DDIT, Dehradun V. M/s. Association of Persons (AOP) of M/s. Schlumberger Asia Services Ltd. & Transocean Off-Shore Deepwater Drilling Inc., Dehradun

ITA 6171/DEL/2014

• Counselvise Citation: [2018] 119 COUNSELVISE.COM (IT) 1060 (ITAT-DELHI)
• Duration Of Justice: 4 year(s) 18 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-11-2018
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2010-2011
• Appeal Filed On: 11-11-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: G K DHALL
• Keywords: Reassessment proceedings
• Section: 148; 144

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH: A NEW DELHI BEFORE BEFORE SHRI R.K.PANDA, ACCOUNTANT MEMBE R & SHRI SUDHANSHU SRIVASTAVA, JUDICIAL MEMBER ITA NO.-6170/DEL/2014 ( ASSESSMENT YEAR: 2009-10) DDIT INTERNATIONAL TAXATION, AAYAKAR BHAWAN, 13A- SUBHASH ROAD DEHRADUN VS ASSOCIATION OF PERSONS (AOP) OF M/S. SCHLUMBERGER ASIA SERVICES LTD. & TRANSOCEAN OFF- SHORE DEEPWATER DRILLING INC. C/O. M/S. NANGIA & CO., CAS, 3 RD FLOOR, NCR PLAZA, NEW CANTT ROAD, DEHRADUN C.O. NO.-185/DEL/2015 (ITA NO. 6170/DEL/2014) ( ASSESSMENT YEAR: 2009-10) ASSOCIATION OF PERSONS (AOP) OF M/S. SCHLUMBERGER ASIA SERVICES LTD. & TRANSOCEAN OFF-SHORE DEEPWATER DRILLING INC. C/O. M/S. NANGIA & CO., CAS, SUITE-4A, PLAZA M-6, JASOLA NEW DELHI VS DDIT INTERNATIONAL TAXATION, AAYAKAR BHAWAN, 13A- SUBHASH ROAD DEHRADUN ITA NO. 6171/DEL/201 4 (ASSESSMENT YEAR : 2010 -11) DDIT INTERNATIONAL TAXATION, AAYAKAR BHAWAN, 13A- SUBHASH ROAD DEHRADUN VS ASSOCIATION OF PERSONS (AOP) OF M/S. SCHLUMBERGER ASIA SERVICES LTD. & TRANSOCEAN OFF- SHORE DEEPWATER DRILLING INC. C/O. M/S. NANGIA & CO., CAS, 3 RD FLOOR, NCR PLAZA, NEW CANTT 2 ITA NO. 6170,6171/DEL/2014 C O NO. 185,186/DEL/2015 (AOP OF SCHLUMBERGER ASIA SERVICES LTD. & TRANSOCEAN OFF-SHORE DEEPWATER DRILLING INC.) ROAD, DEHRADUN C.O. NO. 186/DEL/201 5 (ITA NO. 6171/DEL/2014) (ASSESSMENT YEAR : 2010- 11) ASSOCIATION OF PERSONS (AOP) OF M/S. SCHLUMBERGER ASIA SERVICES LTD. & TRANSOCEAN OFF-SHORE DEEPWATER DRILLING INC. C/O. M/S. NANGIA & CO., CAS, SUITE-4A, PLAZA M-6, JASOLA NEW DELHI VS DDIT INTERNATIONAL TAXATION, AAYAKAR BHAWAN, 13A- SUBHASH ROAD DEHRADUN APPELLANT RESPONDENT ASSESSEE BY : SH. AMIT ARORA, CA, SH. VISHAL MISHRA , CA REVENUE BY : SHRI G.K.DHALL, CIT(DR) ORDER PER SUDHANSHU SRIVASTAVA, JM: ITA NO. 6170/DEL/2014 IS PREFERRED BY THE DEPARTMEN T AGAINST ORDER DATED 25.08.2014 PASSED BY THE LD. CIT (APPEA LS) II, DEHRADUN FOR ASSESSMENT YEAR 2009-10. C.O. NO. 185/DEL/2015 IS THE ASSESSEES CROSS OBJECTION FOR THE SAME YEAR. ITA N O. 6171/DEL/2014 IS DEPARTMENTS APPEAL PREFERRED AGAINST ORDER DATE D 25.08.2014 DATE OF HEARING 20.09.2018 DATE OF PRONOUNCEMENT 30.11.2018 3 ITA NO. 6170,6171/DEL/2014 C O NO. 185,186/DEL/2015 (AOP OF SCHLUMBERGER ASIA SERVICES LTD. & TRANSOCEAN OFF-SHORE DEEPWATER DRILLING INC.) PASSED BY THE LD. CIT (APPEALS)-II, DEHRADUN FOR AS SESSMENT YEAR 2010-11 WHEREAS C.O. NO. 186/DEL/2015 IS THE ASSESS EES CROSS OBJECTION FOR THE SAME YEAR. BOTH THE APPEALS AND T HE CROSS OBJECTIONS INVOLVED IDENTICAL ISSUES AND, ACCORDINGLY, THEY WE RE HEARD TOGETHER AND ARE BEING DISPOSED OF BY THIS COMMON ORDER FOR THE SAKE OF CONVENIENCE. 2.0 THE BRIEF FACTS OF THE CASE ARE THAT THE ASSES SEE IS ALLEGEDLY AN ASSOCIATION OF PERSONS (AOP) OF M/S. SCHLUMBERGE R ASIA SERVICES LTD. & TRANSOCEAN OFF-SHORE DEEPWATER DRILLING INC. NOTICES U/S 148 OF THE INCOME TAX ACT, 1961 WERE ISSUED FOR BOTH TH E YEARS UNDER CONSIDERATION REQUIRING THE ASSESSEE TO FILE RETURN /S OF INCOME AS PER THE REQUIREMENT OF THE NOTICE/S ISSUED U/S 148. THE ASSESSEE FILED OBJECTIONS AGAINST THE ISSUANCE OF NOTICE/S AND SUB MITTED THAT THE ALLEGED AOP DID NOT EXIST. IT WAS SUBMITTED THAT BO TH THE ENTITIES WERE OFFERING TAX SEPARATELY ON DEEMED PROFIT BASIS U/S 44BB OF THE ACT. THE AO PROCEEDED TO COMPLETE THE ASSESSMENT/S U/S 1 44 OF THE ACT AND MADE A BEST JUDGMENT ASSESSMENT FOR BOTH THE YE ARS UNDER CONSIDERATION BY HOLDING THAT THE AOP OF THE TWO NO N-RESIDENT COMPANIES EXECUTING CONTRACT/S IN INDIA WAS TO BE T REATED AS RESIDENT AOP. THE TAXABLE INCOME WAS DETERMINED ON THE BASIS OF ACCOUNTS AND SECTION 44BB OF THE ACT WAS HELD TO BE NOT APPL ICABLE TO THE CASE 4 ITA NO. 6170,6171/DEL/2014 C O NO. 185,186/DEL/2015 (AOP OF SCHLUMBERGER ASIA SERVICES LTD. & TRANSOCEAN OFF-SHORE DEEPWATER DRILLING INC.) OF THE ASSESSEE. FOR ASSESSMENT YEAR 2009-10, THE A O COMPUTED THE TAXABLE INCOME AT RS. 111,89,57,600/-. FOR ASSESSME NT YEAR 2010- 11, THE TAXABLE INCOME WAS DETERMINED AT RS. 165,60 ,03,650/-. 2.1 AGGRIEVED, THE ASSESSEE APPROACHED THE LD. COM MISSIONER OF INCOME TAX (APPEALS) AND RAISED THE GROUND THAT THE CONSORTIUM OF M/S. SCHLUMBERGER ASIA SERVICES LTD. AND M/S. TRANS OCEAN OFFSHORE DEEPWATER DRILLING INC. DID NOT CONSTITUTE AN AOP. THE LD. CIT (APPEALS) ACCEPTED THIS CONTENTION OF THE ASSESSEE IN BOTH THE YEARS UNDER APPEAL BY RELYING ON THE ORDERS OF THE LD. CI T (APPEALS) FOR ASSESSMENT YEAR 2007-08 AND 2008-09 ON IDENTICAL FA CTS. 2.2 NOW THE DEPARTMENT HAS APPROACHED THE ITAT AND HAS CHALLENGED THE ADJUDICATION OF THE LD. CIT (APPEALS ) IN HOLDING THAT THE SAID CONSORTIUM DID NOT CONSTITUTE AN AOP SO AS TO BE BROUGHT WITHIN THE AMBIT OF TAXATION. THE CROSS OBJECTIONS FILED BY THE ASSESSEE IN BOTH THE YEARS ARE SUPPORTING THE ORDER S OF THE LD. CIT (APPEALS) AND ALSO RAISE THE GROUND THAT THE LD. CI T (APPEALS) DID NOT ADJUDICATE THE ASSESSEES GROUNDS CHALLENGING THE I NITIATION OF REASSESSMENT PROCEEDINGS. 3.0 THE LD. AUTHORIZED REPRESENTATIVE, AT THE OUTS ET, SUBMITTED THAT THIS ISSUE WAS COVERED IN FAVOUR OF THE ASSESS EE BY ORDER OF THE ITAT IN ASSESSEES OWN CASE FOR ASSESSMENT YEAR 200 7-08 IN ITA NO. 5 ITA NO. 6170,6171/DEL/2014 C O NO. 185,186/DEL/2015 (AOP OF SCHLUMBERGER ASIA SERVICES LTD. & TRANSOCEAN OFF-SHORE DEEPWATER DRILLING INC.) 4655/DEL./2013 AND IN ASSESSMENT YEAR 2008-09 IN IT A NO. 4656/DEL/2013. THE LD. AUTHORISED REPRESENTATIVE SU BMITTED THAT IN BOTH THESE YEARS, THE ITAT HAD HELD THAT THE CONSOR TIUM-AGREEMENT DID NOT CONSTITUTE AN AOP. IT WAS SUBMITTED THAT IN VIEW THE BINDING PRECEDENT OF THE ITAT THE DEPARTMENTAL APPEALS WERE LIABLE TO BE DISMISSED. 4.0 IN RESPONSE, THE LD. CIT (DR) SUPPORTED THE OR DER OF THE AO. HE, HOWEVER, COULD NOT CONTROVERT THE FACT THAT THE ISSUE STOOD COVERED IN FAVOUR OF THE ASSESSEE BY THE ORDER OF T HE ITAT IN ASSESSEES OWN CASE FOR TWO EARLIER ASSESSMENT YEAR S AS AFOREMENTIONED. THE LD. CIT (DR) ALSO COULD NOT POI NT OUT ANY DISTINGUISHABLE FACTS IN THE TWO YEARS UNDER CONSID ERATION BEFORE US AND ASSESSMENT YEARS 2007-08 AND 2008-09 FOR WHICH THE ASSESSEE WAS RELYING ON THE ORDERS PASSED BY THE ITAT. 5.0 WE HAVE HEARD THE RIVAL SUBMISSIONS AND HAVE A LSO PERUSED THE MATERIAL AVAILABLE ON RECORD. WE AGREE WITH THE AVERMENTS OF THE LD. AUTHORISED REPRESENTATIVE THAT THE ISSUE STANDS COVERED IN FAVOUR OF THE ASSESSEE BY ORDER OF THE I TAT IN ASSESSEES OWN CASE FOR THE ASSESSMENT YEAR 2007-08 AND 2008-0 9 IN ITA NOS. 4655/DEL/2013 AND 4656/DEL/2013 RESPECTIVELY WHEREI N VIDE ORDER DATED 26.03.2018 THE REVENUES APPEALS ON IDENTICAL FACTS WERE 6 ITA NO. 6170,6171/DEL/2014 C O NO. 185,186/DEL/2015 (AOP OF SCHLUMBERGER ASIA SERVICES LTD. & TRANSOCEAN OFF-SHORE DEEPWATER DRILLING INC.) DISMISSED BY FOLLOWING THE JUDGMENT OF THE HONBLE DELHI HIGH COURT IN THE CASE OF LINDE AG LINDE ENGINEERING DIVISION VS. DDI REPORTED IN 365 ITR 1 (DELHI). THE RELEVANT OBSERVATIONS OF THE CO-ORDINATE BENCH ARE CONTAIN IN PARAGRAPH 4.5 OF THE SAID ORDE R OF THE TRIBUNAL AND IN VIEW OF THE FACTS BEING IDENTICAL AND RESPEC TFULLY FOLLOWING THE ORDER OF THE CO-ORDINATE BENCH, WE DISMISS BOTH THE APPEALS OF THE DEPARTMENT. 6.0 SINCE THE DEPARTMENTS APPEALS HAVE BEEN DISMI SSED, THE ASSESSEES CHALLENGE TO NON-ADJUDICATION BY THE LD. CIT (APPEALS) OF THE ASSESSEES LEGAL GROUND CHALLENGING THE REASSES SMENT PROCEEDINGS BECOMES IN FRUCTUOUS . 6.1 ACCORDINGLY, BOTH THE COS OF THE ASSESSEE ALSO STAND DISMISSED AS HAVING BECOME IN FRUCTUOUS . 7.0 IN THE FINAL RESULT BOTH THE DEPARTMENTS APPE ALS AS WELL AS BOTH THE CO OF THE ASSESSEE STAND DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 30.11.2018 SD/- SD/- (R.K.PANDA) (SUDHANSH U SRIVASTAVA) ACCOUNTANT MEMBER JUDICIAL MEM BER DATED: 30.11.2018 BR 7 ITA NO. 6170,6171/DEL/2014 C O NO. 185,186/DEL/2015 (AOP OF SCHLUMBERGER ASIA SERVICES LTD. & TRANSOCEAN OFF-SHORE DEEPWATER DRILLING INC.) COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(APPEALS) 5. DR: ITAT TRUE COPY ASSISTANT REGISTRAR ITAT NEW DELHI DATE OF DICTATION 28.11.2018 DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER 28.11.2018 DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE OTHER MEMBER 29.11.2018 DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR. PS/PS 30.11.2018 DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE DICTATING MEMBER FOR PRONOUNCEMENT 30.11.2018 DATE ON WHICH THE FAIR ORDER COMES BACK TO THE SR. PS/PS 30.11.2018 DATE ON WHICH THE FINAL ORDER IS UPLOADED ON THE WEBSITE OF ITAT 30.11.2018 DATE ON WHICH THE FILE GOES TO THE BENCH CLERK DATE ON WHICH THE FILE GOES TO THE HEAD CLERK THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT REGISTRAR FOR SIGNATURE ON THE ORDER DATE OF DISPATCH OF THE ORDER