO PLAY IN OFFSHORE SUPPLIES A ND THE SAME WAS INVOLVED IN ONSHORE CONTRACT ONLY. RELEVANT EXTRACT OF THE HE JUDGMENT IN THIS REGARD IS REPRODUCED HEREIN BELOW: ITA NO. 5900/DEL/2016 PAGE | 8 '36. WITH REGARD TO THE SETTING UP OF PERMANENT EST ABLISHMENT ALSO, THE PE OF THE RESPONDENT IN THE INSTANT CASE, AS IN ISHIKAWAJ IMA (SUPRA), HAD NO ROLE TO PLAY IN THE EXECUTION OF THE OFFSHORE SUPPLY CONTRA CT AND AS A MATTER OF FACT WAS SET UP FOR THE SOLE PURPOSE OF ENABLING THE PER FORMANCE OF THE ONSHORE SERVICES CONTRACT. THE QUESTION OF SALE CONCLUDING IN INDIA DOES NOT ARISE AT ALL AS THE CONTRACT CLAUSE CLEARLY STIPULATES THAT TITLE IN GO ODS WOULD TRANSFER AT THE PORT OF SHIPMENT AT THE TIME OF LOADING THE GOODS ONTO T HE SHIP. THE SALE THUS CONCLUDES AT THAT VERY MOMENT AS THERE IS NO CLAUSE IN THE AGREEMENT WHICH STIPULATES THAT THE ASSESSEE COULD REVOKE THE TITLE FROM THE BUYER. RELEVANT EXTRACT OF THE JUDGMENT IS REPRODUCED BELOW: 35. .THE TITLE TO THE EQUIPMENT SUPPLI ED FROM OUTSIDE INDIA WAS TRANSFERRED IN FAVOR OF PGCIL OUTSIDE IND IA. IN THE CASE OF ISHIKAUIAJIMA (SUPRA), IT WAS TRANSFERRED IN THE CO UNTRY OF ORIGIN ITSELF AS SOON AS THE GOODS WERE LOADED UPON THE MODE OF TRANSFER TO BE USED TO CONVEY THE PLANT AND MACHINERY, I.E. THE SHIPPING VESSEL, EVEN PRIOR TO THE GOODS REACHING THE HIGH SEAS.' OBSERVATIONS OF HON'BLE ITAT AND HIGH COURT IN THE ORDERS FOR AY 2003- 04. 2004-05 AND 2005-06 OBSERVATIONS OF HON'BLE ITAT: IN PASSING THE JUDGMENT FOR AY 2002-03, THE ITAT HAD GONE THROUGH THE RELEVANT CLAUSES OF BOTH THE OFFSHORE AND ONSHORE C ONTRACTS. RELEVANT EXTRACT OF THE ITAT'S ORDER FOR AYS 2002-03, 2003-04 AND 2004- 05 IS REPRODUCED HEREIN BELOW: WE FIND THAT THE ISSUE IS SQUARELY COVERED BY THE DECISION OF THE ITAT IN ASSESSEE'S OWN CASE REPORTED AS LG CABLES VS. DY. D IRECTOR OF INCOME-TAX, CIRCLE 1 (1), INTERNATIONAL TAXATION, NEW DELHI (11 3 ITD 113). THE CONTENTION OF THE REVENUE IS THAT THE TWO AGREEMENTS I.E. ONSHORE SERVICES AGREEMENT AND OFFSHORE SUPPLY AGREEMENT WERE PART AND PARCEL OF O NE CONTRACT AND THIS FACT WAS NOT BROUGHT TO THE NOTICE OF THE ITAT. WE FIND THAT THE ITAT WHILE DECIDING THE ISSUE HAS THREAD-BARE GONE THROUGH THE VARIOUS TERMS AND CONDITIONS OF BOTH THE AGREEMENTS. ' IN PASSING THE JUDGMENT FOR A Y 2002-03 THE ITA T HAS ANALYSED THE FACTS OF THE CASE IN LIGHT OF THE APPLICABLE PROVIS IONS OF THE ACT AND THE TAX ITA NO. 5900/DEL/2016 PAGE | 9 TREATY BETWEEN INDIA AND KOREA. ONLY AFTER SUCH ANA LYSIS DID THE ITAT REACH AT THE CONCLUSION THAT THE APPELLANT IS NOT TAXABLE ON INCOME FROM EXECUTION OF OFFSHORE SUPPLY CONTRACT. RELEVANT EXTRACT OF THE I TAT'S ORDER FOR AYS 2002-03, 2003-04 AND 2004-05 IS REPRODUCED BELOW: 'REVENUE'S OBJECTIONS WERE BASED ON LACK OF PROPER APPRECIATION OF THE TERMS OF THE AGREEMENT AND PROVISIONS OF SALE OF GOODS ACT. THERE WAS NO MATERIAL TO SHOW THAT THE FE OF THE ASSESSEE IN INDIA HAD ANY R OLE TO PLAY IN SUPPLY OF OFFSHORE EQUIPMENT. IT IS CORRECT THAT ASSESSEE DID NOT RECEIVE 100% OF PRICE OF OFFSHORE SUPPLY OF GOODS OUTSIDE INDIA BUT IT IS UN DISPUTED THAT PGCIL ISSUED IRREVOCABLE LETTER OF CREDIT IN FAVOUR OF THE APPEL LANT AND THAT UNDER PARA 31.2 AGREED THAT PROPERTY IN GOODS WILL PASS TO THE BUYE R AS AND WHEN THE ASSESSEE LOADS THE EQUIPMENT ON THE MODE OF TRANSPO RT FOR TRANSPORTATION FROM THE COUNTRY OF ORIGIN. THE QUESTION TO BE ASKED WAS HAVING APPROPRIATED IN THE GOODS BY DELIVERY TO THE SHIP WAS THERE ANY RIGHT W ITH THE SELLER OF DISPOSAL OF GOODS. IS THERE ANY CONDITION UNDER WHICH THE SELLE R COULD KEEP CONTROL OF THE GOODS AND RETAKE THE GOODS. THERE IS NO SUCH CONDIT ION IN THE AGREEMENT AND, THEREFORE, SALE OF GOODS AS FOR AS BUYER WAS CONCER NED, WAS COMPLETE AND UNEQUIVOCAL. THE PROPERTY IN THE EQUIPMENT PASSED T O THE BUYER AS STIPULATED IN PARA 31.2 OF THE AGREEMENT.' RELEVANT EXTRACT OF THE ITAT'S JUDGMENT FOR AYS 2 003-04, 2004-05 AND 2005-06 IN CONNECTION WITH INDIAN AGENT IS REPRODUC ED BELOW: 'AS REGARDS THE ROLE OF INDIA AGENT IN OVERSEAS SUP PLY THE CONTENTION OF THE ASSESSEE IS THAT LD. CIT(A) HAS NOT BEEN ABLE TO PO INT OUT EXACTLY WHAT OPERATIONS RELATING TO OFF-SHORE SUPPLY WERE CARRIE D OUT BY THE INDIAN AGENT WHEN IT IS A MATTER OF RECORD THAT THE GOODS WERE M ANUFACTURED ABROAD AND DISPATCHED FROM THE FOREIGN PORT. THE SERVICES HAVE BEEN PROVIDED BY THE INDIAN AGENT WITH REFERENCE TO ONSHORE CONTRACT. WE ARE IN AGREEMENT WITH THE ARGUMENTS ADVANCED BY THE LD. AR OF THE ASSESSEE. ' THE SALE OF GOODS WAS COMPLETED OUTSIDE INDIA. R ELEVANT EXTRACT OF THE JUDGMENT IS REPRODUCED BELOW: '10. THE TRIBUNAL WHILE DECIDING THE CASE FOR AY 2002-03 HAS HELD THAT SINCE DELIVERY OF GOODS, DOCUMENTS, AND RECEIPT OF SUBSTANTIAL PART OF SALE CONSIDERATION DID TAKE PLACE OUTSIDE INDIA WHERE TH E SALE TOOK PLACE AND INCOME HAD ACCRUED, SUCH INCOME COULD ONLY BE TAXED OUTSIDE INDIA AND NOT ITA NO. 5900/DEL/2016 PAGE | 10 UNDER INDIAN LAWS. HENCE, INCOME FROM OFFSHORE CONT RACTS IS NOT TAXABLE IN INDIA. ) OBSERVATIONS OF HON'BLE HIGH COURT THE HON'BLE DELHI HIGH COURT RELYING ON ITS PREVI OUS DECISION FOR AY 2002-03 AND HELD THAT OFFSHORE SUPPLY IS NOT TAXABL E IN INDIA. RELEVANT EXTRACT FROM THE JUDGEMENT IS REPRODUCED AS UNDER: THUS, THE AFORESAID ARGUMENTS OF THE LEARNED COUNS EL FOR THE REVENUE IS NOT ACCEPTABLE AND THERE IS NO REASON TO CHANGE THE DEC ISION ARRIVED AT IN THE CASE OF LG CABLE LTD. (SUPRA) IN ITA NO. 703 OF 2009.' OBSERVATIONS OF HON'BLE CIT(A) AND ITAT IN THE ORDE RS FOR AY 2006-07 OBSERVATIONS OF HON 'BLE CIT(A) THE HON'BLE CIT(A) OBSERVED THAT THERE IS NO CHAN GE IN FACTS FOR THIS YEAR. THEREFORE, FOLLOWING THE DECISIONS OF ITAT AN D HIGH COURT IN APPELLANT'S OWN CASE FOR EARLIER YEARS, THE HON'BLE CIT(A) HELD THAT OFFSHORE SUPPLY IS NOT TAXABLE. RELEVANT EXTRACT FROM THE ORDER IS REPRODU CED AS UNDER: 10. THE FACTS OF THE CASE OF THE YEAR UNDER CONSID ERATION ARE SIMILAR TO THE FACTS OF THE EARLIER YEARS. THE AO WHILE MAKING THI S ADDITION FOR THE CURRENT YEAR HAS RELIED ON THE ORDER OF ASSESSMENT ORDER FO R AY 2005-06 (PARA 4.6 & 5 OF THE ASSESSMENT ORDER). RESPECTFULLY FOLLOWING TH E ORDER THE JURISDICTIONAL ITAT AND THE ORDER OF THE HON'BLE DELHI HC IN APPEL LANT'S OWN CASE FOR THE EARLIER YEARS AS DISCUSSED IN THE PRECEDING PARAGRA PHS, IT IS HELD THAT THE INCOME OF THE APPELLANT FROM OFFSHORE SUPPLIES IS N OT TAXABLE IN INDIA. ' OBSERVATIONS OF HON'BLE ITAT THE HON'BLE ITAT FOLLOWING THE DECISION OF HON'BL E HIGH COURT OF DELHI IN APPELLANT'S OWN CASE FOR AY 2002-03 CONFIRMED THE A BOVE ORDER OF HON'BLE CIT(A). RELEVANT EXTRACT FROM THE JUDGEMENT IS REPR ODUCED AS UNDER: 5.1. IN VIEW OF THE ABOVE, SINCE THE MATTER HAS BE EN EFFECTIVELY DECIDED IN FAVOUR OF THE ASSESSEE FOR A.Y. 2002-03, HOLDING TH AT THE RECEIPTS FROM OFFSHORE SUPPLY EQUIPMENT ARE NOT TAXABLE IN INDIA, WE FIND NO FLAW IN THE IMPUGNED ORDER, WHEREIN THE LEARNED CIT(A) HAS FOLLOWED THE AFORESAID HIGH COURT ORDER IN ASSESSEE'S OWN CASE FOR A.Y. 2002-03. IT IS PERT INENT TO STRESS HERE, AS NOTED BY THE LEARNED CIT(A), THAT THE TRIBUNAL VIDE ITS O RDER DATED 13-8-2010, IN THE ASSESSEE'S CASE FOR A. Y. 2003-04 TO 2005-06, AGAIN DELETED THE ADDITION. ON SIMILAR LINES. ITA NO. 5900/DEL/2016 PAGE | 11 OBSERVATIONS OF HON'BLE ITAT IN THE ORDER FOR AY 20 07-08 THE HON'BLE ITAT FOLLOWING ITS OWN DECISION IN AP PELLANT'S CASE FOR AY 2002-03 TO 2005-06 AND ORDER OF HON'BLE HIGH COURT OF DELHI IN APPELLANT'S OWN CASE FOR AY 2002-03 HELD THAT OFFSHORE SUPPLY I S NOT TAXABLE IN INDIA. RELEVANT EXTRACT FROM THE JUDGEMENT IS REPRODUCED A S UNDER: '3. IT IS THE COMMON SUBMISSION OF BOTH THE PARTIES THAT THE ISSUE INVOLVED IN CURRENT YEAR IS COVERED BY THE DECISION OF THIS TRI BUNAL IN ASSESSEE'S OWN CASE FOR ASSESSMENT YEAR 2002-03 REPORTED IN 314 ITR 301 (DEL.) (ITAT). AND ITAT'S SUBSEQUENT DECISION IN ASSESSEE'S OWN CASE FOR ASSE SSMENT YEAR 2003-04 TO 2005-06 IN 1. T.A. NO.3634, 3635 & 3636 OF 2009. IT HAS BEEN FURTHER SUBMITTED BY THE LD AR FOR THE ASSESSEE THAT THE DE CISION OF THIS TRIBUNAL IN ASSESSMENT YEAR 2002-03 HAS BEEN CONFIRMED BY JURIS DICTIONAL HIGH COURT IN THEIR JUDGMENT DATED 24.12.2010 IN I.T.A. NO. 703/2 009. 4. IN VIEW OF THE ABOVE, GROUND NO. (I) TAKEN BY TH E ASSESSEE IS DECIDED IN FAVOUR OF THE ASSESSEE I.E. GROUND NO. (I) IS ALLOW ED.' OBSERVATIONS OF HON'BLE ITAT IN THE ORDER FOR AY 20 08-09 THE HON'BLE ITAT FOLLOWING THE AFOREMENTIONED DE CISIONS OF ITAT AS WELL AS JURISDICTIONS HIGH COURT HELD THAT OFFSHORE SUPP LY IS NOT TAXABLE IN INDIA. THOUGH, THE LEARNED DEPARTMENT REPRESENTATIVE ARGUE D THAT THE DEPARTMENT HAS CHALLENGED THE ORDER OF HIGH COURT BEFORE THE S UPREME COURT. HOWEVER, THE HON'BLE ITAT OBSERVED THAT DECISION OF JURISDIC TIONAL HIGH COURT IS BINDING UPON THE AUTHORITIES AND TRIBUNALS WORKING UNDER IT S TERRITORIAL JURISDICTION AND ACCORDINGLY, DECIDED THE ISSUE IN FAVOUR OF THE APPELLANT. RELEVANT EXTRACT FROM THE JUDGEMENT IS REPRODUCED AS UNDER: '4. WE HAVE HEARD BOTH THE SIDES, CONSIDERED THE MA TERIAL ON RECORD AS WELL AS PRECEDENTS RELIED UPON BY LD. COUNSEL FOR THE ASSES SEE. WE FIND THAT THE ISSUES INVOLVED IN THIS APPEAL ARE SQUARELY COVERED IN FAVOUR OF THE ASSESSEE AS IS CLEAR FROM VARIOUS DECISIONS OF ITAT AS WELL AS OF JURISDICTIONAL HIGH COURT IN ASSESSEE'S OWN CASE WHICH FACT HAS NOT BEE N REFUTED BY THE LD.DR TOO. THE AGREEMENT INVOLVED IN EARLIER DECISIONS AS WELL AS IN THE CASE IN HAND IS THE SAME WHICH HAS BEEN TAKEN INTO CONSIDERATION TO DECIDE THE ISSUES IN FAVOUR OF THE ASSESSEE AND THIS FACT TOO HAS NOT BE EN REFUTED BY LD.DR EXCEPT CONTENDING THAT SLP IS PENDING BEFORE THE HON'BLE S UPREME COURT. SINCE, JURISDICTIONAL HIGH COURT DECISION IS BINDING UPON THE AUTHORITIES AND THE ITA NO. 5900/DEL/2016 PAGE | 12 TRIBUNALS WORKING UNDER ITS TERRITORIAL JURISDICTIO N. THEREFORE, FOLLOWING THE PRECEDENTS AS LAID DOWN BY THE HON'BLE HIGH COURT A S WELL US BY DIFFERENT BENCHES OF THE ITAT, WE DECIDE THE ISSUES IN FAVOUR OF THE ASSESSEE WHILE ACCEPTING THE APPEAL.' (EMPHASIS SUPPLIED) OBSERVATIONS OF HON'BLE AAR IN APPELLANT'S CASE FURTHER, WE WISH TO BRING TO YOUR KIND ATTENTION ORDER DATED 26 JULY 2011 OF THE HON'BLE AAR IN APPELLANT'S OWN CASE (AA R NO. 858-861 OF 2009) WHEREIN THE HON'BLE AAR RELYING ON THE DECISION OF HON'BLE SUPREME COURT IN CASE OF ISHIKAWAJIMA HARIMA HEAVY INDUSTRIES (288 I TR410) ADOPTED CONSISTENT VIEW THAT OFFSHORE SUPPLY IS NOT TAXABLE IN INDIA. RELEVANT EXTRACT FROM THE ORDER OF HON'BLE AAR IS REPRODUCED AS UNDE R: 7 INCOME OF SIMILAR NATURE EARNED BY A NON-RESIDEN T WAS HELD TO BE NOT TAXABLE IN INDIA BY THIS AUTHORITY IN THE CASE OF H YOSUNG CORPORATION, 314 ITR 343, WHERE ALL THESE ISSUES WERE CONSIDERED AT LENG TH FOLLOWING THE BINDING DECISION OF THE HON'BLE SUPREME COURT IN ISHIKAWAJI MA HARITNA HEAVY INDUSTRIES, 288 ITR 410. AT THE OUTSET IT MAY BE ST ATED THAT THIS AUTHORITY IS NOT FREE TO DISREGARD THE LAW LAID DOWN BY THE SUPR EME COURT AND TO HAVE A FRESH LOOK INTO THE MATTER. THE CLAUSES IN THE OFFS HORE SUPPLY CONTRACT AGREEMENT REGARDING THE TRANSFER OF OWNERSHIP, THE PAYMENT MECHANISM IN THE FORM OF LETTER OF CREDIT WHICH ENSURES THE CREDIT O F THE AMOUNT IN FOREIGN CURRENCY TO THE APPLICANT'S FOREIGN BANK ACCOUNT ON RECEIPT OF SHIPMENT ADVICE AND INSURANCE CLAUSE, WOULD GO TO ESTABLISH THAT TH E TRANSACTION OF SALE AND THE TITLE TOOK PLACE OUTSIDE INDIAN TERRITORY. THE OWNERSHIP AND PROPERTY IN GOODS PASSED OUTSIDE INDIA. THE TRANSIT RISK BORNE BY THE APPLICANT TILL THE GOODS REACH THE SITE IN INDIA IS NOT NECESSARILY IN CONSISTENT WITH THE SALE OF GOODS TAKING PLACE OUTSIDE INDIA. THE PARTIES MAY D ECIDE BETWEEN THEM AS TO WHEN THE TITLE OF THE GOODS SHOULD PASS. AS THE CON SIDERATION FOR THE SALE PORTION IS SEPARATELY SPECIFIED, IT CAN WE II BE SE PARATED FROM THE WHOLE AS IS HELD IN THE CASE OF ISHIKAWAJIMA. IN THE CASE OF AN SALDO ENERGIA SPA RELIED ON BY THE REVENUE) THE CONTRACT FOR OFFSHORE SUPPLY AW ARDED TO THE ASSESSEE WAS HELD TO BE A COMPOSITE CONTRACT TOGETHER WITH ONSHO RE SUPPLY CONTRACT ETC. AWARDED TO ANOTHER. THE TURNKEY PROJECT AS A WHOLE WAS AWARDED TO THE APPLICANT WHO WAS NOT A SINGLE BIDDER. THEREAFTER T HE CONTRACT WAS SPLIT UP. IN ITA NO. 5900/DEL/2016 PAGE | 13 THAT CASE THE TRIBUNAL FOUND THAT THERE WAS A FACAD E CREATED FOR THE PURPOSE OF AVOIDING TAX AND THAT THERE WAS PRICE IMBALANCE IN THE CONTRACTS AND THAT IT WAS SKEWED IN FAVOUR OF THE OFFSHORE SUPPLY CONTRAC T IN ORDER TO MINIMIZE THE TAX LIABILITY. THERE IS NO SUCH CASE BEFORE US. THE REFORE, THE FACTS ARE DIFFERENT FROM THE FACTS OF THE PRESENT CASE. NOTHING IN LAW PREVENTS THE PARTIES TO ENTER INTO A CONTRACT WHICH PROVIDES FOR SALE OF MATERIAL FOR A SPECIFIED CONSIDERATION, ALTHOUGH THEY WERE MEANT TO BE UTILIZED IN THE FABR ICATION AND INSTALLATION OF A COMPLETE PLANT. REGARDING THE REVENUE'S PLEA THAT A S THE APPLICANT HAS A PE IN INDIA, THE INCOME ARISING SHOULD BE TAXED IN INDIA, IT STATED THAT THE EXISTENCE OF PE WOULD BE FOR THE PURPOSE OF CARRYING OUT THE CONTRACT FOR ONSHORE SUPPLIES AND SERVICES ETC. BUT SUCH A PE WOULD HAVE NO ROLE TO PLAY IN OFFSHORE SUPPLIES. EVEN IF A PE IS INVOLVED IN CARRYING ON SOME INCIDE NTAL ACTIVITIES SUCH AS CLEARANCE FROM THE PORT AND TRANSPORTATION, IT CANN OT BE SAID THAT THE PE IS IN CONNECTION WITH THE OFFSHORE SUPPLIES. WE ACCORDING LY HOLD THAT THE APPLICANT IS NOT LIABLE TO TAX IN RESPECT OF OFFSHORE SUPPLIE S AS PER THE ACT. (EMPHASIS SUPPLIED) OBSERVATIONS OF HON'BLE CIT(A) IN THE ORDER FOR AY 2009-10 THE HON'BLE CIT(A) OBSERVED THAT THERE IS NO CHAN GE IN FACTS FOR THIS YEAR. THEREFORE, FOLLOWING THE DECISIONS OF ITAT AN D HIGH COURT IN APPELLANT'S OWN CASE FOR EARLIER YEARS, THE HON'BLE CIT(A) HELD THAT OFFSHORE SUPPLY IS NOT TAXABLE. RELEVANT EXTRACT FROM THE ORDER IS REPRODU CED AS UNDER: '8.2 THE FACTS OBTAINING IN THE YEAR UNDER CONSIDER ATION ARE SIMILAR TO THE FACTS OF THE EARLIER YEARS. THE AO WHILE MAKING THIS ADDI TION FOR THE CURRENT YEAR HAS RELIED ON THE ORDER OF ASSESSMENT ORDER FOR EAR LIER YEARS (PARA 4. 6 & 5 OF THE ASSESSMENT ORDER). RESPECTFULLY FOLLOWING THE O RDER OF THE ITAT AND THE ORDER OF THE HON'BLE DELHI HC IN THE APPELLANT'S OW N CASE FOR THE EARLIER YEARS AS DISCUSSED IN THE PRECEDING PARAGRAPHS, IT IS HEL D THAT THE INCOME OF THE APPELLANT FROM OFF-SHORE SUPPLIES IS NOT TAXABLE IN INDIA. GROUND NO.1 IS THEREFORE, ALLOWED AND THE AO IS DIRECTED ACCORDING LY.' IN SUPPORT OF THE NON-TAXABILITY OF OFFSHORE SUPPLY , THE APPELLANT ALSO PLACES RELIANCE ON, AND INVITES THE ATTENTION OF YOUR GOOD SELF TO THE FOLLOWING JUDICIAL PRECEDENTS: ITA NO. 5900/DEL/2016 PAGE | 14 ISHIKAWAJMA-HARIMA HEAVY INDUSTRIES LTD. VS DIT [28 8 ITR 408 (SC)] THE APEX COURT IN THE SAID CASE CATEGORICALLY HELD THAT THE TITLE TRANSFER AND PAYMENT OUTSIDE INDIA SHALL BE DETERMINING FACTOR FOR THE PURPOSE OF TAXABILITY OF INCOME FROM OFFSHORE SUPPLY. THE APEX COURT VIDE PARA 99 HELD AS UNDER: ETR'99. WE, THEREFORE HOLD AS 'UNDER: RE: OFFSHORE SUPPLY: (2) SINCE ALL PARTS OR THE TRANSACTION IN QUESTION, I.E. THE TRANSFER OR PROPERTY IN GOODS AS WELL AS THE PAYMENT, WERE CARRIED ON OUTSI DE THE INDIAN SOIL, THE TRANSACTION COULD NOT HAVE BEEN TAXED IN INDIA.' THE SAID TWIN TEST HAS ALSO BEEN ACCEPTED BY THE HO N'BLE AAR AND A CONSISTENT VIEW HAS BEEN TAKEN TIME AND AGAIN BY TH E AUTHORITY IN THE FOLLOWING DECISIONS WHEREIN THE RATIO LAID DOWN BY HON'BLE APEX COURT IN CASE OF IHI HAS BEEN FOLLOWED. FURTHER, THE APPELLANT HAS PLACED RELIANCE ON THE F OLLOWING JUDGEMENTS: HYOSUNG CORPORATION (AAR NO. 773 OF 2008) CONFIRMED BY HIGH COURT (W.P.(C) NO. 2765/2010) JOINT STOCK COMPANY FOREIGN ECONOMIC ASSOCIATION 'T ECHNOPROMEXPORT' (AAR NO. 827 OF 2009) DIT VS. ERICSSON A.B. (DELHI HIGH COURT) (343 ITR 3 70) DIT VS. NOKIA NETWORKS OY [ITA NO. 512/ 2007; 1138/ 2006; 503/ 2007; 505/ 2007 - DELHI HIGH COURT NATIONAL PETROLEUM CONSTRUCTION COMPANY LIMITED VS. DIT [TS-29-HC-20 16(DEL)] DELHI HIGH COURT SEPCOIII ELECTRIC POWER CONSTRUCTION CORPORATION [A PPLICATION NO. 1 OF 2011 IN AAR NO.1 008 OF 2010] THUS IN VIEW OF THE POSITION LAID BY COURTS/ TRIBUN AL! CIT(A) IN EARLIER YEARS, THE OFFSHORE SUPPLY IS NEITHER TAXABLE UNDER THE IN COME TAX ACT AS TITLE AND RISK HAS PASSED OUTSIDE INDIA NOR THE OFFSHORE SUPP LY IS TAXABLE UNDER THE PROVISIONS OF DTAA BETWEEN INDIA AND KOREA AS THE O FFSHORE SUPPLY IS NOT RELATED TO THE PERMANENT ESTABLISHMENT FOR EXECUTIN G ONSHORE ACTIVITIES. THE LD. AO HAS MERELY RELIED ON HIS EARLIER YEAR ORDERS WHICH HAVE ALREADY BEEN DECIDED IN THE FAVOUR OF ASSESSEE BY COURTS/ TRIBUN AL/CIT(A). ITA NO. 5900/DEL/2016 PAGE | 15 CONCLUSION IN VIEW OF THE ABOVE, OFFSHORE SUPPLY IS NEITHER TA XABLE AS PER PROVISIONS OF DTAA NOR AS PER PROVISIONS OF THE ACT. ' FURTHER, IT HAS BEEN INFORMED THAT THE CASE FOR AYS 2012-13 AND 2013-14 HAVE NOT COME UP FOR ASSESSMENT AS THE APPELLANT HAS FIL ED APPLICATIONS BEFORE THE HON'BLE AAR WHICH HAS DULY ADMITTED THE SAME, AND W ITH WHOM THE SAME ARE PENDING. 4.1 FURTHER, THE AFORESAID ISSUE WAS IN APPEAL BEFO RE ME IN APPEAL FOR AY 2009-10, WHEREIN IN APPEAL NO. 148/2014-15, VIDE MY ORDER DATED 22.09.2015 I HAD ADJUDICATED AS FOLLOWS:- '8.1 I HAVE CAREFULLY CONSIDERED THE SUBMISSIONS OF THE APPELLANT, THE FACTS OF THE CASE AND THE POINTS MADE BY THE AO IN THE ASSES SMENT ORDER. THIS ISSUE HAS ALREADY BEEN DECIDED IN FAVOUR OF THE APPELLANT BY THE JURISDICTIONAL HIGH COURT IN AY 2002-03 (LG CABLE LTD (2010) ITA 703 OF 2009), AY 2003-04, 2004-05 AND 2005-06 (LG CABLE LTD (2011)ITA NO. 704 ,706,707 OF 2011), AND BY THE ORDER OF ITAT IN AY 2007-08 AND 2008-09. EVE N THE TAX EFFECT IS MINIMAL, BEING DISALLOWANCE OF LOSS OF RS. 33,919/- ONLY. 8.2 THE FACTS OBTAINING IN THE YEAR UNDER CONSIDERA TION ARE SIMILAR TO THE FACTS OF THE EARLIER YEARS. THE AO WHILE MAKING THIS ADDI TION FOR THE CURRENT YEAR HAS RELIED ON THE ORDER OF ASSESSMENT ORDER FOR EAR LIER YEARS (PARA 4.6 & 5 OF THE ASSESSMENT ORDER). RESPECTFULLY FOLLOWING THE O RDER OF THE ITAT AND THE ORDER OF THE HON'BLE DELHI HC IN THE APPELL ANT'S OWN CASE FOR THE EARLIER YEARS AS DISCUSSED IN THE PRECEDING PARAGRA PHS, IT IS HELD THAT THE INCOME OF THE APPELLANT FROM OFF-SHORE SUPPLIES IS NOT TAXABLE IN INDIA. GROUND NO. 1 IS THEREFORE, ALLOWED AND THE AO IS DIRECTED ACCORDINGLY. 8.3. THE OTHER GROUNDS OF APPEAL BECOME INFRUCTUOUS AND DO NOT REQUIRE ANY ADJUDICATION. 9. IN THE RESULT, THE APPEAL IS ALLOWED. 4.2. THE FACTS OBTAINING IN THIS YEAR ARE SIMILAR. AS SUCH, THE APPEAL IS ADJUDICATED IN FAVOUR OF THE APPELLANT. 5. AGGRIEVED WITH SUCH ORDER OF THE LD.CIT(A), THE REVENUE IS IN APPEAL BEFORE THE TRIBUNAL. ITA NO. 5900/DEL/2016 PAGE | 16 6. WE HAVE HEARD THE RIVAL SUBMISSIONS MADE BY BOTH THE SIDES, PERUSED THE ORDERS OF THE AUTHORITIES BELOW AND THE PAPER BOOK FILED ON BEHALF OF THE ASSESSEE. WE FIND THE AO BROUGHT TO TAX THE REVENUES FROM OFFSHORE SUPPLY BY CONSIDERING PROFIT RATE OF 10% AND ATTRIBUTING 25% OF PROFITS TO OPERATIONS CARRIED OUT IN INDIA. WHILE DOING SO, THE AO HAS FOLLOWED THE ORDERS OF HIS PREDECESSORS AS W ELL AS THE ORDER OF THE LD.CIT PASSED U/S 264 FOR THE FY 2015-16 I.E. A /Y 2016-17. WE FIND THE LD.CIT(A) DELETED THE ADDITION MADE BY THE AO BY FOLLOWING ORDER OF THE TRIBUNAL IN ASSESSEES OWN CASE IN THE PRECEDING YEARS AS WELL AS THE DECISION OF THE JURISDICTIONAL HIGH COU RT IN ASSESSEES OWN CASE, THE DETAILS OF WHICH HAVE ALREADY BEEN REPROD UCED IN THE PRECEDING PARAGRAPHS. NOTHING CONTRARY WAS BROUGHT TO OUR NOTICE BY THE LD.CIT DR AGAINST THE FINDING OF THE LD.CIT(A) EXCEPT STATING THAT THE LD.CIT(A) HAS NOT CONSIDERED THE ORDER PASSED B Y THE LD.CIT U/S 264 OF THE I.T.ACT, 1961. THE SAME, IN OUR OPINION , CANNOT BE A GROUND TO TAKE A DIFFERENT VIEW THAN THE VIEW TAKEN BY THE LD.CIT(A) WHO HAS FOLLOWED THE DECISION OF THE TRIBUNAL IN ASSESSEES OWN CASE IN THE PRECEDING ASSESSMENT YEAR AS WELL AS THE DECISION OF THE HONBLE JURISDICTIONAL HIGH COURT IN ASSESSEES OWN CASE. IN VIEW OF THE DETAILED REASONING GIVEN BY THE LD.CIT(A), WE FIND NO INFIRMITY IN HIS ORDER. ACCORDINGLY THE SAME IS UPHELD AND THE GROUN D RAISED BY THE REVENUE IS DISMISSED. ITA NO. 5900/DEL/2016 PAGE | 17 7. IN THE RESULT, THE APPEAL FILED BY THE REVENUE I S DISMISSED. PRONOUNCED IN THE OPEN COURT ON 12.01.2018. SD/- SD/- (BEENA A.PILLAI) (R.K .PANDA) JUDICIAL MEMBER ACCOU NTANT MEMBER DATE:- 12 TH JANUARY, 2018 *AMIT KUMAR* COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(APPEALS) 5. DR: ITAT ASSISTANT REGIS TRAR ITAT NEW DELHI