Korea South East Power Company Ltd., Mumbai V. The Dy.DIT, Intl. Taxn.-1, Ahmedabad

ITA 690/AHD/2015

• Counselvise Citation: [2017] 130 COUNSELVISE.COM (IT) 9300 (ITAT-AHMEDABAD)
• Duration Of Justice: 1 year(s) 10 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 10-02-2017
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: I
• Next Hearing Date: 17-01-2017
• Assessment Year: 2011-2012
• Appeal Filed On: 26-03-2015
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: SUMAN SHARMA HEARING CONCLUDED
• Keywords: Business income; Double taxation relief; Permanent establishment
• Section: 143(3)

Judgement Text

I.T.A. NO. 690 /AHD/201 5 ASSESSMENT Y EAR: 20 11 - 12 PAGE 1 OF 3 IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD C BENCH, AHMEDABAD [CORAM: PRAMOD KUMAR AM AND RAJPAL YADAV JM] I.T.A. NO. 690 /AHD/201 5 ASSESSMENT Y EAR : 20 11 - 12 KOREA SOUTH EAST POWER CO. LTD., ... ........... . APPELLANT C/O. PA G E & CO., 201, SARD AR GRIHA, 198, L.T. MARG, MUMBAI. 4000 002. [PAN: AA E C K 0562 E ] VS. DEPUTY DIRECTOR OF INCOME TAX, INTERNATIONAL TAXATION - 1, AHMEDABAD. ..... ............ RESPONDENT APPEARANCES BY NONE FOR THE APPELLANT SUMAN SHARMA FOR THE RESPONDENT HEARING CONCLUDED ON: 1 9 / 0 1 / 20 17 ORDER PRONOUNCED ON : 10 / 0 2 / 20 1 7 O R D E R PER PRAMOD KUMAR , AM: 1. BY WAY OF THIS APPEAL , THE ASSESSEE APPELLANT HAS CHALLENGED CORRECTNESS OF THE ORDER DATED 5 TH JANUARY 2015, PASSED BY THE DEPUTY COMM ISSIONER OF INCOME TAX (INTERNATIONAL TAXATION), RAJKOT, UNDER SECTION 143(3) R.W.S. 144C OF T HE INCOME TAX ACT, 1961 , FOR THE ASSESSMENT YEAR 20 11 - 12. 2. GRIEVANCES RAISED BY THE ASSESSEE ARE AS FOLLOWS : - 1. LEARNED A.O. ERRED ON THE FACTS AND IN THE C IRCUMSTANCES OF THE CASE, IN HOLDING THAT, THE APPELLANT IS NOT CARRYING ON BUSINESS OF COMMISSIONING OF POWER PROJECT APPROVED BY THE CENTRAL GOVT., AND THEREFORE IS NOT ELIGIBLE ASSESSEE U/S 44BBB OF THE I.T. ACT 1961. 2. LEARNED A.O. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE ERRED IN NOT APPRECIATING THE FACT THAT THE APPELLANT HAS A BUSINESS CONNECTION IN INDIA I.T.A. NO. 690 /AHD/201 5 ASSESSMENT Y EAR: 20 11 - 12 PAGE 2 OF 3 AND FURTHER NOT CONSIDERING THE INCOME OF THE APPELLANT AS 'BUSINESS INCOME' AND BRINGING TO TAX THE INCOME OF THE APPELLANT AS 'FEES FOR TECHNICAL SERVICES' AS MENTIONED IN ARTICLE 13 OF DTAA WITH GOVT. OF SOUTH KOREA. 3. WITHOUT PREJUDICE AND IN ALTERNATIVE, THE LEARNED A.O. ERRED ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE IN NOT APPRECIATING THE FACT THAT THE APPELLANT HAS BU SINESS INCOME THROUGH THE PERMANENT ESTABLISHMENT/BUSINESS CONNECTION IN INDIA AND IS ELIGIBLE TO GET BENEFIT UNDER PROVISIONS OF SEC. 44BBB OF THE INCOME TAX ACT, 1961 OR ARTICLE 7 OF D.T.A.A. WITH GOVT. OF SOUTH KOREA, WHICHEVER IS BENEFICIAL TO THE APPE LLANT. 4. LEARNED A.O. ERRED ON THE FACTS AND IN LAW IN NOT APPRECIATING THE FACT THAT THE ACTIVITIES MENTIONED IN SEC. 44BBB OF THE INCOME TAX ACT ARE DIFFERENT AND INDEPENDENT AND NOT ONE SINGLE COMPOSITE ACTIVITY AS MADE OUT BY THE A.O. IN HIS PLEADIN G AS EACH INDIVIDUAL ACTIVITY IS SEPARATED BY THE WORD 'OR' AND THEREFORE ANY ONE ACTIVITY I.E. 'TESTING' OF PLANT AND MACHINERY IS SUFFICIENT FOR THE APPELLANT TO BE ELIGIBLE FOR BENEFIT U/S 44BBB. 5. THE LEARNED A.O. ON THE FACTS AND IN THE CIRCUMSTANC ES OF THE CASE, F, LIED TO APPRECIATE THE FACT THAT THE APPELLANT HAS UNDERTAKEN NOT ONLY 'TESTING OF PLANT AND MACHINERY BUT ALSO 'COMMISSIONING' THEREOF, WHEN EVEN ANY ONE ACTIVITY OF THE TWO WAS SUFFICIENT TO MAKE THE APPELLANT ELIGIBLE FOR THE BENEFIT U/S 44BBB OF THE I. T. ACT, 1961. 6. WITHOUT PREJUDICE AND IN ALTERNATIVE, IF IT IS HELD THAT THE APPELLANT HAS NOT BROUGHT ON RECORD, THAT IT HAS A PE IN INDIA AND FURTHER HELD THAT THERE IS NO PE. IN CASE OF THE APPELLANT AS MADE OUT BY THE A.O. THE A .O. ERRED IN LAW IN NOT CONSIDERING THAT THE APPELLANT'S INCOME SHALL BE TAXABLE ONLY IN CONTRACTING STATE I.E. IN SOUTH KOREA AND NOT IN INDIA. 3. NONE APPEARED FOR THE ASSESSEE . ON A PERUSAL OF RECORDS, WE HAVE ALSO NOTICED THAT NONE APPEARED FOR THE ASSESSEE BEFORE THE DISPUTE RESOLUTION PANEL AS WELL. WE HAVE, NEVERTHELESS, HEARD LEARNED DEPARTMENTAL REPRESENTATIVE, PERUSED THE MATERIAL ON RECORD AND DULY CONSIDERED FACTS OF THE CASE IN THE LIGHT OF THE APPLICABLE LEGAL POSITION. 4. AS FAR A S ASSESS EE S CLAIM OF SECTION 44BBB IS CONCERNED, WE HAVE NOTED CATEGORICAL FINDING OF THE ASSESSING O FFICER TO THE EFFECT THAT THE ASSESSEE IS PROVIDING ONLY TECHNICAL CONSULTANCY SERVICES TO CGPL AND IS NOT ENGAGED IN ANY COMMISSIONING ACTIVITIES . THERE IS NO THING BEFORE US TO CONTROVERT THIS FINDING. IN OUR CONSIDERED VIEW, THEREFORE, THE APPLICABILITY OF SECTION 44BBB WAS RIGHTLY DECLINED BY THE AUTHORITIES I.T.A. NO. 690 /AHD/201 5 ASSESSMENT Y EAR: 20 11 - 12 PAGE 3 OF 3 BELOW. ONCE WE COME TO THIS CONCLUSION, AND IN THE ABSENCE OF ANYTHING ELSE TO ESTABLISH THE CONTENT IONS OF THE ASSESSEE, WE SEE NO INFIRMITY IN THE ACTION OF THE AUTHORITIES BELOW IN TAXING IMPUGNED RECEIPTS AS FEES FOR TECHNICAL SERVICES UNDER ARTICLE 13 OF INDIA SOUTH KOREA DTAA. WE, THEREFORE, CONFIRM THE IMPUGNED ACTION OF THE AUTHORITIES BELOW AND DECLINE TO INTERFERE IN THE MATTER. 5 . IN THE RESULT, APPEAL IS DISMISSED. PRONOUNCED IN THE OPEN COURT ON THIS 10 TH DAY OF FEBRUARY , 2017 . SD/ - SD/ - RAJPAL YADAV PRAMOD KUMAR (JUDICIAL MEMBER) (ACCOUNTANT MEMB ER) DATED: 10 TH DAY OF FEBRUARY , 201 7 . COPIES TO : (1) THE APPELLANT (2) THE RESPONDENT (3) CIT (4) CIT(A) (5) DR (6) GUARD FILE BY ORDER ASSISTANT REGISTRAR INCOME TAX APPELLATE TRIBUNAL AHMEDABAD BENCHES, AHMED ABAD