M/s G.E. Engine Services Distribution LLC, New Delhi V. ADIT, New Delhi

ITA 593/DEL/2011

• Counselvise Citation: [2017] 130 COUNSELVISE.COM (IT) 6912 (ITAT-DELHI)
• Duration Of Justice: 5 year(s) 11 month(s) 24 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-01-2017
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: C
• Next Hearing Date: 08-05-2015
• Assessment Year: 2001-2002
• Appeal Filed On: 03-02-2011
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: SANJEEV SHARMA; ANUJ ARORA
• Assessee Lawyers: RAHUL SATEEJA S
• Keywords: Permanent establishment
• Section: 234B

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCHES : C : NEW DELHI BEFORE SHRI R.S. SYAL, ACCOUNTANT MEMBER AND MS SUCHITRA KAMBLE, JUDICIAL MEMBER ITA NO.(S) ASSESSMENT YEAR (S) APPELLANT RESPONDENT 672-676/DEL/2011, 5740/DEL/2010 & 2002-03, 2003-04, 2004-05, 2005- 06,2006-07, 2007-08 GE ENERGY PARTS INC, AIFACS BUILDING, 1, RAFI MARG, NEW DELHI 110 001. VS. ADIT, CIRCLE 1(2), INTERNATIONAL TAXATION, NEW DELHI. 5540/DEL/2011 2008-09 NUVO PIGNONE S.PA BUILDING NO.7A, 6 TH FLOOR, DLF CYBER CITY, PHASE- III, GURGAON. VS. -DO - 593-598/DEL/2011, 5738/DEL/2010 & 2001-02, 2002-03, 2003-04, 2004-05, 2005-06, 2006-07, 2007-08 GE ENGINE SERVICES DISTRIBUTION LLC AIFACS BUILDING, 1, RAFI MARG, NEW DELHI 110 001. VS. -DO- 5545/DEL/2011 2008-09 GE ENGINE SERVICES DISTRIBUTION LLC BUILDING NO.7A, 6 TH FLOOR, DLF CYBER CITY, PHASE- III, GURGAON. VS. -DO - 725-728/DEL/2011 2001-02,2002-03, 2005-06 & 2006-07 GE JAPAN LTD. AIFACS BUILDING, 1, RAFI MARG, NEW DELHI 110 001. VS. -DO- ITA NO.672/DEL/2011 (GE ENERGY PARTS INC. VS. ADIT) & 137 APPEALS OF GE GROUP COMPANIES 2 703-708/DEL/2011, 5741/DEL/2010 & 5542/DEL/2011 2001-02, 2002-03, 2003-04, 2004-05, 2005-06,2006-07, 2007-08 2008-09 NUVO PIGNONE S.PA AIFACS BUILDING, 1, RAFI MARG, NEW DELHI 110 001. NUVO PIGNONE S.PA BUILDING NO.7A, 6 TH FLOOR, DLF CYBER CITY, PHASE- III, GURGAON. VS. VS. -DO- -DO- 5728/DEL/2010 2007-08 GE ENGINE SERVICES MCALLEN LP AIFACS BUILDING, 1, RAFI MARG, NEW DELHI 110 001. VS. -DO- 5729/DEL/2010 2006-07 GE VISA S/A AIFACS BUILDING, 1, RAFI MARG, NEW DELHI 110 001. VS. -DO- 5730/DEL/2010 2007-08 GE ENGINE SERVICES MALAYSIA SDN BHD AIFACS BUILDING, 1, RAFI MARG, NEW DELHI 110 001. VS. -DO- 5731/DEL/2010 2007-08 GE CALEDONIAN LTD. AIFACS BUILDING, 1, RAFI MARG, NEW DELHI 110 001. VS. -DO- 5732/DEL/2010 2007-08 GE ENERGY (USA) LLC AIFACS BUILDING, 1, RAFI MARG, NEW DELHI 110 001. VS. -DO- ITA NO.672/DEL/2011 (GE ENERGY PARTS INC. VS. ADIT) & 137 APPEALS OF GE GROUP COMPANIES 3 5733/DEL/2010 2007-08 GE AIRCRAFT ENGINE SERVICES LTD. AIFACS BUILDING, 1, RAFI MARG, NEW DELHI 110 001. VS. -DO- 5734/DEL/2010 2007-08 GE AVIATION MATERIALS LP AIFACS BUILDING, 1, RAFI MARG, NEW DELHI 110 001. VS. -DO- 5735/DEL/2010 2007-08 GE ENGINE SERVICES INC. AIFACS BUILDING, 1, RAFI MARG, NEW DELHI 110 001. VS. -DO- 5736/DEL/2010 2007-08 GE AVIATION SERVICE OPERATION LLP AIFACS BUILDING, 1, RAFI MARG, NEW DELHI 110 001. VS. -DO- 5737/DEL/2010 2007-08 GE TRANSPORTATION PARTS LLC AIFACS BUILDING, 1, RAFI MARG, NEW DELHI 110 001. VS. -DO- 5739/DEL/2010 2007-08 GE JENBACHER GMBH & CO. OHG AIFACS BUILDING, 1, RAFI MARG, NEW DELHI 110 001. VS. -DO- 5742/DEL/2010 2007-08 GE PACKAGED POWER INC. AIFACS BUILDING, 1, RAFI MARG, NEW DELHI 110 001. VS. -DO- ITA NO.672/DEL/2011 (GE ENERGY PARTS INC. VS. ADIT) & 137 APPEALS OF GE GROUP COMPANIES 4 5743 TO 5746/DEL/2010 2004-05 TO 2007-08 GE CANADA COMPANY AIFACS BUILDING, 1, RAFI MARG, NEW DELHI 110 001. VS. -DO- 5748 TO 5752/DEL/2010 2002-03 TO 2006-07 GE MULTILIN AIFACS BUILDING, 1, RAFI MARG, NEW DELHI 110 001. VS. -DO- 5753 TO 5757/DEL/2010 2002-03 TO 2006-07 GE PACIFIC PTE LTD. AIFACS BUILDING, 1, RAFI MARG, NEW DELHI 110 001. VS. -DO- 5877 TO 5881/DEL/2010 2002-03 TO 2006-07 GE ENGINE SERVICES TRI REMANUFACTURING INC. AIFACS BUILDING, 1, RAFI MARG, NEW DELHI 110 001. VS. -DO- 587 TO 592/DEL-2011 2001-02 G.E. ENGINE SERVICES MCALLEN LP AIFACS BUILDING, 1, RAFI MARG, NEW DELHI 110 001. VS. -DO- 611 & 612/DEL/2011 2001-02 & 2002-03 GE ACCESSORY SERVICES- GRAND PRAIRIE INC., AIFACS BUILDING, 1, RAFI MARG, NEW DELHI 110 001. VS. -DO- 613 TO 618/DEL-2011 2001-02 TO 2006-07 G.E. AVIATION MATERIALS LP AIFACS BUILDING, 1, RAFI MARG, NEW DELHI 110 001. VS. -DO- ITA NO.672/DEL/2011 (GE ENERGY PARTS INC. VS. ADIT) & 137 APPEALS OF GE GROUP COMPANIES 5 619 TO 624/DEL/2011 2001-02 TO 2006-07 G.E. ENGINE SERVICES INC. AIFACS BUILDING, 1, RAFI MARG, NEW DELHI 110 001. VS. -DO- 625 TO 630/DEL/2011 2001-02 TO 2006-07 G.E. PACKAGED POWER INC. AIFACS BUILDING, 1, RAFI MARG, NEW DELHI 110 001. VS. -DO- 631 TO 635/DEL/2011 2001-02 & 2003-04 TO 2006-07 GE TRANSPORTATION PARTS LLC AIFACS BUILDING, 1, RAFI MARG, NEW DELHI 110 001. VS. -DO- 641 TO 644/DEL/2011 2001-02, 2002-03, 2003-04 & 2006-07 G.E. CALEDONIAN LTD. AIFACS BUILDING, 1, RAFI MARG, NEW DELHI 110 001. VS. -DO- 645/DEL-2011 2001-02 G.E. ENGINE SERVICES- TRI REMANUFACTURING INC. AIFACS BUILDING, 1, RAFI MARG, NEW DELHI 110 001. VS. -DO- 646/DEL-2011 2001-02 MRA SYSTEM INC. AIFACS BUILDING, 1, RAFI MARG, NEW DELHI 110 001. VS. -DO- 697 TO 702/DEL/2011 2001-02 TO 2006-07 G.E. AVIATION SERVICE OPERATION LLP AIFACS BUILDING, 1, RAFI MARG, NEW DELHI 110 001. VS. -DO- ITA NO.672/DEL/2011 (GE ENERGY PARTS INC. VS. ADIT) & 137 APPEALS OF GE GROUP COMPANIES 6 715 TO 719/DEL-2011 2001-02 TO 2006-07 G.E. AIRCRAFT ENGINE SERVICES LTD. AIFACS BUILDING, 1, RAFI MARG, NEW DELHI 110 001. VS. -DO- 720 TO 724/DEL/2011 2001-02 TO 2005-06 G.E. ENGINE SERVICES MALAYSIA SDN BHD AIFACS BUILDING, 1, RAFI MARG, NEW DELHI 110 001. VS. -DO- 677 TO 681/DEL/2011 2002-03 TO 2006-07 GENERAL ELECTRIC CANADA COMPANY AIFACS BUILDING, 1, RAFI MARG, NEW DELHI 110 001. VS. -DO- 685/DEL-2011 2002-03 GE TRANSPORTATION PARTS LLC AIFACS BUILDING, 1, RAFI MARG, NEW DELHI 110 001. VS. -DO- 688/DEL-2011 2002-03 GENERAL ELECTRIC POWER SYSTEMS INC. AIFACS BUILDING, 1, RAFI MARG, NEW DELHI 110 001. VS. -DO- 5817 TO 5821/DEL-2011 2002-03 TO 2006-07 BENTLY NEVADA LLC AIFACS BUILDING, 1, RAFI MARG, NEW DELHI 110 001. VS. -DO- ITA NO.672/DEL/2011 (GE ENERGY PARTS INC. VS. ADIT) & 137 APPEALS OF GE GROUP COMPANIES 7 669 & 670/DEL-2011 2005-06 2006-07 G.E. WIND ENERGY GMBH AIFACS BUILDING, 1, RAFI MARG, NEW DELHI 110 001. VS. - DO- 682 TO 684/DEL/2011 2004-05 TO 2006-07 G.E. JENBACHER GMBH & CO. OHG AIFACS BUILDING, 1, RAFI MARG, NEW DELHI 110 001. VS. -DO- 686 & 687/DEL-2011 2005-06 & 2006-07 G.E. ENERGY (USA)- LLC AIFACS BUILDING, 1, RAFI MARG, NEW DELHI 110 001. VS. -DO- 5535/DEL/2011 2008-09 GE AVIATION MATERIALS LP BUILDING NO.7A, 6 TH FLOOR, DLF CYBER CITY, PHASE- III, GURGAON. VS. -DO- 5536/DEL/2011 2008-09 GE AVIATION SERVICES OPERATION LLP BUILDING NO.7A, 6 TH FLOOR, DLF CYBER CITY, PHASE- III, GURGAON. VS. -DO- 5537/DEL/2011 2008-09 GE JENBACHER GMBH & CO. BUILDING NO.7A, 6 TH FLOOR, DLF CYBER CITY, PHASE- III, GURGAON. VS. -DO- ITA NO.672/DEL/2011 (GE ENERGY PARTS INC. VS. ADIT) & 137 APPEALS OF GE GROUP COMPANIES 8 5538/DEL/2011 2008-09 GE TRANSPORTATION PARTS LLC BUILDING NO.7A, 6 TH FLOOR, DLF CYBER CITY, PHASE- III, GURGAON. VS. -DO- 5539/DEL/2011 2008-09 GE ENGINE SERVICES INC. BUILDING NO.7A, 6 TH FLOOR, DLF CYBER CITY, PHASE- III, GURGAON. VS. -DO- 5543/DEL/2011 2008-09 GE ENGINE SERVICES MALAYSIA BUILDING NO.7A, 6 TH FLOOR, DLF CYBER CITY, PHASE- III, GURGAON. VS. -DO- 5541/DEL/2011 2008-09 GE CALEDONIAN LTD. BUILDING NO.7A, 6 TH FLOOR, DLF CYBER CITY, PHASE- III, GURGAON. VS. -DO- 772/DEL/2012 2001-02 GENERAL ELECTRIC POWER SYSTEMS INC. AIFACS BUILDING, 1, RAFI MARG, NEW DELHI 110 001. VS. -DO- ASSESSEES BY : SHRI S. GANESH, SR. ADVOCATE, SHRI SACHIT JOLLY, SHRI RASHI DHIR, SHRI GAUTAM SWARUP, SHRI SIDHARTHA SINGH & SHRI RAHUL SATEEJA, ADVOCATES DEPARTMENT BY : SHRI SANJEEV SHARMA, CIT & SHRI ANUJ ARORA, CIT, DR ITA NO.672/DEL/2011 (GE ENERGY PARTS INC. VS. ADIT) & 137 APPEALS OF GE GROUP COMPANIES 9 DATE OF HEARING : 19.01.2017 DATE OF PRONOUNCEMENT : 27.01.2017 ORDER PER BENCH: THESE 138 APPEALS BY DIFFERENT BUT CONNECTED ASSES SES OF GE GROUP RELATE TO THE ASSESSMENT YEARS 2001-02 TO 2008-09. 2. IN ALL, FOLLOWING FOUR ISSUES HAVE BEEN RAISE D IN THESE APPEALS : - I. CHALLENGE TO REASSESSMENT II. PERMANENT ESTABLISHMENT III. ATTRIBUTION OF INCOME IV. INTEREST U/S 234B. 3. WHILE SOME OF THE APPEALS DO NOT INVOLVE THE I SSUE OF REASSESSMENT, BUT THE OTHER THREE ISSUES ARE COMMON TO ALL. 4. IN FACT, THERE WERE 139 APPEALS BY THE GE GROUP OVERSEAS ENTITIES BEFORE THE BENCH. THE GROUP CHOSE GE ENERGY PARTS INC. VS. ADIT (ITA NO.671/DEL/2011- ASSESSMENT YEAR : 2001-02) A S THE LEAD CASE. EXTENSIVE ARGUMENTS WERE MADE BY BOTH THE SIDES IN THE CASE OF GE ITA NO.672/DEL/2011 (GE ENERGY PARTS INC. VS. ADIT) & 137 APPEALS OF GE GROUP COMPANIES 10 ENERGY PARTS (SUPRA) AND IT WAS CANDIDLY ADMITTED THAT THE REMAINING APPEALS INVOLVE MUTATIS MUTANDIS SIMILAR ISSUES. THE ARGUMENTS SO MADE IN THE LEAD CASE WERE ADOPTED BY BOTH THE SIDES BY SUBMITTING THAT THE DECISION TAKEN IN THE LEAD CASE ON ALL THE FOUR ISS UES WILL APPLY, TO THE RELEVANT EXTENT, TO THESE 138 APPEALS. 5. WE HAVE PASSED A SEPARATE ORDER IN THE LEAD CA SE TODAY AND OUR DECISION ON THE FOUR ISSUES IS THAT :- I. INITIATION OF REASSESSMENT IS VALID. II. FIXED PLACE AS WELL AGENCY PERMANENT ESTABLISHMENT OF ALL THE GE OVERSEAS IS ESTABLISHED IN INDIA. III. ATTRIBUTION OF INCOME TO THE PE SHOULD BE 2.6% OF T HE SALES MADE BY GE OVERSEAES ENTITIES IN INDIA. IV. INTEREST U/S 234B IS NOT CHARGEABLE. 6. AS THE FACTS AND CIRCUMSTANCES OF THESE 138 AP PEALS UNDER CONSIDERATION ARE SIMILAR TO THE LEAD CASE, WE APPL Y OUR ABOVE DECISION TO THE INSTANT APPEALS. ITA NO.672/DEL/2011 (GE ENERGY PARTS INC. VS. ADIT) & 137 APPEALS OF GE GROUP COMPANIES 11 IN THE RESULT, ALL THE APPEALS ARE PARTLY ALLOWED. THE ORDER PRONOUNCED IN THE OPEN COURT ON 27.01.201 7. SD/- SD/- [SUCHITRA KAMBLE] [R.S. SYAL] JUDICIAL MEMBER ACCOUNTANT MEMBER DATED, 27 TH JANUARY, 2017. DK COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT (A) 5. DR, ITAT AR, ITAT, NEW DELHI.