Huawei Technologies Co. Ltd., V. DCIT (International Taxation), Haryana

ITA 6376/DEL/2016

• Counselvise Citation: [2020] 110 COUNSELVISE.COM (IT) 1765 (ITAT-DELHI)
• Duration Of Justice: 3 year(s) 11 month(s) 25 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-12-2020
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: C
• Next Hearing Date: 01-05-2017
• Assessment Year: 2012-2013
• Appeal Filed On: 14-12-2016
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: SATPAL GULATI
• Keywords: Business income; Transfer pricing; Double taxation relief; International transaction; Deemed to accrue or arise in india; Permanent establishment; Wholly owned subsidiary
• Section: 143(3); 5(2); 133A; 234B; 195; 41(2); 144C; 208; 64; 43; 48; 9(1); 9(1); 9(1); 73; 13; 22; 32; 63

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL, DELHI D BEN CH, NEW DELHI [THROUGH VIDEO CONFERENCE] BEFORE SHRI N.K. BILLAIYA, ACCOUNTANT MEMBER, AND SHRI K. N CHARY, JUDICIAL MEMBER ITA NO. 1500/DEL/2014 [A.Y 2009-10] ITA NO. 6921/DEL/2014 [A.Y 2010-11] ITA NO. 937/DEL/2016 [A.Y 2011-12] ITA NO. 6376/DEL/2016 [A.Y 2012-13] ITA NO. 6377/DEL/2016 [A.Y 2013-14] ITA NO. 6799/DEL/2017 [A.Y 2014-15] ITA NO. 5506/DEL/2018 [A.Y 2015-16] ITA NO. 8263/DEL/2019 [A.Y 2016-17] M/S HUAWEI TECHNOLOGIES CO. LTD VS. THE ADDITIONAL D.I.T ADMINISTRATION BUILDING INTERNATIONAL TAXATION HEADQUARTERS OF HUAWEI TECHNOLOGIES NEW DELHI CO. LTD, BANTIAN LONGGANG DISTT SHENZHEN, 518129 P.R. CHINA PAN: AACCH 2982 B [APPELLANT] [RESPONDENT] ASSESSEE BY : SHRI AJAY VOHRA, SR. ADV SHRI ANSHUL SACHDEVA, CA SHRI VIBHU GUPTA, CA REVENUE BY : SHRI SATPAL GULATI, CIT- DR DATE OF HEARING : 04.11.2020 09.11.2020 02.12.2020 DATE OF PRONOUNCEMENT : 09.12.2020 2 ORDER PER N.K. BILLAIYA, ACCOUNTANT MEMBER, THE ABOVE CAPTIONED APPEALS ARE BY THE ASSESSEE PRE FERRED AGAINST THE ORDER FRAMED U/S 143(3) R.W.S 144C OF T HE I.T. ACT, 1961 [HEREINAFTER REFERRED TO AS 'THE ACT' FOR SHORT] P ERTAINING TO A.YS 2009 10 TO 201617. SINCE COMMON ISSUES ARE INVOLVED IN ALL THESE APPEALS, THEY WERE HEARD TOGETHER AND ARE DISPOSED OF BY THI S COMMON ORDER FOR THE SAKE OF BREVITY AND CONVENIENCE. 2. THE ASSESSEE HAS RAISED AN ADDITIONAL GROUND IN ALL THE ABOVE CAPTIONED APPEALS, WHICH IS AS UNDER: THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE IMPUGNED ORDER PASSED BY THE ASSESSING OFFICER IS BARRED BY LIMITATION AND THEREFORE, IS LIABLE TO BE QUASHE D. 3. AN IDENTICAL ADDITIONAL GROUND WAS RAISED IN THE CASE OF RELIANCE CAPITAL MARKETS LTD IN ITA NO. 1881/DEL/2014, 1583/ DEL/2015, 753/DEL/2016 AND 1763/DEL/2017 FOR A.YS 2009-10 TO 2012-13. THE ADDITIONAL GROUND RAISED WAS DISMISS ED BY THE CO- ORDINATE BENCH IN THE IMPUGNED 3 APPEALS. RESPECTFULLY FOLLOWING THE DECISION OF T HE CO-ORDINATE BENCH [SUPRA], THE ADDITIONAL GROUND RAISED BY THE ASSESS EE IN ALL THE CAPTIONED APPEALS ARE DISMISSED. 4. THE COMMON GRIEVANCES IN ALL THESE APPEALS READ AS UNDER: 1. THAT THE LEARNED ASSESSING OFFICER (AO) ERRED IN PASSING THE IMPUGNED DRAFT ASSESSMENT ORDER DATED M ARCH 28, 2013 (THE DRAFT ASSESSMENT OLDER) AND THE HON BLE DISPUTE RESOLUTION PANEL (HONBLE DRP) ERRED IN P ASSING DIRECTIONS UNDER SECTION M4C OF THE INCOME-TAX ACT 1961 (THE ACT) PARTIALLY CONFIRMING THE DRAFT ASSESSMEN T ORDER, IN SUMMARY, THE LEARNED AO ERRED IN ASSESSING THE INCOME OF THE APPELLANT AT RS.9,30,98,73,816 AS AGAINST TH E RETURNED INCOME OF RS.5,39,58,286 REPORTED BY THE APPELLANT IN ITS RETURN OF INCOME. 2. ON TILE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE AND IN LAW, THE LEARNED AO ERRED < NOT APPRECIATING TH E FACTUAL POSITION AND LEGAL PRINCIPLES BROUGHT ON RECORD BY THE APPELLANT. FURTHER, THE LOAMED AO / THE HONBLE DRP ERRED IN MAKING / NOT REJECTING ALLEGATIONS, INCORRECT OBSER VATIONS AND ASSERTIONS ON THE BASIS OF MERE CONJECTURES AND SUR MISES, WITHOUT ANY RELEVANT MATERIAL ON RECORD INTER-ALIA (LIE INCORRECT ASSUMPTIONS/ INFERENCES MADE / NOT REJECT ED BY THE LEARNED AO / THE HONBLE DRP, ARE AS UNDER: 4 (A) THE APPELLANT HAS BUSINESS CONNECTION (BC) AND P ERMANENT ESTABLISHMENT (PE) IN INDIA IN THE FORM OF HUAWEI TELECOMMUNICATIONS (INDIA) CO. PVT LTD (HUAWEI LND IA), WHICH IS : ASSESSED TO TAX IN NEW DELHI I; (B) EMPLOYEES OF HUAWEI INDIA HAVE AUTHORITY TO NEGOTI ATE AND / OR CONCLUDING / SECURING CONTRACTS ON BEHALF OF APP ELLANT IN INDIA (C) THE APPELLANT HAS SHOWN HUAWEI INDIAS ADDRESS AS ITS LOCAL ADDRESS FOR CORRESPONDENCE PURPOSES AND ITS EMPLOYE ES ARE OPERATING FROM THE PREMISES OF HUAWEI INDIA; (D) IGNORING THE FACT THAT INSTALLATION AND COMMISSION ING PROJECTS WERE INDEPENDENTLY UNDERTAKEN BY HUAWEI IN DIA IN ACCORDANCE WITH THE TERMS OF CONTRACT ENTERED DIIRE CTLY WITH ITS CUSTOMERS AND NOT ON BEHALF OF THE APPELLANT; (E) TITLE AND RISK ASSOCIATED WITH OFFSHORE SUPPLIES M ADE BY THE APPELLANT ARE PASSED IN INDIA, AND HENCE THE SALE I S EFFECTED IN INDIA; (F) THE LEARNED AO IS JUSTIFIED IN THE ATTRIBUTING INCO ME TO THE ALLEGED PE OF THE APPELLANT; AND 5 (G) THE LEARNED AO IS JUSTIFIED IN ALLOCATING 30% OF TH E TOTAL SUPPLIES TOWARDS SOFTWARE IN THE EQUIPMENT AND TAXI NG THE SAME OIL GROSS BASIS AS ROYALTY UNDER THE PROVISI ONS OF THE ACT AND/OR DOUBLE TAX AVOIDANCE AGREEMENT ENTERED BETWEEN INDIA AND CHINA (TAX TREATY). 3.ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LEARNED AO ERRED IN PROPOSING AND THE HON BLE DRP FURTHER ERRED IN CONFIRMING THE ACTION OF LEARNED A O IN ASSESSING THE TOTAL INCOME OF THE APPELLANT UNDER T HE PROVISIONS OF THE ACT AND TAX TREATY WITHOUT APPREC IATING THAT INCOME OF THE APPELLANT (OTHER THAN THE INCOME OFFERED TO TAX UNDER THE RETURN OF INCOME FOR THE YEAR UNDE R APPEAL): J (A) HAD NOT ACCRUED/ ARISEN IN INDIA UNDER SECTION 5(2 ) OF THE ACT; (B) COULD NOT BE DEEMED TO HAVE ACCRUED/ ARISEN IN IND IA UNDER SECTION 9 OF THE ACT; AND (C) WAS NOT TAXABLE IN INDIA UNDER THE PROVISIONS OF T HE ACT AND / OR TAX TREATY. 4. ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LEARNED AO AND HONBLE DRP ERRED IN HOLDING THAT EX ISTENCE OF APPELLANTS WHOLLY OWNED SUBSIDIARY, HUAWEI INDI A, CREATES 6 BC IN INDIA UNDER SECTION 9(1 )(I) OF THE ACT. 5. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LEARNED AO HAS ERRED IN PROPOSING AND THE HONBLE DRP FURTHER ERRED IN CONFIRMING THAT DIE INCOME OF THE APPELLANT IS ASSESSABLE TO TAX UNDER THE TAX TREATY ON THE GROUND THAT THE APPELLANT CONSTITUTES A PE IN INDIA , VIZ. (A) FIXED PLACE PE UNDER ARTICLE 5(2) READ WITH ARTICL E 5(1) OF THE TAX TREATY; (B) INSTALLATION PE UNDER ARTICLE 5(2) READ WITH ARTIC LE 5(1) OF THE TAX TREATY; (C) SERVICE PE-UNDER ARTICLE-5(2XK) READ WITH ARTICLE 5(1) OF THE TAX TREATY; AND (D) DEPENDENT AGENT PE UNDER ARTICLE 500 OF THE TAX TREATY. 6.1 ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE AO AS WELL AS THE HONBLE DRP ERRED IN NOT APPR ECIATING THAT THAT SINCE NO PART OF ACTIVITY RELATING TO SAL E OF NETWORK EQUIPMENT AND TERMINAL EQUIPMENTS WAS CARRIED OUT B Y THE APPELLANT IN INDIA, THE QUESTION OF ATTRIBUTING-ANY INCOME IN INDIA D 9 CS NOT ARISE. 6.2 ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE LEARNED AO AS WELL AS THE HONBLE DRP ERRED IN NOT 7 APPRECIATING THAT NO PORTION OF PROFITS, IF ANY, AC CRUING TO APPELLANT FROM OFF SHORE SALE OF TERMINAL EQUIPMENT S TO INDIAN CUSTOMERS CAN BE ATTRIBUTED TO THE ALLEGED P E IN INDIA GIVEN THE NATURE OF EQUIPMENT, CUSTOMER PROFILE AND MODALITIES OF UNDERTAKING SALES. 6.3 ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE LEARNED AO HAS ERRED IN PROPOSING AND THE HONB LE DRP HAS ERRED IN CONFIRMING ARBITRARY ESTIMATION OF PRO FITS TO THE EXTENT OF 725 PERCENT ON OFFSHORE SALES OF EQUIPMEN TS IN THE HANDS OF THE APPELLANT IN INDIA WHILE COMPLETELY DI SREGARDING THE GLOBAL OPERATING MARGIN OF THE APPELLANT FOR TH E YEAR UNDER CONSIDERATION. 6.4 ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE LEARNED AO AS WELL AS THE HONBLE DRP ERRED IN NOT APPRECIATING THAT AS THE ALLEGED PE OF THE APPELLAN T HAS BEEN REMUNERATED AT ARMS LENGTH PRICE AND THE SAME HAS ALSO BEEN CONFIRMED BY TRANSFER PRICING OFFICER (TPO) IN HI S ORDER DATED JANUARY 29, 2013, NO FURTHER INCOME COULD BE ATTRIBUTED AND ASSESSED TO TAX IN INDIA, IN THE HAN DS OF THE APPELLANT. I 8 7.1 ON THE FACTS AND CIRCUMSTANCES OF THE EASE AND IN LAW, THE LEARNED AO ERRED IN PROPOSING AND THE HONBLE D RP FURTHER ERRED IN CONFIRMING THE ACTION OF LEARNED A O OF ALLOCATING 30% OF THE TOTAL SUPPLIES TOWARDS SOFTWA RE IN THE EQUIPMENT MID TAXING THE SAME ON GROSS BASIS AS RO YALTY UNDER THE PROVISIONS OF THE ACT AND TAX TREATY. EVE N OTHERWISE, THE SUBJECT ALLOCATION PROPOSED BY THE L EARNED AO AND CONFIRMED BY THE HON'BLE DRP IS INCORRECT AND C ONTRARY TO MATERIAL FURNISHED ON RECORD. 7.2 WITHOUT PREJUDICE TO ABOVE, IN CASE IT IS HELD THAT THE REVENUE FROM SUPPLY OF SOFTWARE ALONG WITH THE HARD WARE IS TAXABLE AS ROYALTY UNDER THE PROVISIONS OF ACT AND/ OR TAX TREATY, THEN THE SAME BEING EFFECTIVELY CONNECTED W ITH THE ALLEGED PE CAN AT BEST BE TAXED OH NET BASIS AS BU SINESS PROFITS UNDER ARTICLE 7 OF THE TAX TREATY; 7.3 WITHOUT PREJUDICE TO ABOVE, ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE LEARNED A O AS WELL AS THE HONBLE DRP ERRED IN NOT APPRECIATING THAT T HE REVENUES FROM SUPPLY OF SOFTWARE CAN AT BEST BE SUB JECTED TO LAX AS BUSINESS PROFITS UNDER THE ARTICLE 7 READ WITH ARTICLE 5 OF THE TAX TREATY (I.E. IN THE EVENT IT IS HELD T HAT THE APPELLANT CONSTITUTES A PE IN INDIA). 9 7.4 ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE LEARNED AO AS WELL AS THE HONBLE DRP ERRED IN NOT FOLLOWING THE DECISION OF JURISDICTIONAL HONBLE DE LHI HIGH COURT IN CASE OF NOKIA NETWORKS OY (253 CTR 417) AN D ERICSSON A.I3. (19 ITR (TRIB) 341) AND VARIOUS OTHE R JUDICIAL PRECEDENTS, SUPPORTING APPELLANT'S ABOVE CONTENTION S 8. ON THE FAC1S AND CIRCUMSTANCES OF THE CASE AND IN LAW, DIE LEARNED AO ERRED IN. LEVYING INTEREST TINDER SE CTION 234B OF THE ACT. 5. THE REPRESENTATIVES OF BOTH THE SIDES WERE HEARD AT LENGTH, THE CASE RECORDS CAREFULLY PERUSED AND WITH THE ASSISTA NCE OF THE LD. COUNSEL, WE HAVE CONSIDERED THE DOCUMENTARY EVIDENC ES BROUGHT ON RECORD IN THE FORM OF PAPER BOOK IN LIGHT OF RULE 1 8(6) OF ITAT RULES AND HAVE ALSO CONSIDERED THE JUDICIAL DECISIONS REL IED UPON BY BOTH THE SIDES. 6. AT THE VERY OUTSET, IN OUR CONSIDERED OPINION, T HERE CANNOT BE ANY DECISION, WHICH WOULD BE FACTUALLY IDENTICAL TO THE FACTS OF THE ASSESSEE, MUTATIS MUTANDIS , IN ORDER TO ADOPT THE RATIO LAID DOWN BY VARIOUS HIGH COURTS AS WELL AS THE HON'BLE SUPREME COURT. IN FACT, ALL THE DECISIONS OF THE HON'BLE HIGH COURT, RELIED UPO N BY THE LEARNED 10 COUNSEL FOR THE ASSESSEE, ARE BASED ON SPECIFIC FAC TS WHERE THE HON'BLE HIGH COURT HAS LAID DOWN THE PROPOSITIONS AFTER ANA LYSING THE INTENTION OF THE PARTIES ON THE BASIS OF CONTRACTS/AGREEMENTS ENTERED INTO BETWEEN THEM. HOWEVER, WE FIND THAT THE ONLY DECISI ON WITH IDENTICAL FACTS IS THE DECISION OF THE TRIBUNAL IN ASSESSEES OWN CASE IN ITA NOS. 5253 TO 5256/2011 FOR A.YS200506 TO 200809, WHICH WE WILL CONSIDER LATER ON. 7. FACTS, AS CULLED OUT FROM THE RECORD, SHOW THAT THE APPELLANT IS A COMPANY INCORPORATED IN PEOPLES REPUBLIC OF CHINA AND IS PRIMARILY ENGAGED IN THE BUSINESS OF SUPPLYING (ON OFFSHORE B ASIS) NON-TERMINAL PRODUCTS, THAT IS, ADVANCED TELE-COMMUNICATION NETW ORK EQUIPMENT, NAMELY, CORE AND ACCESS NETWORK EQUIPMENT, MOBILE N ETWORK EQUIPMENT AND DATA COMMUNICATIONS EQUIPMENT ETC. FO R USE IN FIXED AND MOBILE PHONE NETWORKS AND TERMINAL PRODUCTS, TH AT IS, MOBILE PHONE HANDSETS TO VARIOUS CUSTOMERS (INCLUDING CUST OMERS IN INDIA). AS ALLEGED, THE SAID SUPPLIES WERE MADE ON PRINCIPAL T O PRINCIPAL BASIS AND PROPERTY IN EQUIPMENT WAS TRANSFERRED TO INDIAN CUS TOMERS OUTSIDE INDIA. 11 8. THE APPELLANT COMPANY, HUAWEI CHINA (HC) HAD SUB SIDIARY IN INDIA, NAMELY, HUAWEI TELECOMMUNICATIONS INDIA COMP ANY PRIVATE LTD. (HI). DURING THE YEAR UNDER CONSIDERATION, HC PROV IDED SERVICES TO HI UNDER THE TERMS OF TECHNICAL SERVICE AGREEMENT [TSA ]. HI IS INVOLVED IN THE PROVISION OF INTEGRATION, INSTALLATION AND C OMMISSIONING SERVICES IN RELATION TO TELECOM NETWORK EQUIPMENT SUPPLIED F ROM OUTSIDE INDIA. 9. THE APPELLANT OFFERED REVENUES ACCRUED FROM PROV ISION OF TECHNICAL SERVICES TO HI ON GROSS BASIS AND PAID TA XES IN ACCORDANCE WITH THE PROVISIONS OF ARTICLE 12 OF THE DOUBLE TAX ATION AVOIDANCE AGREEMENT [DTAA]. THE APPELLANT HAS ALSO EARNED REV ENUE ON ACCOUNT OF SALE OF TELECOM NETWORK EQUIPMENT AND TERMINAL E QUIPMENT/MOBILE HANDSETS BUT HAS NOT OFFERED THE REVENUE FOR TAXATI ON. 10. THE INTERNATIONAL TRANSACTIONS RELATING TO PROV ISION OF TECHNICAL SERVICES AND CONTRACT SOFTWARE DEVELOPMENT SERVICES WERE REFERRED TO THE TPO, WHICH TRANSACTIONS WERE STUDIED/ANALYSED B Y THE TPO AND NO ADJUSTMENTS WERE RECOMMENDED BY THE TPO. 12 11. ON 17.02.2009, SURVEY OPERATION U/S 133A OF THE ACT WAS CONDUCTED IN THE OFFICE PREMISES OF HI. DURING THE COURSE OF SURVEY, SEVERAL INCRIMINATING DOCUMENTS WERE FOUND, COPIES OF WHICH WERE OBTAINED AND INVENTORIZED. STATEMENTS OF VARIOUS SE NIOR EXECUTIVES WERE ALSO RECORDED. 12. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, TH E ASSESSEE WAS CONFRONTED WITH THE IMPOUNDED DOCUMENTS AND EXPLANA TION WAS SOUGHT. THE ASSESSEE WAS SPECIFICALLY ASKED TO EXPL AIN AS TO WHY REVENUE FROM SUPPLY AND INSTALLATION OF EQUIPMENT S HOULD NOT BE TAXED. 13. IN ITS REPLY, THE ASSESSEE STATED THAT, IT BEIN G A TAX RESIDENT OF CHINA, HAS OPTED TO BE TAXED IN INDIA, AS PER TAX T REATY ENTERED INTO BETWEEN INDIA AND CHINA. IT WAS EXPLAINED THAT THE INCOME DERIVED BY HC FROM SUPPLY OF TELECOMMUNICATION EQUIPMENT TO IN DIAN CUSTOMERS QUALIFIES AS BUSINESS PROFITS AND, ACCORDINGLY, TAX ABILITY OF SUCH INCOME IS GOVERNED BY THE PROVISIONS OF ARTICLE 7 OF INDIA CHINA TAX TREATY. IT WAS EXPLAINED THAT AS PER ARTICLE 7(1) OF THE INDIA CHINA TAX TREATY, BUSINESS PROFITS EARNED BY A CHINESE TAX RESIDENT A RE TAXABLE IN INDIA ONLY IF THAT CHINESE RESIDENT CARRIES ON BUSINESS I N INDIA THROUGH A PE IN 13 INDIA. SUPPLY CONTRACTS WITH INDIAN CUSTOMERS WERE NEGOTIATED THROUGH ELECTRONIC MEANS OR THROUGH SHORT VISITS OF HUWEI C HINAS PERSONNEL AT THE CUSTOMER LOCATIONS IN INDIA AND ALL CONTRACTS W ERE ACCEPTED AND CONCLUDED BY HC OUTSIDE INDIA. THEREFORE, THERE IS NO FIXED PLACE PE IN INDIA. 14. IT WAS EXPLAINED THAT THE POWER TO NEGOTIATE, D ECIDE, VARY AND ACCEPT THE TERMS OF SUPPLY CONTRACTS ON BEHALF OF H C VESTS IN THE BOARD OF DIRECTORS OF HC WHO RESIDE IN CHINA. IT WAS ONCE AGAIN CONTENDED THAT THE ASSESSEE DOES NOT HAVE A DEPENDENT AGENT P E IN INDIA. IN OTHER WORDS, IT WAS EXPLAINED THAT HI DOES NOT QUAL IFY AS DEPENDENT AGENCY PE OF THE ASSESSEE. 15. IT WAS FIRMLY CONTENDED THAT HI PROVIDED MARKET SUPPORT SERVICES AND OTHER PRELIMINARY AND AUXILIARY SERVICES TO THE OVERSEAS HUAWEI, THAT IS, THE ASSESSEE. IT WAS EXPLAINED THAT THE MA RKET SUPPORT SERVICES PROVIDED UNDER THE SERVICE AGREEMENT ARE PREPARATOR Y/AUXILIARY IN NATURE AND IN TERMS OF ARTICLE 5 OF THE TAX TREATY. OTHER THAN PRELIMINARY AND AUXILIARY SERVICES PROVIDED BY HI T O HC, HI CARRIED OUT THE FOLLOWING ACTIVITIES IN INDIA ON ITS OWN ACCOUN T UNDER SEPARATE 14 BUSINESS ARRANGEMENTS WITH CUSTOMERS AND NOT ON BEH ALF OF THE ASSESSEE: 1. SALE OF TELECOM NETWORK EQUIPMENT 2. PROVISION OF INSTALLATION, TESTING AND COMMISSIONIN G SERVICES IN RELATION TO VARIOUS TELECOM NETWORK EQUIPMENT 3. PROVISION OF TRAINING SERVICES TO TELECOM OPERATORS IN CONNECTION WITH OPERATION OF TELECOM NETWORKS, 4. TECHNICAL SUPPORT SERVICES TO TELECOM OPERATORS, AN D 5. PROVISION OF MANAGE SERVICES AND ANNUAL MAINTENANCE SERVICES FOR VARIOUS CUSTOMERS. THEREFORE, THERE IS NO SERVICE PE IN INDIA AND ALSO NO INSTALLATION PE IN INDIA. 16. AFTER EXAMINING THE DOCUMENTS IMPOUNDED DURING SURVEY PROCEEDINGS, CONSIDERING THEM IN THE LIGHT OF THE S TATEMENTS OF THE KEY EMPLOYEES, THE ASSESSING OFFICER PROCEEDED TO DECID E WHETHER THERE IS ANY BUSINESS CONNECTION OF THE ASSESSEE IN INDIA, W ITHIN THE MEANING OF SECTION 9(1)(I) OF THE ACT, READ WITH THE SCOPE OF TOTAL INCOME AS PROVIDED IN SECTION 5 OF THE ACT. THE ASSESSING OFF ICER WAS OF THE OPINION THAT, AS PER CONJOINT READING OF SECTION 5( 2) AND SECTION 9(1)(I) OF THE ACT, ONLY IF THE INCOME IS ARISING DIRECTLY OR INDIRECTLY THROUGH OR 15 FROM ANY BUSINESS CONNECTION IN INDIA, IT CAN BE TA XED IN INDIA. THE ASSESSING OFFICER NOTICED THAT THE FINANCE ACT, 200 3 WITH EFFECT FROM 1 ST APRIL, 2004 HAS INSERTED TWO NEW EXPLANATIONS TO CL AUSE (I) OF SECTION 9(1) CLARIFYING THAT THE EXPRESSION BUSINE SS CONNECTION WILL INCLUDE A PERSON ACTING ON BEHALF OF NON-RESIDENT A ND WHO CARRIED ON CERTAIN ACTIVITIES. 17. REFERRING TO THE DECISION OF THE HON'BLE SUPREM E COURT IN THE CASE OF CIT VS R.D AGARWAL AND CO. 56 ITR 20 AND TH E HON'BLE BOMBAY HIGH COURT IN THE CASE OF BLUE STAR ENGINEERING CO VERSUS CIT 73 ITR 283, THE ASSESSING OFFICER CAME TO THE CONCLUSION T HAT THE ASSESSEE HAS BUSINESS CONNECTION IN INDIA U/S 9(1)(I) OF THE ACT . 18. REFERRING TO THE DECISION OF THE TRIBUNAL IN TH E CASE OF NOKIA NETWORKS OY VS. JCIT 94 TAXMANN.COM 111 (DEL), THE LD. COUNSEL FOR THE ASSESSEE STATED THAT THE RATIO DECIDENDI EMANAT ING FROM THE AFORESAID DECISIONS IS THAT THE FOLLOWING CONDITION S SHOULD EXIST TO CONSTITUTE BUSINESS CONNECTION IN INDIA: A REAL AND INTIMATE RELATION MUST EXIST BETWEEN THE TRADING ACTIVITIES CARRIED ON OUTSIDE INDIA BY A NON-RESIDE NT AND THE ACTIVITIES IN INDIA 16 THE RELATION CONTRIBUTES DIRECTLY AND INDIRECTLY TO THE EARNINGS OF INCOME BY THE NON-RESIDENT IN HIS BUSINESS; THERE SHOULD BE AN ELEMENT OF CONTINUITY BETWEEN TH E BUSINESS OF THE NON-RESIDENT AND THE ACTIVITY IN INDIA. TO P UT IT APPARENTLY, STRAY OR ISOLATED TRANSACTION IS NOT NO RMALLY REGARDED AS A BUSINESS CONNECTION. 19. ACCORDINGLY, IF NO OPERATIONS OF BUSINESS ARE C ARRIED OUT IN THE TAXABLE TERRITORY OF INDIA, IT FOLLOWS THAT NO PART OF THE INCOME ACCRUING OR ARISING ABROAD CAN BE DEEMED TO ACCRUE OR ARISE IN INDIA THROUGH OR FROM ANY BUSINESS CONNECTION IN INDIA. 20. WE DO NOT FIND ANY FORCE IN THIS SUBMISSION OF THE LD. COUNSEL FOR THE ASSESSEE. THE FACTS ON RECORD SHOW THAT REAL A ND INTIMATE RELATIONSHIP EXISTS BETWEEN HC AND HI, IN AS MUCH A S, THE SALE OF TELECOMMUNICATION NETWORK EQUIPMENT WOULD SERVE NO PURPOSE OF A BUYER UNLESS THE TELECOMMUNICATION NETWORK EQUIPMEN T ARE INSTALLED AND COMMISSIONED AND THIS IS DONE BY HI IN INDIA. H ENCE, THE ACTIVITIES OF HC CONTINUE TILL THE TELECOMMUNICATION NETWORK E QUIPMENT ARE INSTALLED AND COMMISSIONED IN INDIA. THIS ENTIRE S EQUENCE CONTRIBUTES 17 DIRECTLY TO THE EARNING OF INCOME OF HC IN ITS BUSI NESS EVEN IF THE SALE TRANSACTION HAS BEEN CONCLUDED OUTSIDE INDIA. 21. THE LD. COUNSEL FOR THE ASSESSEE, THROUGH WRITT EN SUBMISSIONS, STATED THAT THE CONTENTION OF THE ASSESSING OFFICER THAT EMPLOYEES OF THE HUAWEI CHINA PERFORMED NEGOTIATION AND BIDDING ACTIVITIES FROM THE OFFICE PREMISES OF HUAWEI INDIA IS FACTUALLY IN CORRECT. IN THIS REGARD, IT IS SUBMITTED THAT THE EMPLOYEES OF THE A PPELLANT WHO VISITED INDIA DID NOT HAVE UNRESTRICTED ACCESS TO HUAWEI IN DIAS OFFICE PREMISES. FURTHER, COPY OF CERTIFICATE FROM THE HUA WEI INDIA, HUMAN RESOURCE HEAD IS ENCLOSED AT PAGE 63A OF THE PAPER BOOK, CERTIFYING THAT THE PREMISES AND FACILITIES OF HUAWEI INDIA WE RE ALLOWED TO EMPLOYEES OF HUAWEI CHINA VISITING INDIA ONLY ON A CASE SPECIFIC BASIS, THAT, TOO, ON THE BASIS OF SPECIFIC REQUEST MADE BY HUAWEI CHINA. FURTHER, IT IS ALSO BEEN CERTIFIED THAT EVEN SUCH P ERSONNEL WERE NOT GIVEN FREE ACCESS TO ALL AREAS AND FACILITIES WITHI N THE PREMISES. 22. WE DO NOT FIND MUCH MERIT IN THIS CLAIM OF TH E ASSESSEE. THE ENTIRE TRANSACTION OF THE SALE OF EQUIPMENT OFFSHOR E HAS TO BE CONSIDERED FROM ANOTHER ANGLE. IN OUR CONSIDERATION OF THE ENTIRE FACTS, THE DOMINANT PURPOSE OF THE HC IS NOT TO SEL L TELECOMMUNICATION 18 EQUIPMENT BUT TO COMMISSION IT AFTER DUE CUSTOMISAT ION OF HARDWARE AND SOFTWARE IN ACCORDANCE WITH THE REQUIREMENT OF TELE- COMMUNICATION SERVICE PROVIDER. IN OTHER WORDS, THE INDIAN BUYERS BUSINESS PURPOSE WOULD NOT CONCLUDE MERELY ON PURCH ASING OF EQUIPMENT FROM HC, THE SAME HAS TO BE CUSTOMISED AN D COMMISSIONED TO THE SATISFACTION OF THE INDIAN TELECOM SERVICE P ROVIDERS. THUS, THE DOMINANT PURPOSE IS TO SET UP THE EQUIPMENT AS PER REQUIREMENT OF THE TELECOM SERVICE PROVIDERS. 23. THE SUPREME COURT IN THE CASE OF BSNL [2006] 3 STT 245 HAS EXPLAINED THE DOMINANT NATURE OF AN EQUIPMENT. THE RELEVANT PORTION OF THE SAME IS AS UNDER: 'THE REASON WHY THESE SERVICES DO NOT INVOLVE A SAL E FOR THE PURPOSES OF ENTRY 54 OF LIST - II IS, AS WE SEE IT, FOR REASONS ULTIMATELY ATTRIBUTABLE TO THE PRINCIPLES ENUNCIATE D IN GANNON DUNKERLEY CASE, NAMELY, IF THERE IS AN INSTRUMENT O F CONTRACT WHICH MAY BE COMPOSITE IN FORM IN ANY CASE OTHER THAN THE EXCEPTIONS IN ARTICLE 366(29-A ), UNLESS THE TRANSACTION IN TRUTH REPRESENTS TWO DISTINCT AND SEPARATE CONTRACTS AND IS DISCERNI BLE AS SUCH, THEN THE STATE WOULD NOT HAVE THE POWER TO SEPARATE THE AGREEMENT TO SELL FROM THE AGREEMENT TO RENDER SERVICE, AND IMPO SE TAX ON THE SALE. THE TEST THEREFORE FOR COMPOSITE CONTRACTS OT HER THAN THOSE MENTIONED IN ARTICLE 366 (29-A) CONTINUES TO BE: DID THE PARTIES 19 HAVE IN MIND OR INTEND SEPARATE RIGHTS ARISING OUT OF THE SALE OF GOODS? IF THERE WAS NO SUCH INTENTION THERE IS NO S ALE EVEN IF THE CONTRACT COULD BE DISINTEGRATED. THE TEST FOR DECID ING WHETHER A CONTRACT FALLS INTO ONE CATEGORY OR THE OTHER IS TO AS WHAT IS 'THE SUBSTANCE OF THE CONTRACT'. WE WILL, FOR THE WANT O F A BETTER PHRASE, CALL THIS THE DOMINANT NATURE TEST.' 24. BEFORE US, THE LD. COUNSEL FOR THE ASSESSEE VEH EMENTLY STATED THAT THE INDIAN PE I.E. HI HAS NO ROLE TO PLAY IN S UPPLYING THE TERMINAL EQUIPMENT. WE DO NOT ACCEPT THIS CONTENTION OF THE LD. COUNSEL FOR THE ASSESSEE AS THE EVIDENCE ON RECORD CLEARLY SHOW S THAT INDIAN RESOURCE WAS INVOLVED IN DEAL NEGOTIATIONS ON BEHAL F OF THE APPELLANT. PURCHASE ORDER FROM HFCL INFOTEL LTD DATED 13.020.2 009 CLEARLY REFERS TO THE EMAIL OFFER OF SHRI ARUNDEEP KAKKAR WHO IS A N EMPLOYEE OF HI. IT IS EVIDENT THAT SHRI ARUNDEEP KAKKAR IS REPRESEN TING THE ASSESSEE FOR FINALIZATION OF CONTRACT/PURCHASE ORDER. 25. MOREOVER, THE JOINT BIDDING TEAM INCLUDED RESOU RCES FROM INDIAN ENTITY AS WELL AS HC, WHICH CLEARLY HIGHLIGHTS THAT THE INDIAN RESOURCES WERE PARTICIPATING THE BID PROCESS INCLUDING DEAL N EGOTIATIONS ALONGWITH CHINESE RESOURCES. 20 26. WE FIND THAT THERE IS A LETTER FROM BSNL, WHICH IS PART OF ANNEXURE B 14, WHICH CONFIRMS THE FACT THAT THE RE SPONSIBILITY FOR INSTALLATION AND COMMISSIONING ALONG WITH SUPPLY OF EQUIPMENT IS WITH HC. 27. THE LETTER IS AS UNDER: 21 28. THIS ALSO PROVES THAT THE DOMINANT PURPOSE OF T HE AGREEMENT IS NOT THE SALE BUT TO COMMISSION THE EQUIPMENT, WHICH IS POSSIBLE ONLY AFTER TAKING CERTAIN ACTIVITIES IN INDIA IN RESPECT OF THE EQUIPMENT SUPPLIED BY THE APPELLANT. 29. SIMILARLY PURCHASE ORDER IN RESPECT OF AIRTEL W HICH IS PART OF ANNEXURE B16, DATED 28.10.2005 RELATES TO THE INST ALLATION/ COMMISSIONING. THIS ALSO DISPROVES THE CLAIM OF THE ASSESSEE THAT INSTALLATION IS NOT THEIR SCOPE OF WORK. THE LETTE R IS AS UNDER: 22 23 30. HAVING DECIDED THE BUSINESS CONNECTION, THE ASS ESSING OFFICER PROCEEDED BY EXAMINING WHETHER THE ASSESSEE HAS ANY PE IN INDIA. THE ASSESSING OFFICER FOUND THAT THE STATEMENTS OF SENI OR EMPLOYEES, ANALYSIS OF SURVEY DOCUMENTS, ANALYSIS OF AGREEMENT S AND ANALYSIS OF SUBMISSIONS OF THE ASSESSEE ESTABLISHED THAT HOW TH E BUSINESS OF THE ASSESSEE IS CARRIED OUT IN INDIA WITH THE HELP OF T HEIR EMPLOYEES WHO REGULARLY WORK FROM THE PREMISES IN INDIA BELONGING TO HI AND THEREBY CREATING A FIXED PLACE PE UNDER ARTICLE 5(1) OF THE DTAA. 31. THE ASSESSING OFFICER FURTHER OBSERVED THAT THE EMPLOYEES OF THE ASSESSEE HAVE VISITED INDIA TO PERFORM ACTIVITIES R ELATING TO THE INSTALLATION PROJECTS, WHICH HAVE LASTED FOR MORE T HAN 183 DAYS THEREBY CREATING INSTALLATION PE OF THE ASSESSEE IN INDIA UNDER ARTICLE 5(2)(J). THE ASSESSING OFFICER FURTHER OBSERVED THAT THE EMP LOYEES OF THE ASSESSEE HAVE RENDERED SERVICES IN INDIA OTHER THAN IN THE NATURE OF TECHNICAL SERVICES AND THAT SUCH SERVICES HAVE CONT INUED IN INDIA FOR MORE THAN 183 DAYS THEREBY CREATING SERVICE PE IN INDIA UNDER ARTICLE 5(2)(K). ASSESSING OFFICER FURTHER OBSERVED THAT TH E PROCESS OF JOINT BIDDING DONE BY THE ASSESSEE AND HI DOES RESULT INT O DEPENDENT AGENCY PE UNDER ARTICLE 5(4) OF THE TAX TREATY. 24 32. BEFORE US, THE LEARNED COUNSEL FOR THE ASSESSEE VEHEMENTLY STATED THAT THE PRODUCTS IN WHICH THE ASSESSEE DEAL S ARE TECHNICALLY COMPLEX ADVANCED PRODUCTS AND IT IS THE TECHNOLOGY AND MANUFACTURING EFFORTS WHICH PLAY AN IMPORTANT ROLE IN PRODUCT SEL LING. ACCORDINGLY, IT IS THE TECHNOLOGY AND NOT MARKETING WHICH ENABLES T HE APPELLANT TO EFFECTIVELY SELL ITS PRODUCTS TO CUSTOMERS. THE LD. COUNSEL EXPLAINED THAT THE ASSESSEE HAS ENTERED INTO TSA WITH HI AND THE ASSESSEE PROVIDED CERTAIN TECHNICAL PERSONNEL TO HI. FEES FO R TECHNICAL SERVICES ACCRUING TO THE APPELLANT AS PER THE TERMS OF TSA W AS DULY OFFERED TO TAX IN INDIA AND THE INCOME TAX LIABILITY THEREON W AS DULY DISCHARGED BY WAY OF TAXES WITHHELD AT SOURCE BY HI. 33. REFERRING TO VARIOUS CONTRACTS WITH INDIAN CUST OMERS, THE LD. COUNSEL FOR THE ASSESSEE STATED THAT THESE CONTRACT S CLEARLY SPECIFY THAT THE PAYMENTS UNDER THE CONTRACT WILL BE PAID T O THE APPELLANT IN FOREIGN CURRENCY AND THE TITLE TO THE EQUIPMENT SHA LL PASS TO THE BUYER OUTSIDE INDIA. IT IS THE SAY OF THE LD. COUNSEL FOR THE ASSESSEE THAT THE RISK AND TITLE OF THE GOODS PASSES FROM THE SELLER TO THE BUYER OUTSIDE INDIA AS GOODS WERE HANDED OVER TO BUYER OUTSIDE IN DIA. THE LD. COUNSEL FOR THE ASSESSEE FURTHER EXPLAINED THAT THE TELECOM EQUIPMENTS WERE SUPPLIED TO THE INDIAN TELECOM OPER ATORS/ CUSTOMERS 25 DIRECTLY FROM OUTSIDE INDIA WHICH IS CLEARLY ESTABL ISHED FROM THE CONTRACTUAL SUPPLY TERMS AGREED WITH VARIOUS CUSTOM ERS AND IT CLEARLY DEMONSTRATES THAT TITLE IN TELECOM EQUIPMENT WAS TR ANSFERRED OUTSIDE INDIA AND THE CONSIDERATION FOR SUPPLY OF TELECOM E QUIPMENT WAS RECEIVED OUTSIDE INDIA. 34. THE LD. COUNSEL FOR THE ASSESSEE REPEATEDLY REF ERRED TO THE CONTRACTS AND CONCLUDED BY SAYING THAT THE ORDERS A RE DIRECTLY PLACED BY THE CUSTOMER AGAINST AN INTERNATIONAL PRODUCT CA TALOGUE ENLISTING THE MODELS ALONG WITH FEATURES AND SUCH ORDERS ARE ACCEPTED OUTSIDE INDIA AND TITLE IN GOODS IS TRANSFERRED OUTSIDE OF INDIA. IT WAS ONCE AGAIN EXPLAINED THAT HI PROVIDED MARKETING SUPPORT SERVICES AND OTHER PRELIMINARY AND AUXILIARY SERVICES TO THE OVERSEAS HC. IT WAS ONCE AGAIN CLARIFIED THAT THE MARKET SUPPORT SERVICES PR OVIDED UNDER THE SERVICE AGREEMENT ARE PREPARATORY AND AUXILIARY I N NATURE IN TERMS OF ARTICLE 5 OF THE TAX TREATY. 35. THE FIRST AND FOREMOST ISSUE TO BE DECIDED IS A S TO WHETHER TITLE AND RISK PASS OUTSIDE INDIA OR NOT. 26 36. WE HAVE CAREFULLY PERUSED THE CLAUSES OF VARIOU S AGREEMENTS BROUGHT TO OUR NOTICE. IN THE GOODS SALES AGREEME NT BETWEEN HC AND RELIANCE INFOCOMM LTD FOR SUPPLY OF EQUIPMENT, ARTI CLE 6.3 CLEARLY PROVIDES THAT THE OWNER SHALL HAVE THE RIGHT TO REJ ECT THE ENTIRE SHIPMENT/GOODS OR PART THEREOF. 37. ARTICLE 6.3 READS AS UNDER: RISK OF LOSS OF GOODS SHALL PASS FROM SELLER TO OW NER UPON ACCEPTANCE OF THE GOODS . IN THE EVENT ANY SHORT/INCORRECT/DAMAGED SHIPMENT [AND OR GOODS CONT AINED THEREIN OR DAMAGED] OWNER SHALL HAVE THE RIGHT TO R EJECT THE ENTIRE SHIPMENT/GOODS OR PART THEREOF. IN SUCH AN E VENT, WITHOUT IN ANY WAY LIMITING ANY RIGHTS AND REMEDIES OF OWNER UNDER THIS AGREEMENT OR APPLICABLE LAW IN RESPECT O F SUCH A REJECTED SHIPMENT/GOODS, THE SELLER SHALL, AT ITS O WN COST/EXPENSE, REPLACE SUCH A REJECTED SHIPMENT AND/ OR THE DAMAGED/INCORRECT GOODS AND SUPPLY THE UNDELIVERED PART OF THE SHORT SHIPPED WITHIN A PERIOD OF 20 DAYS FROM T HE DATE OF NOTIFICATION BY THE OWNER OF ITS REJECTION. 38. A SIMILAR CLAUSE IS PROVIDED IN THE CONTRACT WI TH HTL WHEREIN UNDER ARTICLE 7.3, IT IS PROVIDED : 27 THE SELLER SHALL, AT ITS OWN COST AND EXPENSE REPL ACE ALL OR ANY EQUIPMENT WHICH ARE DEFECTIVE. 39. SIMILARLY, IN THE CONTRACT WITH STERLITE OPTICA L TECHNOLOGIES LTD AT CLAUSE 10.5.5, IT IS PROVIDED AS UNDER ANY EQUIPMENT REJECTED DUE TO DEFECT IN QUALITY AR ISING DURING INSPECTION BY THE BUYER OR BY CUSTOMER WILL BE RECTIFIED BY THE SUPPLIER FREE OF COST AT SITE OF P LACE OF EQUIPMENT 40. THE LD. COUNSEL FOR THE ASSESSEE VEHEMENTLY STA TED THAT RISK MAY PASS AT A LATER POINT OF TIME BUT THE TITLE PAS SES AT THE INTENT OF THE PARTIES AND IN THE PRESENT CASE, TITLE HAS PASS ED OUTSIDE INDIA. 41. AT THIS STAGE, IT WOULD BE PERTINENT TO UNDERST AND THAT IF THE BUYER HAD THE RIGHT TO REJECT THE EQUIPMENT ON FAIL URE OF ACCEPTANCE TEST, THEN HOW THE TRANSACTIONS CAN BE CONSIDERED A S COMPLETED OUTSIDE INDIA WHEN THE BUYER HAD THE RIGHT TO REJEC T THE EQUIPMENT IN INDIA. FOR THIS PROPOSITION, WE DRAW SUPPORT FROM THE DECISION OF THE HON'BLE HIGH COURT OF DELHI IN THE CASE OF ERICSSON A.B IN ITA NO. 28 504/2007 AND OTHERS ORDER DATED 23.12.2011 WHEREIN THE HON'BLE HIGH COURT HELD AS UNDER: 41. WE, FIND THAT THE TERMS OF CONTRACT MAKE IT CL EAR THAT ACCEPTANCE TEST IS NOT A MATERIAL EVENT FOR PASSING OF THE TITLE AND RISK IN THE EQUIPMENT SUPPLIED. IT IS BECAUSE OF TH E REASON THAT EVEN IF SUCH TEST FOUND OUT THAT THE SYSTEM DID NOT CONFORM TO THE CONTRACTIVE PARAMETERS, AS PER ARTICLE 21.1 OF THE SUPPLY CONTRACT, THE ONLY CONSEQUENCE WOULD BE THAT THE CELLULAR OPE RATOR WOULD BE ENTITLED TO CALL UPON THE ASSESSEE TO CURE THE DEFE CT BY REPAIRING OR REPLACING THE DEFECTIVE PART. IF THERE WAS DELAY CAUSED DUE TO THE ACCEPTANCE TEST NOT BEING COMPLIED WITH, ARTICLE 19 OF THE SUPPLY CONTRACT PROVIDED FOR DAMAGES. THUS, THE TAX ABLE EVENT TOOK PLACE OUTSIDE INDIA WITH THE PASSING OF THE PR OPERTY FROM SELLER TO BUYER AND ACCEPTANCE TEST WAS NOT DETERMI NATIVE OF THIS FACTOR. THE POSITION MIGHT HAVE BEEN DIFFERENT IF THE BUYER HAD THE RIGHT TO REJECT THE EQUIPMENT ON THE FAILURE OF THE ACCEPTANCE TEST CARRIED OUT IN INDIA. 42. FROM THE ABOVE, IT IS CLEAR THAT THE HON'BLE HI GH COURT HAS MADE IT CLEAR THAT THE POSITION WOULD BE DIFFERENT IF TH E BUYER HAD THE RIGHT TO REJECT THE EQUIPMENT ON FAILURE OF ACCEPTANCE TE ST CARRIED OUT IN INDIA. 29 43. OUR VIEW IS FURTHER FORTIFIED FROM THE DECISION OF THE HON'BLE ANDHRA PRADESH HIGH COURT IN THE CASE OF L & T LTD [2015] TIOL 3055 AND THE HON'BLE SUPREME COURT IN THE CASE OF USHA B ELTRON LTD 7 SCC 58. THE RELEVANT FINDINGS OF THE HON'BLE ANDHRA PR ADESH HIGH COURT AS APPLICABLE TO THE PRESENT CASE READ AS UNDER: 94. IN ADDITION TO POST-DESPATCH INSPECTION, THE SUPPLY CONTRACTS (AS OPPOSED TO THE ERECTION CONTRACTS) ALSO CONTEMP LATE A CERTIFICATION AFTER ERECTION; BY VIRTUE OF THE SAID CLAUSE, THE OWNER CERTIFIES AS TO THE SUCCESSFUL OPERATION OF THE FAC ILITY; THE SAID CERTIFICATION IS GIVEN AFTER THE OWNER INSPECTS THE FACILITY, AND FINDS THAT ALL THE UNITS AND COMPONENTS, WHICH HAVE BEEN SUPPLIED, ARE WORKING; THE SCOPE OF CERTIFICATION EXTENDS NOT ONLY TO THE CIVIL WORK, BUT ALSO TO THE GOODS SUPPLIED UNDER THE SUPP LY CONTRACT; IN ALL THE CONTRACTS, THE SUPPLIER BECOMES ENTITLED TO FULL PAYMENT ONLY UPON RECEIPT OF SUCH CERTIFICATION; THE PAYMEN T IS LINKED TO SUCCESSFUL INSPECTION AND CERTIFICATION; IF THE CON TRACT HAS AN INSPECTION OR A CERTIFICATION CLAUSE, TITLE DOES NO T PASS TILL THE INSPECTION AND CERTIFICATION ARE SUCCESSFUL, AND TH E BUYER/OWNER HAS INDICATED HIS APPROVAL; THE SUPREME COURT, IN U SHA BELLTRON158, HELD THAT TITLE PASSES ONLY UPON CERTIFICATION; AND THE PETITIONERS CONTENTION THAT THE TAKING OVER CERTIFICATE WAS MER ELY FOR ENSURING PROPER QUALITY OF GOODS SUPPLIED, AND DOES NOT RELA TE TO PASSING OF PROPERTY IN THE GOODS, IS NOT TENABLE. 30 96. IN USHA BELTRON LTD.158, THE PETITIONER CONTEND ED THAT THE PROPERTY IN THE GOODS HAD PASSED TO THE GOVERNMENT OF INDIA BEFORE IT ENTERED THE MUNICIPAL LIMITS; THIS WAS A CONTRACT FOR SALE OF SPECIFIC GOODS IN A DELIVERABLE STATE; THE PROPE RTY IN THE GOODS PASSED TO THE BUYER WHEN THE CONTRACT WAS MADE; AND IT WAS IMMATERIAL AS TO WHAT WAS THE TIME OF DELIVERY OF T HE GOODS. CLAUSE 5.5, OF THE BID DOCUMENT THEREIN, PROVIDED FOR THE ISSUE A TAKING OVER CERTIFICATE WHEN THE PERFORMANCE TESTS HAD BEE N SUCCESSFULLY CARRIED OUT; AND, WHILE ISSUANCE OF SUCH A CERTIFIC ATE WOULD CERTIFY RECEIPT OF GOODS IN A SAFE AND SOUND CONDITION, IT WOULD NOT DISCHARGE THE SUPPLIER OF THEIR WARRANTY OBLIGATION S. CLAUSE 6.1 OF THE BID DOCUMENT STIPULATED THAT DELIVERY OF THE GO ODS SHALL BE MADE BY THE SUPPLIER IN ACCORDANCE WITH THE TERMS O F THE CONTRACT; AND THE GOODS WERE TO REMAIN AT THE RISK OF THE SUP PLIER UNTIL DELIVERY WAS COMPLETED. THE SUPREME COURT HELD THAT CLAUSE 5.5 AND 6.1 OF THE BID DOCUMENT CLEARLY INDICATED THAT THE PROPERTY IN THE GOODS REMAINED AT THE RISK OF THE APPELLANT TIL L DELIVERY WAS COMPLETED; IT SHOWED THAT DELIVERY WOULD BE COMPLET ED ONLY AFTER THE TAKE-OVER CERTIFICATE WAS ISSUED; AS PER SECTION 19 OF THE SALE OF GOODS ACT, THE PROPERTY IN THE GOODS PASSES WHEN THE PARTIES INTENDED IT TO PASS; IN THIS CASE THE CONTRACT PROV IDED THAT PROPERTY IN THE GOODS DOES NOT PASS TILL AFTER DELI VERY, AND AFTER SUCCESSFUL TESTING AND ISSUANCE OF THE TAKE-OVER CE RTIFICATE; AND THE HIGH COURT WAS RIGHT IN CONCLUDING THAT THE PRO PERTY IN THE GOODS HAD NOT PASSED AT THE TIME THE GOODS ENTERED THE MUNICIPAL LIMITS. 31 98. SECTION 23 OF THE 1930 ACT STIPULATES THAT TITL E, IN A SALE OF FUTURE GOODS, PASSES ONLY WHEN THE GOODS ARE IN A D ELIVERABLE STATE, THEY ARE UNCONDITIONALLY APPROPRIATED TO THE CONTRA CT, AND THERE IS ASSENT OF THE BUYER. IF THE CONTRACT HAS A POST-DEL IVERY INSPECTION OR A CERTIFICATION CLAUSE, THE UNCONDITIONAL APPROP RIATION, ORDINARILY, TAKES PLACE, AND THE ASSENT OF THE BUYER IS ALSO GI VEN, ONLY UPON INSPECTION AND CERTIFICATION. UNDER SECTION 24 OF THE 1930 ACT TITLE PASSES UPON APPROVAL WHICH, IN THE SUBJECT CO NTRACTS, IS ONLY AFTER INSPECTION. THE POST-DELIVERY INSPECTION CLAU SES IN THE SUBJECT CONTRACTS WOULD FALL WITHIN THE AMBIT OF TH E PHRASE ON APPROVAL IN SECTION 24 AS DELIVERY OF THE GOODS IS TAKEN ONLY AFTER INSPECTION. THE TAKING OVER CERTIFICATE ALSO SHOWS THAT THE BUYER INDICATES HIS APPROVAL ONLY AFTER CERTIFICATION. TH E INSPECTION AND CERTIFICATION CLAUSES IN THE CONTRACT WOULD FALL WI THIN THE AMBIT OF THE PHRASE OTHER SIMILAR TERMS IN SECTION 24 . THE PRESENCE OF AN INSPECTION AND CERTIFICATION CLAUSE IN THE SUPPLY C ONTRACT DEFERS PASSING OF TITLE TILL THE OWNER HAS EXPRESSED ITS A SSENT. SUCH ASSENT IS GIVEN ONLY AFTER INSPECTION AND CERTIFICA TION. 99. SECTION 26 STIPULATES THAT RISK, PRIMA-FACIE, PASSES WITH THE PROPERTY AND, THEREUNDER, UNLESS OTHERWISE AGREED, THE GOODS REMAIN AT THE SELLERS RISK UNTIL THE PROPERTY THERE IN IS TRANSFERRED TO THE BUYER, BUT WHEN THE PROPERTY THEREIN IS TRAN SFERRED TO THE BUYER, THE GOODS ARE AT THE BUYERS RISK WHETHER DEL IVERY HAS BEEN MADE OR NOT. SECTION 26 IS NOT ATTRACTED WHERE THE CONTRACT PROVIDES OTHERWISE. WHILE THE QUESTION, AS TO WHEN TITLE TO THE GOODS IS TRANSFERRED FROM THE SELLER TO THE BUYER, MUST BE DETERMINED FROM THE CONDITIONS STIPULATED IN THE SU BJECT 32 CONTRACTS, IF THE PARTIES HAVE AGREED THAT THE RESP ONSIBILITY FOR RISK OF LOSS AND DAMAGE TO THE GOODS WOULD BE THAT OF THE SUPPLIER TILL ERECTION OF THE PLANT IS COMPLETED, IT IS EVID ENT THAT TRANSFER OF TITLE TO THE GOODS WAS INTENDED TO PASS ONLY ON ERE CTION, AND NOT PRIOR THERETO. 100. SECTION 41(2) OF THE 1930 ACT STIPULATES THAT, UNLESS OTHERWISE AGREED, WHEN THE SELLER TENDERS DELIVERY OF THE GOODS TO THE BUYER HE IS BOUND, ON REQUEST, TO AFFORD THE BU YER A REASONABLE OPPORTUNITY OF EXAMINING THE GOODS FOR THE PURPOSE OF ASCERTAINING WHETHER THEY ARE IN CONFORMITY WITH THE CONTRACT. SECTION42 RELATES TO ACCEPTANCE AND, THEREUNDER, THE BUYER IS DEEMED TO HAVE ACCEPTED THE GOODS WHEN HE INTIMATES TO THE SELLER THAT HE HAS ACCEPTED THEM, OR WHEN THE G OODS HAVE BEEN DELIVERED TO HIM AND HE DOES ANY ACT IN RELATION TO THEM WHICH IS INCONSISTENT WITH THE OWNERSHIP OF THE SELLER. THE POST-DELIVERY INSPECTION CLAUSES, IN THE SUPPLY CONTRACTS, ARE IN CONFORMITY WITH SECTION 41(2) , AND THE CERTIFICATION CLAUSES THEREIN ACCORD WITH THE REQUIREMENT OF SECTION 42 OF THE 1930 ACT. 44. IN LIGHT OF THE AFORESAID DECISIONS, WE ARE OF THE CONSIDERED VIEW THAT THE ASSESSEE CONTINUED TO UNDERTAKE THE RISK O F REJECTION OF THE SUPPLY IN INDIA AND THEREFORE, THERE IS EXTENSION O F BUSINESS OF THE ASSESSEE IN INDIA IN RESPECT OF THE SUPPLY OF EQUIP MENT TO INDIA. 33 45. THOUGH THE ASSESSEE HAS RELIED UPON THE DECISIO N OF THE HON'BLE DELHI HIGH COURT IN THE CASE OF LG CABLES 703/2009 DATED 24.12.2010 BUT THE DECISION OF THE HON'BLE DELHI HIGH COURT IN THE CASE OF ERICSSON AB IS LATER THAN THE DECISION IN THE CASE OF LG CAB LES [SUPRA]. 46. ANSWERING TO QUESTION NO. 96, GIVEN BY YANG KAI JUN, CEO OF HI, STATED THAT MR QIN BIN AND MR. JIANG SHENG OPERATED FROM THE OFFICE OF HI. IN HIS ANSWER, YANG KAIJUN HAD SPECIFICALLY ST ATED THAT QIN BIN AND MR. JIANG SHENG HAD SOMETIMES OPERATED FROM THE OFF ICE OF HI. 47. ONE SHRI ANSHUMAN SAH, IN REPLY TO QUESTION NO. 19, STATED : WE ARE WORKING ON BSNL WIMAX PROJECT FOR WHICH BSN L HAD ISSUED TENDER. THE ENTIRE TEAM HAS BEEN DELIBERATI NG ON VARIOUS ASPECTS OF TECHNOLOGY AND INFORMATION PERTAINING TO TENDER REQUIREMENT. WE HAVE DIFFERENT ROLES TO PLAY BY DIFFERENT MEMBER S LIKE MR. FARLEY ADVISES ON CONTRACTS, MR NITIN IS TECHNICAL PERSON, MR. VIKAS IS SALES PERSON FOR BSNL, MR. ZAU WEI IS ANOTHER SA LES PERSON FROM CHINA. MR. DANIEL IS TECHNICAL SUPPORT PERSON FROM CHINA. TO THE BEST OF MY KNOWLEDGE, MR. NITIN AND MR. VIKAS ARE E MPLOYEES OF HI AND THE OTHER THREE GENTLEMEN ARE FROM HC. 34 48. ON PERUSAL OF THE KEY STATEMENTS RECORDED AT TH E TIME OF SURVEY OPERATIONS SHOWS THAT HI RESOURCES WERE INVOLVED IN NEGOTIATIONS WITH CUSTOMERS IN INDIA. REPRESENTATIVES OF HC WERE ALL OWED TO USE THE PREMISES OF HI. 49. ONE OF THE ARGUMENTS OF THE LD. COUNSEL FOR THE ASSESSEE IS THAT HC WAS NOT INVOLVED IN INSTALLATION OR COMMISSION O F TELECOM NETWORK EQUIPMENT IN INDIA WHICH WAS BEING DONE BY HI UNDER INDEPENDENT CONTRACTS WITH INDIAN CUSTOMERS/TELECOM OPERATORS. HC HAD MERELY SUPPLIED TELECOM NETWORK EQUIPMENT TO INDIAN CUSTOM ERS/TELECOM OPERATION WHO HAD NO ROLE TO PLAY IN INSTALLATION / COMMISSIONING OF TELECOM NETWORK SUPPLY TO INDIAN CUSTOMERS/ TELECOM NETWORK OPERATORS. 50. HUAWEI INDIA HAD EXECUTED INDEPENDENT CONTRACTS WITH TELECOM OPERATORS UNDER WHICH RESPONSIBILITY FOR INSTALLATI ON, ERECTION AND COMMISSIONING OF THE TELECOM NETWORK EQUIPMENT REST ED WITH HI. IT IS THE SAY OF THE LD. COUNSEL FOR THE ASSESSEE THAT HI IS FULLY EQUIPPED TO PERFORM INSTALLATION ACTIVITIES INDEPENDENTLY AND H AS NECESSARY TECHNICAL AND OPERATIONAL CAPABILITIES AT ITS DISPO SAL TO RENDER SUCH SERVICES INDEPENDENTLY. INSTALLATION, TESTING AND C OMMISSIONING ACTIVITIES WERE UNDERTAKEN BY HI IN ITS INDEPENDENT CAPACITY UNDER 35 SEPARATE CONTRACTS WITH INDIAN CUSTOMERS/ TELECOM O PERATORS. INVOICES FOR INSTALLATION, TESTING AND COMMISSIONING SERVICE S ARE INDEPENDENTLY RAISED BY HI AND PAID FOR BY THE CUSTOMERS DIRECTLY TO HI. 51. THE LD. COUNSEL FOR THE ASSESSEE FURTHER EXPLAI NED THAT HC HAS PROVIDED CERTAIN TECHNICAL PERSONNEL CAPABLE OF REN DERING TECHNICAL SERVICES TO HI UNDER TSA. SUCH SERVICES, BEING TECH NICAL IN NATURE, WERE CONSIDERED AS FEES FOR TECHNICAL SERVICES AS PER ARTICLE 12 OF THE INDIA-CHINA TAX TREATY AND ACCORDINGLY, REVENUE FROM SUCH SERVICES WAS OFFERED TO TAX IN THE RETURN OF INCOME. 52. THIS SUBMISSION OF THE LD. COUNSEL FOR THE ASSE SSEE HAS TO BE EXAMINED FROM THE FACTS EMANATING FROM RECORD. AS M ENTIONED ELSEWHERE, THE ASSESSEE ITSELF HAD STATED THAT ITS PRODUCTS IN WHICH THE APPELLANT DEALS ARE TECHNICALLY COMPLEX ADVANCED PR ODUCTS AND IT IS THE TECHNOLOGY AND MANUFACTURING EFFORTS WHICH PLAY S AN IMPORTANT ROLE IN PRODUCT SELLING. 36 53. FACTS ON RECORD SHOW THAT THE FOREIGN EXPATS EX PERTS IN THE TECHNOLOGY BEHIND THE EQUIPMENT WERE PRESENT IN IND IA ON SITE IN ORDER TO SUPERVISE THE INSTALLATION AND COMMISSIONING PRO CESS. IN ASSESSEES OWN CONTENTION, HI WAS NOT TECHNICALLY EQUIPPED TO DO INSTALLATION AND COMMISSIONING ON ITS OWN AND THUS REQUISITIONED THE EXPATS TO SUPERVISE THE INSTALLATION PROCESS AT SITE IN INDIA . THEREFORE, CONSIDERING THE FACTS ON RECORD, IT IS A WRONG CLAI M THAT THE INDIAN ENTITY WAS INDEPENDENT TO CARRY OUT THE INSTALLATIO N AND COMMISSIONING OF THE EQUIPMENT. 54. MOREOVER, A LETTER DATED 08.03.2006 FROM BSNL, WHICH IS PART OF ANNEXURE B-14 MENTIONS THAT M/S HUAWEI IS ALSO IN T HE PROCESS OF SUPPLYING AND INSTALLATION/COMMISSIONING OF 2,10,00 0 ADDITIONAL PORTS OF ADSL2 + IN EXPANSION PHASE THROUGH M/S HTL CHENN AI. THE LETTER IS AS UNDER: 37 38 55. THIS LETTER CLEARLY CONFIRMS THE FACT THAT THE ASSESSEE IS RESPONSIBLE FOR INSTALLATION/COMMISSIONING AS THE L ETTER FROM BSNL DOES SPECIFY THE NAME OF HUAWEI TO NOT ONLY SUPPLY THE P ORTS BUT ALSO THE INSTALLATION /COMMISSIONING OF THE SAME. THIS IS AN OTHER REASON WHY CLAIM OF THE ASSESSEE THAT INSTALLATION/COMMISSIONI NG IS INDEPENDENTLY HANDLED BY THE INDIAN ENTITY CANNOT BE ACCEPTED. 56. THERE CAN BE NO DENIAL THAT THE INSTALLATION AN D OTHER MANAGED SERVICES WERE CARRIED ON BY HI UNDER SUPERVISION OF HC. IT IS A FACT THAT FTS ON ACCOUNT OF SUCH SUPERVISORY SERVICES HAS BEE N OFFERED TO TAX. SUCH BEING THE CASE, THE MOOT POINT IS THAT HI IS N OT EQUIPPED TO INSTALL EQUIPMENT SUPPLIED BY HC AND, THEREFORE, THE ACT OF INSTALLATION HAS BEEN PERFORMED ONLY WITH THE SUPERVISION OF HC RESO URCES WHICH MEANS THAT SUPPLY AND ITS INSTALLATION ARE INTEGRAL. 57. THEREFORE, THE ACTIVITY OF SUPERVISION IN CONNE CTION WITH INSTALLATION DOES CONSTITUTE INSTALLATION PE AS P ER ARTICLE 5(2)(J) OF INDIA CHINA DTAA WHICH PROVIDES THAT A BUILDING SIT E OR CONSTRUCTION, INSTALLATION OR ASSEMBLY PROJECT OR SUPERVISORY ACT IVITIES IN CONNECTION THEREWITH, WHERE SUCH SITE PROJECT OR ACTIVITIES CO NTINUE FOR A PERIOD OF MORE THAN 183 DAYS. 39 58. ANOTHER CONTENTION OF THE LD. COUNSEL FOR THE A SSESSEE IS THAT MERE PRESENCE OF AN INDEPENDENT AGENT DOES NOT RESU LT IN PE PROVIDED THE AGENT IS ACTING IN THE ORDINARY COURSE OF HIS B USINESS. IT IS THE SAY OF THE LEARNED COUNSEL THAT THE DEPENDENT AGENCY PE CAN BE SAID TO RESULT ONLY WHERE IT CAN BE ESTABLISHED THAT SUCH A GENT HAS OR HABITUALLY EXERCISED AUTHORITY TO CONCLUDE CONTRACT S IN INDIA ON ITS BEHALF. THE LD. COUNSEL FOR THE ASSESSEE VEHEMENTL Y STATED THAT HI DOES NOT CONSTITUTE DEPENDENT AGENT PE, AS ALL STRA TEGY/ POLICY AND DECISION MAKING FUNCTIONS RESIDE WITH HC OUTSIDE IN DIA AND ROLE OF HUAWEI INDIA WAS ONLY RESTRICTED TO PROVIDING LOCAL MARKET INPUTS AND INTERFACE AND UNDERTAKING MARKETING ACTIVITIES FOR HC ON PRINCIPAL TO PRINCIPAL BASIS. 59. IN ITS WRITTEN SUBMISSIONS, THE LD. COUNSEL FOR THE ASSESSEE FURTHER CONTENDED AS UNDER: ON PERUSAL OF ARTICLE (4) OF DTAA, IT IS CLEAR THA T MERE PRESENCE OF AN INDEPENDENT AGENT DOES NOT RESULT IN A PE, PROVIDED THE AGENT IS ACTING IN THE ORDINARY COURSE OF ITS BUSINESS. DEPENDENT AGENCY PE CAN BE SAID TO RESULT ONLY WHERE IT CAN BE ESTABLISHED THAT SUCH AGENT HAS OR HABITUALLY 40 EXERCISES AN AUTHORITY TO CONCLUDE CONTRACTS IN IND IA ON ITS BEHALF. AT THE OUTSET, IT IS RESPECTFULLY SUBMITTED THAT HU AWEI INDIA DOES NOT CONSTITUTE DEPENDENT AGENCY AS PE, AS ALL STRATEGY/ POLICY AND DECISION MAKING FUNCTIONS RESIDE WITH HU AWEI CHINA OUTSIDE INDIA AND ROLE OF HUAWEI INDIA WAS ONLY RES TRICTED TO PROVIDING LOCAL MARKET INPUTS AND INTERFACE AND UND ERTAKING MARKETING ACTIVITIES FOR HUAWEI CHINA ON PRINCIPAL TO PRINCIPAL BASIS. IT IS SUBMITTED THAT IN ORDER TO DETERMINE THE STAT US OF THE INDIAN ENTERPRISE (I.E., INDEPENDENT OR DEPENDENT), THE FOLLOWING TESTS NEED TO BE APPLIED HAVING REGARD TO THE PROVISIONS OF THE TREATY AND VARIOUS INTERNATIONAL COMMENTARIES ON INTERPRETATION OF THIS ARTICLE: WHETHER OR NOT THE HUAWEI INDIA IS LEGALLY AND EC ONOMICALLY INDEPENDENT OF HUAWEI CHINA?; WHETHER HUAWEI INDIA IS ACTING IN THE ORDINARY CO URSE OF BUSINESS, WHEN ACTING ON BEHALF OF HUAWEI CHINA? AN D WHETHER HUAWEI INDIAS ACTIVITIES ARE DEVOTED WHO LLY OR ALMOST WHOLLY ON BEHALF OF HUAWEI CHINA AND THE TRA NSACTIONS ARE AT ARMS LENGTH OR NOT? IN THIS REGARD, IT IS SUBMITTED THAT: - HUAWEI INDIA IS LEGALLY AND ECONOMICALLY INDEPENDEN T OF HUAWEI CHINA; AND 41 - IT IS ACTING IN THE ORDINARY COURSE OF BUSINESS IN RESPECT OF TRANSACTION WITH HUAWEI CHINA; AND - ITS ACTIVITIES ARE NOT DEVOTED WHOLLY OR ALMOST WHO LLY ON BEHALF OF HUAWEI CHINA 60. AS MENTIONED ELSEWHERE, INDIAN RESOURCES AND CH INA RESOURCES ARE WORKING JOINTLY ON A BID SUBMISSION FOR INDIAN CUSTOMERS. THE DOCUMENTS IMPOUNDED DURING THE SURVEY PROCEEDINGS A LSO ESTABLISH THIS FACT. FURTHER, THE STATEMENT OF KEY EMPLOYEES LIKE , SHRI AVIJEET CHALIYA, EXECUTIVE DIRECTOR, ANSWERING TO QUESTION NO. 5 STATED THAT: I CONFIRM THAT THE EMPLOYEES FROM HC VISITED INDIA FOR NEGOTIATIONS, PRESENTATIONS/, SIGNING OF CONTRACTS ETC, DURING THEIR VISITS DEPENDING UPON THE CIRCUMSTANCES OPERA TE FROM THEIR HOTEL, OUR OFFICE IN GURGAON OR THE PREMISES PROVIDED BY THE CLIENT. 61. FACTS ON RECORD SHOW THAT MR HORAN DENG AND MR. CHEINGWELHUA VISITED TO INDIA TO CLOSELY MONITOR THE PROGRESS IN PROJECT AT VARIOUS STAGES STARTING FROM BIDDING STAGE TO FINAL IMPLEME NTATION PHASE. FACTS ON RECORD ALSO REVEAL THAT CHINESE RESOURCES HAVE BEEN SECONDED TO HI FOR ADVANCEMENT OF BUSINESS OF HC IN INDIA. 42 62. AS MENTIONED ELSEWHERE, THE CLAIM OF THE ASSESS EE IS THAT HI RESPONSIBLE ONLY FOR PREPARATORY WORK. IF THAT BE S O, THEN WHERE IS THE NEED FOR SECONDMENT OF FOREIGN EXPATS WITH INDIAN E NTITY. 63. THE HON'BLE SUPREME COURT IN THE CASE OF FORMUL A ONE WORLD CHAMPIONSHIP LTD 80 TAXMANN 347 HAS RAISED THE QUES TION AS TO WHETHER THE FIXED PLACE WAS PUT AT THE DISPOSAL OF THE APPELLANT ENTITY. THE HON'BLE SUPREME COURT OBSERVED THAT TH IS QUESTION CAN BE ANSWERED ONLY AFTER ANALYSING VARIOUS AGREEMENTS RE LEVANT TO THE EVENT IN WHOLESOME MANNER IN ORDER TO UNDERSTAND TH E ENTIRE ARRANGEMENT BETWEEN FOWC AND ITS ASSOCIATES. THUS, THE PRINCIPLE LAID DOWN BY THE HON'BLE SUPREME COURT IS THAT ALL RELEVANT AGREEMENTS MUST BE READ IN A WHOLESOME MANNER AND NOT IN PIECE MEAL. 64. THE RELEVANT EXTRACTS OF THE DECISION READ AS U NDER: WE ARE OF THE FIRM OPINION, AND IT CANNOT BE DENIE D, THAT BUDDH INTERNATIONAL CIRCUIT IS A FIXED PLACE. FROM THIS C IRCUIT DIFFERENT RACES, INCLUDING THE GRAND PRIX IS CONDUCTED, WHICH IS UNDOUBTEDLY AN ECONOMIC/BUSINESS ACTIVITY. THE CORE QUESTION IS AS TO WHETHER THIS WAS PUT AT THE DISPOSAL OF FOWC? WHETHER THIS WAS A FIXED PLACE OF BUSINESS OF FOWC IS THE N EXT QUESTION. WE WOULD LIKE TO START OUR DISCUSSION ON A CRUCIAL PARAMETER VIZ. 43 THE MANNER IN WHICH COMMERCIAL RIGHTS, WHICH ARE HE LD BY FOWC AND ITS AFFILIATES, HAVE BEEN EXPLOITED IN THE INST ANT CASE. FOR THIS PURPOSE ENTIRE ARRANGEMENT BETWEEN FOWC AND IT S ASSOCIATES ON THE ONE HAND AND JAYPEE ON THE OTHER HAND, IS TO BE KEPT IN MIND. VARIOUS AGREEMENTS CANNOT BE LOOKE D INTO BY ISOLATING THEM FROM EACH OTHER. THEIR WHOLESOME REA DING WOULD BRING OUT THE REAL TRANSACTION BETWEEN THE PARTIES. SUCH AN APPROACH IS ESSENTIALLY REQUIRED TO FIND OUT AS TO WHO IS HAVING REAL AND DOMINANT CONTROL OVER THE EVENT, THEREBY P ROVIDING AN ANSWER TO THE QUESTION AS TO WHETHER BUDDH INTERNAT IONAL CIRCUIT WAS AT THE DISPOSAL OF FOWC AND WHETHER IT CARRIED OUT ANY BUSINESS THEREFROM OR NOT. THERE IS AN INALIENA BLE RELEVANCE OF WITNESSING THE WHOLESOME ARRANGEMENT IN ORDER TO HAVE COMPLETE PICTURE OF THE RELATIONSHIP BETWEEN FOWC A ND JAYPEE. THAT WOULD ENABLE US TO CAPTURE THE REAL ESSENCE OF FOWC'S ROLE. 65. BASED ON THE ABOVE FINDINGS OF THE HON'BLE SUPR EME COURT, WE ARE OF THE CONSIDERED VIEW THAT THE CONTROL VESTS W ITH THE ENTITY WHICH IS CAPABLE OF DELIVERING THE CRITICAL BUSINESS FUNC TIONS. THE RELEVANT EXTRACTS OF THE DECISION READ AS UNDER: SERVICE AGREEMENT IS SIGNED BETWEEN FOWC AND FOAM ON OCTOBER 28, 2011 (I.E. ON THE DATE OF THE RACE) WHE REBY FOAM ENGAGED FOWC TO PROVIDE VARIOUS SERVICES LIKE LICEN SING AND SUPERVISION OF OTHER PARTIES AT THE EVENT, TRAVEL A ND TRANSPORT 44 AND DATA SUPPORT SERVICES. THE AFORESAID ARRANGEMEN T CLEARLY DEMONSTRATES THAT THE ENTIRE EVENT IS TAKEN OVER AN D CONTROLLED BY FOWC AND ITS AFFILIATES. THERE CANNOT BE ANY RAC E WITHOUT PARTICIPATING/ COMPETING TEAMS, A CIRCUIT AND A PAD DOCK. ALL THESE ARE CONTROLLED BY FOWC AND ITS AFFILIATES. EV ENT HAS TAKEN PLACE BY CONDUCT OF RACE PHYSICALLY IN INDIA. ENTIRE INCOME IS GENERATED FROM THE CONDUCT OF THIS EVENT IN INDI A. THUS, COMMERCIAL RIGHTS ARE WITH FOWC WHICH ARE EXPLOITED WITH ACTUAL CONDUCT OF RACE IN INDIA. EVEN THE PHYSICAL CONTROL OF THE CIRCUIT WAS WITH F OWC AND ITS AFFILIATES FROM THE INCEPTION, I.E. INCLUSION OF EV ENT IN A CIRCUIT TILL THE CONCLUSION OF THE EVENT. OMNIPRESENCE OF F OWC AND ITS STAMP OVER THE EVENT IS LOUD, CLEAR AND FIRM. MR. R OHATGI IS RIGHT IN HIS SUBMISSION THAT THE UNDISPUTED FACTS WERE TH AT RACE WAS PHYSICALLY CONDUCTED IN INDIA AND FROM THIS RACE IN COME WAS GENERATED IN INDIA. THEREFORE, A COMMONSENSE AND PL AIN THINKING OF THE ENTIRE SITUATION WOULD LEAD TO THE CONCLUSIO N THAT FOWC HAD MADE THEIR EARNING IN INDIA THROUGH THE SAID TR ACK OVER WHICH THEY HAD COMPLETE CONTROL DURING THE PERIOD O F RACE. THE APPELLANTS ARE TRYING TO TRIVIALIZE THE ISSUE BY HA RPING ON THE FACT THAT DURATION OF THE EVENT WAS THREE DAYS AND, THEREFORE, CONTROL, IF AT ALL, WOULD BE FOR THAT PERIOD ONLY. HIS REPLY WAS THAT THE DURATION OF THE AGREEMENT WAS FIVE YEARS, WHICH WAS EXTENDABLE TO ANOTHER FIVE YEARS. THE QUESTION OF T HE PE HAS TO BE EXAMINED KEEPING IN MIND THAT THE AFORESAID RACE WAS TO BE 45 CONDUCTED ONLY FOR THREE DAYS IN A YEAR AND FOR THE ENTIRE PERIOD OF RACE THE CONTROL WAS WITH FOWC. 66. THE HON'BLE SUPREME COURT FURTHER HELD AS UNDER : COMING TO THE SECOND ASPECT OF THE ISSUE, NAMELY, W HETHER FOWC CARRIED ON ANY BUSINESS AND COMMERCIAL ACTIVIT Y IN INDIA OR NOT, SUBSTANTIAL PART OF THIS ASPECT HAS ALREADY BEEN DISCUSSED AND TAKEN CARE OF ABOVE. WITHOUT BEING RE PETITIVE AND PLEONASTIC OR TAUTOLOGOUS, WE MAY ONLY ADD THAT FOW C IS THE COMMERCIAL RIGHT HOLDER (CRH). THESE RIGHTS CAN BE EXPLOITED WITH THE CONDUCT OF F-1 CHAMPIONSHIP, WHICH IS ORGA NISED IN VARIOUS COUNTRIES. IT WAS DECIDED TO HAVE THIS CHAM PIONSHIP IN INDIA AS WELL. IN ORDER TO UNDERTAKE CONDUCTING OF SUCH RACES, THE FIRST REQUIREMENT IS TO HAVE A TRACK FOR THIS P URPOSE. THEN, TEAMS ARE NEEDED WHO WOULD PARTICIPATE IN THE COMPE TITION. ANOTHER REQUIREMENT IS TO HAVE THE PUBLIC/VIEWERS W HO WOULD BE INTERESTED IN WITNESSING SUCH RACES FROM THE PLACES BUILT AROUND THE TRACK. AGAIN, FOR AUGMENTING THE EARNINGS IN TH ESE EVENTS, THERE WOULD BE ADVERTISEMENTS, MEDIA RIGHTS, ETC. A S WELL. IT IS FOWC AND ITS AFFILIATES WHICH HAVE BEEN RESPONSIBLE FOR ALL THE AFORESAID ACTIVITIES. THE CONCORDE AGREEMENT IS SIG NED BETWEEN FIA, FOA AND FOWC WHEREBY NOT ONLY FOWC BECAME COMMERCIAL RIGHTS HOLDER FOR 100 YEARS, THIS AGREEM ENT FURTHER ENABLED PARTICIPATION OF THE TEAMS WHO AGREED FOR S UCH PARTICIPATION IN THE FIA CHAMPIONSHIP EACH YEAR FOR EVERY EVENT 46 AND UNDERTOOK TO PARTICIPATE IN EACH EVENT WITH TWO CARS. FIA UNDERTOOK TO ENSURE THAT EVENTS WERE HELD AND FOWC, AS CRH, UNDERTOOK TO ENTER INTO CONTRACTS WITH EVENT PROMOT ERS AND HOST SUCH EVENTS. ALL POSSIBLE COMMERCIAL RIGHTS, I NCLUDING ADVERTISEMENT, MEDIA RIGHTS, ETC. AND EVEN RIGHT TO SELL PADDOCK SEATS, WERE ASSUMED BY FOWC AND ITS ASSOCIATES. THU S, AS A PART OF ITS BUSINESS, FOWC (AS WELL AS ITS AFFILIAT ES) UNDERTOOK THE AFORESAID COMMERCIAL ACTIVITIES IN INDIA. 67. IN LIGHT OF THE AFORESAID EXTRACTS FROM THE HON 'BLE SUPREME COURT [SUPRA] COMING TO THE FACTS OF THE CASE IN HAND, TH ERE IS NO DISPUTE THAT TECHNOLOGY OWNERSHIP IS WITH THE APPELLANT. TH E INDIAN ENTITY HAS NO WHEREWITHAL TO UNDERTAKE TECHNICAL WORK LIKE INS TALLATION/ COMMISSIONING OF TELECOM NETWORK EQUIPMENT WITHOUT THE AID OF THE ASSESSEE. 68. AS HELD BY THE HON'BLE SUPREME COURT, THE CONTR OL AND DISPOSAL GO HAND IN HAND. THUS, THE DISPOSAL OF FIXED PLACE IS DETERMINED BY THE DEGREE OF CONTROL EXERCISED BY THE FOREIGN ENTI TY. FREQUENT VISITS OF THE EXPATS FROM HC EXERT THE CONTROL TO CARRY OU T VARIOUS BUSINESS ACTIVITIES OF THE APPELLANT. 47 69. IN ITS WRITTEN SUBMISSIONS, THE LD. COUNSEL FOR THE ASSESSEE FURTHER CONTENDED AS FOLLOWS: THE FOLLOWING PRINCIPLES HAVE BEEN ENUNCIATED IN V ARIOUS COMMENTARIES IN RESPECT OF ECONOMIC INDEPENDENCE FO R AN AGENT: - THE AGENTS BUSINESS CAN STAND ON ITS OWN AND DOES NOT LOOK TO THE PRINCIPAL FOR ITS ECONOMIC VIABILITY; - THE AGENT BEARS RISK OF LOSS FROM ITS OWN ACTIVITIE S; AND. - THE AGENT IS NOT DEPENDENT WHOLLY AND EXCLUSIVELY O N ONE PRINCIPAL. THE NUMBER OF PRINCIPALS REPRESENTED BY AN AGENT IS ALSO DETERMINATIVE OF ECONOMIC INDEPENDENCE OF T HE AGENT. 70. AS MENTIONED ELSEWHERE, THE INDIAN RESOURCES WE RE INVOLVED IN DEAL NEGOTIATIONS ON BEHALF OF THE ASSESSEE. REFER ENCE IS MADE TO THE EMAIL OFFER DATED 30.01.2009 OF SHRI ARUNDEEP KAKKA R. FURTHER, JOINT BIDDING SHOWS THE BUSINESS ACTIVITY INCLUDING SIGNI NG OF BID DOCUMENTS FROM THE OFFICE PREMISES OF HI AND THERE IS NO DENI AL THAT HI IS PARTICIPATING IN NEGOTIATIONS OF DEAL WITH INDIAN C LIENTS ON BEHALF OF HC. 48 71. FACTS ON RECORD CLEARLY ESTABLISH THAT HI IS EC ONOMICALLY DEPENDENT ON THE ASSESSEE AS IT HAS HANDLED THE WOR K OF INSTALLATION OF TELECOM EQUIPMENT SUPPLIED BY HC ON TECHNICAL SUPPO RT PROVIDED BY HC. FURTHER, THE BUSINESS OF HI IS WHOLLY AND EXCLU SIVELY FOR EQUIPMENT SUPPLIED BY HC. IN FACT, HI CAME INTO EXISTENCE WI TH AN INTENT TO AID THE BUSINESS OF HC IN INDIA. FACTS ON RECORD CLEAR LY SHOW THAT HI IS NOT CAPABLE OF SUPPLYING THE EQUIPMENT WHAT IT IS BIDDI NG FOR. PRODUCTS TO BE SUPPLIED MUST CATER TO THE SPECIFIC REQUIREMENT OF CUSTOMERS BUSINESS OF HI IS TOTALLY DEPENDENT ON HC. IN FACT , THE BUSINESS OF HC IN INDIA IS ALSO TOTALLY DEPENDENT ON HI. EVEN WHE RE SUPPLIES HAVE BEEN MADE THROUGH HTL OR STERLITE, THE INSTALLATION S/COMMISSION HAVE BEEN DONE BY HI. 72. MOREOVER, HI IS NOT CAPABLE OF SUPPLYING THE EQ UIPMENT AND SINCE THE TECHNOLOGY KNOW HOW AND CAPABILITY IS OWNED BY HC, HI COULD NOT HAVE BID ON ITS OWN, WHICH MEANS THAT HI IS ECONOMI CALLY DEPENDENT ON HC, THE APPELLANT. 49 73. CLAIM OF THE ASSESSEE THAT HC EMPLOYEES WERE RE QUIRED TO JOIN THE DISCUSSION BETWEEN HI AND ITS CUSTOMERS FOR GAT HERING PRELIMINARY AND AUXILIARY INFORMATION FOR THE PURPOSE OF PROVID ING COST ESTIMATE TO HI FOR SUPPLY OF EQUIPMENT ON PRINCIPAL TO PRINCIPA L BASIS CAN BE LOOKED FROM THE DECISION OF THE HON'BLE DELHI HIGH COURT I N THE CASE OF GE ENERGY PARTS INC. ITA NO. 621/2017 ORDER DATED 21.1 2.2018. 74. THE RELEVANT FINDINGS READ AS UNDER: AS NOTICED BY THE TRIBUNAL, ENTERING INTO CONTRACT WITH STAKEHOLDERS (MAINLY SERVICE PROVIDERS IN THESE SEG MENTS) INVOLVED A COMPLEX MATRIX OF TECHNICAL SPECIFICATIO NS, COMMERCIAL TERMS, FINANCIAL TERMS AND OTHER POLICIE S OF GE. TO ADDRESS THESE, GE HAD STATIONED SEVERAL EMPLOYEES A ND OFFICIALS: HIGH RANKING, AND IN MIDDLE LEVEL. AT ONE END OF TH E SPECTRUM OF THEIR ACTIVITIES WAS INFORMATION GATHERING AND ANAL YSIS- WHICH HELPED DEVELOP BUSINESS AND COMMERCIAL OPPORTUNITIE S. AT THE OTHER END WAS INTENSIVE NEGOTIATIONS WITH RESPECT T O CHANGE OF TECHNICAL PARAMETERS OF HTTP://ITATONLINE.ORG ITA 6 21/2017 & CONNECTED MATTERS PAGE 64 OF 85 SPECIFIC GOODS AND PRODUCTS, WHICH HAD TO BE MADE TO SUIT THE CUSTOMERS. STANDAR D OFF THE SHELF GOODS OR EVEN STANDARD TERMS OF CONTRACT, WERE INAPPLICABLE. IN THIS SETTING, A POTENTIAL SELLER O F EQUIPMENT LIKE GE, HAD TO CREATE INTRICATE AND NUANCED PLATFORMS T O ADDRESS THE NEEDS OF CUSTOMERS IDENTIFIED BY IT, IN THE FIR ST INSTANCE. 50 AFTER THE FIRST STEP, OF GATHERING INFORMATION, GE HAD TO COMMENCE THE PROCESS OF MARKETING ITS PRODUCT, UNDE RSTANDING THE NEEDS OF INDIAN CLIENTS, GIVING THEM OPTIONS AB OUT AVAILABLE TECHNOLOGY, ADDRESS QUERIES AND CONCERNS WITH RESPE CT TO TECHNICAL VIABILITY AND COST EFFICACY OF THE PRODUC TS CONCERNED AND WHEREVER NECESSARY INDICATE HOW AND TO WHAT EX TENT IT COULD ADAPT ITS KNOWN PRODUCTS, OR DESIGN PARAMETER S, TO SUIT INDIAN CONDITIONS AS WELL AS INDIAN LOCAL REGULATIO NS. THIS PROCESS WAS TIME CONSUMING AND INVOLVED A SERIES OF CONSULT ATIONS BETWEEN THE CLIENT, ITS TECHNICAL AND FINANCIAL EXP ERTS AND ALSO ITS HEADQUARTERS. OFTENTIMES THE HEADQUARTERS TOO H AD TO BE CONSULTED ON TECHNICAL MATTERS. AFTER THIS CONSULTA TIVE PROCESS ENDED AND THE TERMS OF SUPPLY WERE AGREED TO, THE F INAL AFFIRMATIVE TO THE OFFER, TO BE MADE BY THE INDIAN CUSTOMER, WOULD BE INDICATED BY GE S HEADQUARTERS. 75. AS IN THE PRESENT CASE IT IS NOT A SUPPLY OF ST ANDARD PRODUCT BUT PRODUCT BASED ON SPECIFIC REQUIREMENTS OF THE CUSTO MER. 76. CONSIDERING THE FACTS IN TOTALITY, IN LIGHT OF THE JUDICIAL DECISIONS DISCUSSED HEREINABOVE, AND CONSIDERING FROM ALL POS SIBLE ANGLES, WE HAVE NO HESITATION TO HOLD THAT HI NOT ONLY CONSTIT UTES DEPENDENT AGENT PE OF HC BUT ALSO SERVICE PE AND FIXED PLACE PE WITHIN ARTICLE 5 OF INDO CHINA DTAA. THE COUNSEL HAD VEHEMENTLY ARG UED THAT 51 STATEMENTS RECORDED AT THE TIME OF SURVEY DO NOT HA VE ANY EVIDENTIARY VALUE IN LIGHT OF THE DECISION OF HON'BLE MADRAS HI GH COURT IN THE CASE OF S. KADER KHAN 301 ITR 157 WHICH HAS BEEN CONFIRM ED BY THE HON'BLE SUPREME COURT IN 210 TAXMANN.CPM 248. IN OUR CONSID ERED OPINION, THE SAID DECISION IS TOTALLY ON DIFFERENT SET OF FA CTS. 77. WE HAVE TO STATE THAT IN THE DECISION RELIED UP ON BY THE LD. COUNSEL FOR THE ASSESSEE IN THAT CASE, THE HON'BLE HIGH COURT ALSO FOLLOWED THE CIRCULAR OF THE CBDT FOR ARRIVING AT T HE CONCLUSION THAT MATERIALS COLLECTED AND STATEMENTS OBTAINED U/S 133 A WOULD NOT AUTOMATICALLY BIND UPON THE ASSESSEE. HOWEVER, IN THE CASE IN HAND, STATEMENTS OF KEY EMPLOYEES RELIED UPON BY THE REVE NUE ARE WELL SUPPORTED BY DOCUMENTARY EVIDENCES IN THE FORM OF E MAILS WHICH PROMPTED THE REVENUE TO TAKE A STAND THAT THE OFFIC E OF HI IN INDIA WAS ENGAGED IN CARRYING OUT THE BUSINESS ACTIVITIES OF HC. MOREOVER, IN THE CASE IN HAND, INCOME HAS NOT BEEN DETERMINED ON THE BASIS OF ANY BANAL DECLARATION BY ANY WITNESS BUT AFTER ANALYSIN G IN DETAIL THE ACTIVITIES OF THE PE IN INDIA SINCE ITS INCEPTION 52 78. AT THIS JUNCTURE, IT WOULD BE PERTINENT TO MENT ION THAT THE LD. COUNSEL FOR THE ASSESSEE HAS REPEATEDLY REFERRED TO VARIOUS CLAUSES OF CONTRACTS/AGREEMENTS ENTERED INTO WITH INDIAN BUYER S FOR PURCHASE/ SALE OF TELECOMMUNICATION NETWORK EQUIPMENT. THE C ONTRACTS ARE CONTRACTUAL OBLIGATIONS BETWEEN THE PARTIES, INTER SE, BUT WHO COULD BE IN A BETTER POSITION THAN THE KEY EMPLOYEES OF HI T O TELL HOW THE TRANSACTIONS WERE ACTUALLY UNDERTAKEN, WHICH IS THE GROUND REALITY. 79. IN LIGHT OF THE ABOVE, AND HAVING HELD THAT THE APPELLANT HAD PE IN INDIA, THE ONLY ISSUE WHICH NEEDS TO BE ADDRESSE D NOW IS THE ATTRIBUTION. 80. AT THE VERY BEGINNING, WE HAD CLEARLY MENTIONED THAT HE IMPUGNED ISSUES WERE EXAMINED AND CONSIDERED BY THE TRIBUNAL IN ASSESSEES OWN CASE IN ITA NOS. 5253 TO 5256/DEL/20 11 FOR A.YS 2005- 06 TO 2008-09. HOWEVER, AT THE BEHEST OF THE LD. C OUNSEL FOR THE ASSESSEE, WE HAVE ONCE AGAIN EXTENSIVELY EXAMINED T HE FACTS OF THE CASE AFRESH. 53 81. WE HAVE GIVEN DUE CONSIDERATION TO ALL THE WRIT TEN SUBMISSIONS FILED BY THE LD. COUNSEL FOR THE ASSESSEE AND HAVE ALSO CONSIDERED THE REBUTTAL TO THE WRITTEN SUBMISSIONS OF THE LD. DR. OUR FINDINGS ARE TOTALLY ON THE PECULIAR FACTS OF THE CASE IN HAND A S DISCUSSED HEREINABOVE. 82. IN SO FAR AS THE ATTRIBUTION IS CONCERNED, THE FINDINGS OF THE TRIBUNAL GIVEN IN A.Y 2005-06 TO 2008-09 [SUPRA] AR E TAKEN AS IT IS. THE RELEVANT FINDINGS OF THE TRIBUNAL READ AS UNDER: 15. WE HAVE CAREFULLY CONSIDERED THE SUBMISSIONS O F BOTH THE SIDES AND PERUSED RELEVANT MATERIAL PLACED BEFORE U S. AFTER CONSIDERING THE FACTS OF THE CASE AND THE ARGUMENTS OF BOTH THE SIDES, WE ARE OF THE OPINION THAT THE ISSUE IS SQUA RELY COVERED IN FAVOUR OF THE ASSESSEE BY THE DECISION OF HON'BLE J URISDICTIONAL HIGH COURT. THAT IN THE CASE OF ERICSSON A.B., NEW DELHI (SUPRA), HON'BLE JURISDICTIONAL HIGH COURT HELD AS UNDER:- ONCE ONE PROCEEDS ON THE BASIS OF AFORESAID FACTUA L FINDINGS, IT IS DIFFICULT TO HOLD THAT PAYMENT MADE TO THE ASSESSEE WAS IN THE NATURE OF ROYALTY EITHER UNDER THE ACT OR UNDER THE DTAA. IT IS APPARENT THAT WHAT WAS SOLD BY THE ASSESSEE TO THE INDIAN CUSTOMERS WAS A GSM WHICH CONSISTED BOTH OF THE HAR DWARE AS WELL AS THE SOFTWARE, THEREFORE, THE TRIBUNAL IS RIGHT I N HOLDING THAT IT 54 WAS NOT PERMISSIBLE FOR THE REVENUE TO ASSESS THE S AME UNDER TWO DIFFERENT ARTICLES. THE SOFTWARE THAT WAS LOADED ON THE HARDWARE DID NOT HAVE ANY INDEPENDENT EXISTENCE. THE SOFTWAR E SUPPLY IS AN INTEGRAL PART OF THE GSM MOBILE TELEPHONE SYSTEM AN D IS USED BY THE CELLULAR OPERATOR FOR PROVIDING THE CELLULAR SE RVICES TO ITS CUSTOMERS. THERE COULD NOT BE ANY INDEPENDENT USE O F SUCH SOFTWARE. THE SOFTWARE IS EMBODIED IN THE SYSTEM AN D THE REVENUE ACCEPTS THAT IT COULD NOT BE USED INDEPENDENTLY. TH IS SOFTWARE MERELY FACILITATES THE FUNCTIONING OF THE EQUIPMENT AND IS AN INTEGRAL PART THEREOF. A FORTIORARI WHEN THE ASSESS EE SUPPLIES THE SOFTWARE WHICH IS INCORPORATED ON A CD, IT HAS SUPP LIED TANGIBLE PROPERTY AND THE PAYMENT MADE BY THE CELLULAR OPERA TOR FOR ACQUIRING SUCH PROPERTY CANNOT BE REGARDED AS A PAY MENT BY WAY OF ROYALTY. IT IS ALSO TO BE BORNE IN MIND THAT THE SU PPLY CONTRACT CANNOT BE SEPARATED INTO TWO VIZ., HARDWARE AND SOF TWARE. NO DOUBT, IN AN ANNEXURE TO THE SUPPLY CONTRACT THE LU MP SUM PRICE IS BIFURCATED IN TWO COMPONENTS, VIZ., THE CONSIDERATI ON FOR THE SUPPLY OF THE EQUIPMENT AND FOR THE SUPPLY OF THE SOFTWARE . HOWEVER, IT WAS ARGUED BY THE ASSESSEE THAT THIS SEPARATE SPECI FICATION OF THE HARDWARE/SOFTWARE SUPPLY WAS NECESSARY BECAUSE OF T HE DIFFERENTIAL CUSTOMS DUTY PAYABLE. BE AS IT MAY, IN ORDER TO QUALIFY AS ROYALTY PAYMENT, WITHIN THE MEANING OF SECTION 9 (1)(VI) AND PARTICULARLY CLAUSE (V) OF EXPLANATION - II THERETO , IT IS NECESSARY TO ESTABLISH THAT THERE IS TRANSFER OF ALL OR ANY R IGHTS (INCLUDING THE GRANTING OF ANY LICENSE) IN RESPECT OF COPY RIG HT OF A LITERARY, ARTISTIC OR SCIENTIFIC WORK. SECTION 2(O ) OF THE C OPYRIGHT ACT MAKES IT CLEAR THAT A COMPUTER PROGRAMME IS TO BE R EGARDED AS A OTHERS LITERARY WORK. THUS, IN ORDER TO 55 TREAT THE CONSIDERATION PAID BY THE CELLULAR OPERAT OR AS ROYALTY, IT IS TO BE ESTABLISHED THAT THE CELLULAR OPERATOR, BY MAKING SUCH PAYMENT, OBTAINS ALL OR ANY OF THE COPYRIGHT RIGHTS OF SUCH LITERARY WORK. IN THE PRESENCE CASE, THIS HAS NOT BEEN ESTAB LISHED. IT IS NOT EVEN THE CASE OF THE REVENUE THAT ANY RIGHT CONTEMP LATED UNDER SECTION 14 OF THE COPYRIGHT ACT,1957 STOOD VESTED I N THIS CELLULAR OPERATOR AS A CONSEQUENCE OF THE SUPPLY CONTRACT. D ISTINCTION HAS TO BE MADE BETWEEN THE ACQUISITION OF A 'COPYRIGHT RIGHT' AND A 'COPYRIGHTED ARTICLE'. 16. SIMILAR VIEW IS EXPRESSED BY HON'BLE JURISDICTI ONAL HIGH COURT IN THE CASE OF INFRASOFT LTD. (SUPRA), WHEREIN THEI R LORDSHIPS HELD AS UNDER:- 86. THE LICENSING AGREEMENT SHOWS THAT THE LICENSE IS NON- EXCLUSIVE, NON-TRANSFERABLE AND THE SOFTWARE HAS TO BE USES IN ACCORDANCE WITH THE AGREEMENT. ONLY ONE COPY OF THE SOFTWARE IS BEING SUPPLIED FOR EACH SITE. THE LICENSEE IS PERMI TTED TO MAKE ONLY ONE COPY OF THE SOFTWARE AND ASSOCIATED SUPPORT INF ORMATION AND THAT ALSO FOR BACKUP PURPOSES. IT IS ALSO STIPULATE D THAT THE COPY SO MADE SHALL INCLUDE INFRASOFT S COPYRIGHT AND OTHER PROPRIETARY NOTICES. ALL COPIES OF THE SOFTWARE ARE THE EXCLUSI VE PROPERTY OF INFRASOFT. THE SOFTWARE INCLUDES A LICENCE AUTHORIS ATION DEVICE, WHICH RESTRICTS THE USE OF THE SOFTWARE. THE SOFTWA RE IS TO BE USED ONLY FOR LICENSEE S OWN BUSINESS AS DEFINED WITHIN THE INFRASOFT LICENCE SCHEDULE. WITHOUT THE CONSENT OF THE ASSESSEE 56 THE SOFTWARE CANNOT BE LOANED, RENTED, SOLD, SUBLIC ENSED OR TRANSFERRED TO ANY THIRD PARTY OR USED BY ANY PAREN T, SUBSIDIARY OR AFFILIATED ENTITY OF LICENSEE OR USED FOR THE OPERA TION OF A SERVICE BUREAU OR FOR DATA PROCESSING. THE LICENSEE IS FURT HER RESTRICTED FROM MAKING COPIES, DECOMPILE, DISASSEMBLE OR REVER SE ENGINEER THE SOFTWARE WITHOUT INFRASOFT S WRITTEN CONSENT. THE SOFTWARE CONTAINS A MECHANISM WHICH INFRASOFT MAY ACTIVATE T O DENY THE LICENSEE USE OF THE SOFTWARE IN THE EVENT THAT THE LICENSEE IS IN BREACH OF PAYMENT TERMS OR ANY OTHER PROVISIONS OF THIS AGREEMENT. ALL COPYRIGHTS AND INTELLECTUAL PROPERTY RIGHTS IN AND TO THE SOFTWARE, AND COPIES MADE BY LICENSEE, ARE OWNE D BY OR DULY LICENSED TO INFRASOFT. 87. IN ORDER TO QUALIFY AS ROYALTY PAYMENT, IT IS N ECESSARY TO ESTABLISH THAT THERE IS TRANSFER OF ALL OR ANY RIGH TS (INCLUDING THE GRANTING OF ANY LICENCE) IN RESPECT OF COPYRIGHT OF A LITERARY, ARTISTIC OR SCIENTIFIC WORK. IN ORDER TO TREAT THE CONSIDERATION PAID BY THE LICENSEE AS ROYALTY, IT IS TO BE ESTABLISHED THAT THE LICENSEE, BY MAKING SUCH PAYMENT, OBTAINS ALL OR ANY OF THE C OPYRIGHT RIGHTS OF SUCH LITERARY WORK. DISTINCTION HAS TO BE MADE B ETWEEN THE ACQUISITION OF A 'COPYRIGHT RIGHT' AND A COPYRIGHTE D ARTICLE'. COPYRIGHT IS DISTINCT FROM THE MATERIAL OBJECT, COP YRIGHTED. COPYRIGHT IS AN INTANGIBLE INCORPOREAL RIGHT IN THE NATURE OF A PRIVILEGE, QUITE INDEPENDENT OF ANY MATERIAL SUBSTA NCE, SUCH AS A MANUSCRIPT. JUST BECAUSE ONE HAS THE COPYRIGHTED AR TICLE, IT DOES NOT FOLLOW THAT ONE HAS ALSO THE COPYRIGHT IN IT. I T DOES NOT AMOUNT TO TRANSFER OF ALL OR ANY RIGHT INCLUDING LICENCE I N RESPECT OF 57 COPYRIGHT. COPYRIGHT OR EVEN RIGHT TO USE COPYRIGHT IS DISTINGUISHABLE FROM SALE CONSIDERATION PAID FOR C OPYRIGHTED ARTICLE. THIS SALE CONSIDERATION IS FOR PURCHASE OF GOODS AND IS NOT ROYALTY. 88. THE LICENSE GRANTED BY THE ASSESSEE IS LIMITED TO THOSE NECESSARY TO ENABLE THE LICENSEE TO OPERATE THE PRO GRAM. THE RIGHTS TRANSFERRED ARE SPECIFIC TO THE NATURE OF CO MPUTER PROGRAMS. COPYING THE PROGRAM ONTO THE COMPUTER'S H ARD DRIVE OR RANDOM ACCESS MEMORY OR MAKING AN ARCHIVAL COPY IS AN ESSENTIAL STEP IN UTILIZING THE PROGRAM. THEREFORE, RIGHTS IN RELATION TO THESE ACTS OF COPYING, WHERE THEY DO NO MORE THAN ENABLE THE EFFECTIVE OPERATION OF THE PROGRAM BY THE USER, SHOULD BE DIS REGARDED IN ANALYZING THE CHARACTER OF THE TRANSACTION FOR TAX PURPOSES. PAYMENTS IN THESE TYPES OF TRANSACTIONS WOULD BE DE ALT WITH AS BUSINESS INCOME IN ACCORDANCE WITH ARTICLE 7. 89. T HERE IS A CLEAR DISTINCTION BETWEEN ROYALTY PAID ON TRANSFER OF COP YRIGHT RIGHTS AND CONSIDERATION FOR TRANSFER OF COPYRIGHTED ARTIC LES. RIGHT TO USE A COPYRIGHTED ARTICLE OR PRODUCT WITH THE OWNER RET AINING HIS COPYRIGHT, IS NOT THE SAME THING AS TRANSFERRING OR ASSIGNING RIGHTS IN RELATION TO THE COPYRIGHT. THE ENJOYMENT OF SOME OR ALL THE RIGHTS WHICH THE COPYRIGHT OWNER HAS, IS NECESSARY TO INVOKE THE ROYALTY DEFINITION. VIEWED FROM THIS ANGLE, A NON-E XCLUSIVE AND NON- TRANSFERABLE LICENCE ENABLING THE USE OF A COPYRIGH TED PRODUCT CANNOT BE CONSTRUED AS AN AUTHORITY TO ENJOY ANY OR ALL OF THE ENUMERATED RIGHTS INGRAINED IN ARTICLE 12 OF DTAA. WHERE THE PURPOSE OF THE LICENCE OR THE TRANSACTION IS ONLY T O RESTRICT USE OF THE COPYRIGHTED PRODUCT FOR INTERNAL BUSINESS PURPO SE, IT WOULD NOT BE LEGALLY CORRECT TO STATE THAT THE COPYRIGHT ITSE LF OR RIGHT TO USE COPYRIGHT HAS BEEN TRANSFERRED TO ANY EXTENT. THE P ARTING OF 58 INTELLECTUAL PROPERTY RIGHTS INHERENT IN AND ATTACH ED TO THE SOFTWARE PRODUCT IN FAVOUR OF THE LICENSEE/CUSTOMER IS WHAT IS CONTEMPLATED BY THE TREATY. MERELY AUTHORIZING OR E NABLING A CUSTOMER TO HAVE THE BENEFIT OF DATA OR INSTRUCTION S CONTAINED THEREIN WITHOUT ANY FURTHER RIGHT TO DEAL WITH THEM INDEPENDENTLY DOES NOT, AMOUNT TO TRANSFER OF RIGHTS IN RELATION TO COPYRIGHT OR CONFERMENT OF THE RIGHT OF USING THE COPYRIGHT. THE TRANSFER OF RIGHTS IN OR OVER COPYRIGHT OR THE CONFERMENT OF TH E RIGHT OF USE OF COPYRIGHT IMPLIES THAT THE TRANSFEREE/LICENSEE S HOULD ACQUIRE RIGHTS EITHER IN ENTIRETY OR PARTIALLY COEXTENSIVE WITH THE OWNER/ TRANSFEROR WHO DIVESTS HIMSELF OF THE RIGHTS HE POS SESSES PRO TANTO. 17. THAT THE FACTS OF THE ASSESSEES CASE ARE IDENT ICAL WITH THE FACTS BEFORE THE HON'BLE JURISDICTIONAL HIGH COURT. THOUGH THE LEARNED COUNSEL FOR THE ASSESSEE HAS GIVEN ALL THE AGREEMENTS BETWEEN THE ASSESSEE AND BUYERS, HOWEVER, AT THE TI ME OF HEARING BEFORE US, ONLY ONE OR TWO AGREEMENTS WERE REFERRED AND IT WAS ADMITTED BY BOTH THE PARTIES THAT THE CLAUSES OF AL L THE AGREEMENTS ARE MORE OR LESS SIMILAR. WE, THEREFORE, REFER HEREIN BELOW ONLY ONE AGREEMENT BETWEEN THE ASSESSEE AND S TERLITE OPTICAL TECHNOLOGIES LTD. 18. THE AGREEMENT IS DATED 9TH APRIL, 2007. AS PER PAGE 4 PARAGRAPH-C OF THE AGREEMENT, THE SUPPLIER, I.E., T HE ASSESSEE, UNDERTAKES TO SUPPLY EQUIPMENTS AS DEFINED IN THE A GREEMENT. THE 59 DEFINITION OF THE AGREEMENT IS AT PAGE 5 PARAGRAPH (E) WHICH READS AS UNDER:- (E) EQUIPMENT SHALL MEAN THE ALL HARD WARE, SOFTWARE, MATERIAL AND COMPONENTS TO BE SUPPLIED BY THE SUPPL IER AS DESCRIBED IN ANNEXURE 1 (EQUIPMENT LIST). 19 THUS, THE EQUIPMENT INCLUDES HARDWARE AS WELL AS SOFTWARE BOTH. SOFTWARE IS DEFINED AT PAGE 6 PARAGRAPH (O) OF THE AGREEMENT AND IT READS AS UNDER:- (O) SOFTWARE SHALL MEAN THE SET OF PROGRAM EMBEDDED IN THE EQUIPMENT NECESSARY FOR THE CONTROL , OPERATION AND PERFORMANCE OF THE EQUIPMENT IN ACCORDANCE WITH THE REQUIREMENTS OF THE SPECIFICATION AND LICENSED OR S UBLICENSED BY SUPPLIER TO BUYER UNDER THIS CONTRACT. 20. FROM THE ABOVE DEFINITION, IT IS EVIDENT THAT T HE SOFTWARE IS THE SET OF PROGRAM EMBEDDED IN THE EQUIPMENT NECESS ARY FOR CONTROL, OPERATION AND PERFORMANCE OF THE EQUIPMENT . AS PER PAGE 12 PARAGRAPH 5.1, THE TOTAL CONTRACT PRICE OF SUPPL Y OF EQUIPMENTS FOR PHASE I BY THE SUPPLIER IS USD 15,749,438.97. T HUS, THERE IS A CONSOLIDATED PRICE FOR THE SUPPLY OF EQUIPMENT WHIC H CONSISTS OF HARDWARE AND SOFTWARE BOTH. PAGE 14 OF THE AGREEMEN T PARAGRAPH 5.8.4.3 AND 5.8.4.4 PROVIDE FOR THE PAYMENT SCHEDUL E WHICH READS AS UNDER:- 5.8.4.3 SECOND PAYMENT OF 20% OF THE COST OF EQUIP MENT (HARDWARE) AND 50% OF THE COST OF EQUIPMENT (SOFTWA RE) ON 60 TH DAY FROM PRESENTATION OF FOLLOWING DOCUMENTS AFTER COMPLETION OF 60 VALIDATION BY MTNL TESTING TEAM. FOLLOWING DOCUMENT WILL BE ATTACHED FOR NEGOTIATION OF THIS PAYMENT. (I) VALID ATION TEST CERTIFICATE ISSUED BY MTNL. IN CASE OF DEDUCTION OF LIQUIDATED DAMAGES BY MTNL, THE BUYER WILL SUBMIT THE DOCUMENT ARY PROOF ISSUED BY MTNL OF SUCH DEDUCTION TO BANK AND THE SA ME WILL BE ADJUSTED FROM THE SECOND PAYMENT. SECOND PAYMENT SH ALL BE MADE ONLY AFTER FIRST PAYMENT IS RELEASED TO SUPPLIER. 5.8.4.4 THIRD PAYMENT OF 10% OF COST OF EQUIPMENT ( HARDWARE) AND 30% OF EQUIPMENT (SOFTWARE) SHALL BE PAID ON 60 TH DAY FROM SUBMISSION OF FOLLOWING DOCUMENTS - I) ACCEPTANCE T EST CERTIFICATE ISSUED BY MTNL FOR ENTIRE CITY OF DELHI/MUMBAI. II) CERTIFICATE ISSUED BY MTNL FOR COMPLIANCE OF 30% VALUE ADDITION AS PER THE TENDER CONDITION. IN CASE OF DEDUCTION OF LIQUIDATE D DAMAGES BY MTNL ON INSTALLATION AND COMMISSIONING, THE BUYER W ILL SUBMIT SUCH DOCUMENTARY PROOF ISSUED BY MTNL OF SUCH DEDUCTION TO BANK AND THE SAME WILL BE ADJUSTED FROM THE THIRD PAYMENT. A NY LD ON ACCOUNT OF BUYER THAT IS DEDUCTED FROM THE SUPPLIER S SECOND PAYMENT WILL BE SETTLED DULY PAID TO SUPPLIER IN TH E THIRD PAYMENT. 21. LEARNED DR, WITH REFERENCE TO ABOVE PARAGRAPHS AS WELL AS THE SCHEDULE TO THE AGREEMENT, POINTED OUT THAT THERE I S A SEPARATE PRICE AS WELL AS SEPARATE PAYMENT SCHEDULE IN RESPE CT OF COST OF EQUIPMENT, I.E., HARDWARE AND COST OF EQUIPMENT I.E ., SOFTWARE. PAGE 39 PARAGRAPH 25.8 OF THE AGREEMENT READS AS UNDER:- 61 25.8 IN RESPECT TO THE EQUIPMENT CONTAINING SOFTWA RE ACQUIRED UNDER THIS CONTRACT, THE BUYER IS HEREBY GRANTED A NON-EXCLUSIVE, NON-TRANSFERABLE AND NON-SUB-LICENSABLE LICENSE TO USE THE SOFTWARE. BUYER IS GRANTED NO TITLE OR OWNERSHIP RI GHTS OR INTERESTS IN THE SOFTWARE, WHERE SUCH TITLE, RIGHTS AND/OR INTEREST IN THE SOFTWARE SHALL REMAIN WITH THE SUPPLIER OR S UPPLIERS SUPPLIER AT ALL TIMES. 22. FROM THE ABOVE, IT IS EVIDENT THAT THE EQUIPMEN T, I.E., THE HARDWARE SUPPLIED BY THE ASSESSEE CONTAINED THE SOF TWARE AND THE SOFTWARE WAS NOT SEPARATELY SUPPLIED. MOREOVER, THE BUYER IS GRANTED A NON-EXCLUSIVE, NON-TRANSFERABLE AND NON-S UB-LICENSABLE LICENSE TO USE THE SOFTWARE. IT IS ALSO CLARIFIED T HAT BUYER IS GRANTED NO TITLE OR OWNERSHIP RIGHTS OR INTEREST IN THE SOFTWARE. AFTER READING THE AGREEMENT BETWEEN THE ASSESSEE AN D THE BUYERS, ESPECIALLY THE CLAUSES WHICH ARE REFERRED A BOVE, WE ARE OF THE OPINION THAT THE FACTS IN THE CASE OF THE ASSES SEE AND THE FACTS IN THE CASES BEFORE THE HON'BLE JURISDICTIONA L HIGH COURT ARE IDENTICAL. THE ONLY GROUND STRESSED UPON BY THE LEA RNED DR WAS TO POINT OUT THE BIFURCATION OF THE CONTRACT PRICE BET WEEN THE HARDWARE AND SOFTWARE. WE FIND THAT THE FACTS WERE IDENTICAL BEFORE THE HON'BLE JURISDICTIONAL HIGH COURT IN THE CASE OF ERICSSON A.B., NEW DELHI (SUPRA). IN VIEW OF THE AB OVE, WE, RESPECTFULLY FOLLOWING THE DECISION OF HON'BLE JURI SDICTIONAL HIGH COURT IN THE CASE OF ERICSSON A.B., NEW DELHI (SUPR A) AND INFRASOFT LTD. (SUPRA), HOLD THAT THERE WAS ONLY ONE CONTRACT FOR SUPPLY OF EQUIPMENT WHICH INCLUDED HARDWARE AND SOFTWARE BOTH AND, 62 THEREFORE, THE INCOME FROM SUPPLY OF THE EQUIPMENT IS TO BE ASSESSED AS BUSINESS INCOME ARISING FROM THE ASSESS EES BUSINESS CONNECTION/PE IN INDIA. WE, THEREFORE, DIRECT THE A SSESSING OFFICER TO REWORK OUT THE ASSESSEES INCOME ACCORDI NGLY. 83. RESPECTFULLY FOLLOWING THE ABOVE FINDINGS OF TH E CO-ORDINATE BENCH IN ASSESSEES OWN CASE, WE DIRECT ACCORDINGLY . 84. NEXT ISSUE RELATES TO CHARGING OF INTEREST U/S 234B OF THE ACT. 85. WE HAVE GIVEN THOUGHTFUL CONSIDERATION TO THE R IVAL CONTENTIONS AND HAVE CAREFULLY PERUSED THE RELEVANT MATERIAL ON RECORD. AS PER THE PROVISIONS OF SECTION 234B OF THE ACT, AN ASSESSEE WHO IS LIABLE TO PAY ADVANCE TAX UNDER SECTION 208 WILL BE LIABLE TO INT EREST UNDER SECTION 234B OF THE ACT, IF HE FAILS TO PAY SUCH TAX, OR TH E ADVANCE TAX PAID BY HIM FALLS SHORT OF 90 PERCENT OF THE ASSESSED TAX. IN OUR UNDERSTANDING OF THE LAW, AN ASSESSEE MUST FIRST BE LIABLE TO PAY ADVANCE TAX UNDER THE PROVISIONS OF SECTION 208 OF THE ACT. AS PER T HE PROVISIONS OF SECTION 208 READ WITH SECTION 209(1)(D) OF THE ACT, ADVANCE TAX PAYABLE HAS TO BE COMPUTED AFTER REDUCING FROM THE ESTIMATED TAX LIABILITY THE AMOUNT OF TAX DEDUCTIBLE/ COLLECTIBLE AT SOURCE ON INCOME WHICH IS INCLUDED IN COMPUTING THE ESTIMATED TAX LI ABILITY. 63 86. UNDER SECTION 195 OF THE ACT, TAX IS DEDUCTIBLE AT SOURCE FROM PAYMENTS MADE TO NON-RESIDENTS. APPELLANT IS A NON -RESIDENT AND THUS, TAX IS DEDUCTIBLE AT SOURCE FROM THE PAYMENTS MADE TO IT UNDER SECTION 195 OF THE ACT. SINCE TAX WAS DEDUCTIBLE AT SOURCE ON ALL THE PAYMENTS MADE TO APPELLANT, NO ADVANCE TAX WAS PAYABLE AS PE R THE PROVISIONS OF THE ACT. 87. THE HON'BLE DELHI HIGH COURT IN THE CASE OF DIT V. GE PACKAGED POWER INC. 373 ITR 65 WHEREIN THE HIGH COURT HELD THAT NO INTEREST UNDER SECTION 234B OF THE ACT CAN BE LEVIED ON THE ASSESSEE-PAYEE ON THE GROUND OF NON-PAYMENT OF ADVANCE TAX BECAUSE TH E OBLIGATION WAS UPON THE PAYER TO DEDUCT THE TAX AT SOURCE BEFORE M AKING REMITTANCES TO THEM. 88. AMENDMENT TO THE PROVISIONS HAVE BEEN BROUGHT B Y THE FINANCE ACT, 2012, W.E.F. 1.4.2012 BY WHICH A PROVISO BELOW SECTION 209(1)(D) OF THE ACT HAS BEEN ADDED BUT APPLICABLE FROM A.Y 2 013-14. CONSIDERING THE LAW ON THIS ISSUE, WE DIRECT THE AS SESSING OFFICER NOT TO CHARGE INTEREST U/S 234B OF THE ACT UPTO A.Y 2012-1 3. INTEREST CAN BE LEVIED AS PER PROVISIONS OF LAW FROM A.Y 2013-14 ON WARDS. 64 89. IN THE RESULT, ALL THE FOLLOWING APPEALS OF THE ASSESSEE ARE DISMISSED: 1. ITA NO. 1500/DEL/2014 [A.Y 2009-10] 2. ITA NO. 6921/DEL/2014 [A.Y 2010-11] 3. ITA NO. 937/DEL/2016 [A.Y 2011-12] 4. ITA NO. 6376/DEL/2016 [A.Y 2012-13] 5. ITA NO. 6377/DEL/2016 [A.Y 2013-14] 6. ITA NO. 6799/DEL/2017 [A.Y 2014-15] 7. ITA NO. 5506/DEL/2018 [A.Y 2015-16] 8. ITA NO. 8263/DEL/2019 [A.Y 2016-17] THE ORDER HAS BEEN PRONOUNCED IN THE OPEN COURT IN THE PRESENCE OF THE REPRESENTATIVE OF BOTH THE SIDES ON 09.12.2 020 . SD/- SD/- [ K. N. CHARY ] [N.K. BILLAIYA] JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 09 TH DECEMBER, 2020 VL/ 65 COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR ASST. REGISTRAR, ITAT, NEW DELHI D A T E O F D I C T A T I O N 0 9 . 1 2 . 2 0 2 0 D A T E O N W H I C H T H E T Y P E D D R A F T I S P L A C E D B E F O R E THE D I C T A T I N G MEMBER D A T E O N W H I C H T H E T Y P E D D R A F T I S P L A C E D B E F O R E T H E O T H E R MEMBER D A T E O N W H I C H T H E APPROVED D R A F T C O M E S T O T H E S R . P S / P S D A T E O N W H I C H T H E F A I R O R D E R I S P L A C E D B E F O R E T H E D I C T A T I N G MEMBER FOR PRONOUNCEMENT D A T E O N W H I C H T H E F A I R O R D E R C O M E S B A C K TO THE S R . P S / P S D A T E O N W H I C H T H E F I N A L O R D E R I S U P L O A D E D O N T H E W E B S I T E O F ITAT D A T E O N W H I C H T H E F I L E G O E S T O T H E B E N C H C L E R K D A T E O N W H I C H F I L E G O E S T O T H E H E A D C L E R K T H E D A T E O N W H I C H F I L E G O E S T O T H E A S S I S T A N T R E G I S T R A R F O R SIGNATURE ON THE ORDER D A T E O F D I S P A T C H O F T H E O R D E R