AXENS (PROJECT OFFICE) [earlier it was HEURTEY PETROCHEM SA (PROJECT OFFICE)], MUMBAI V. DEPUTY COMMISSIONER OF INCOME TAX, (IT) -2(2)(2), MUMBAI

ITA 7024/MUM/2018

• Counselvise Citation: [2019] 116 COUNSELVISE.COM (IT) 7339 (ITAT-MUMBAI)
• Duration Of Justice: 7 month(s) 18 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-07-2019
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: I
• Assessment Year: 2010-2011
• Appeal Filed On: 07-12-2018
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: NISHANT SAMAIYA
• Keywords: Tax effect
• Section: 143(3)

Judgement Text

1 IN THE INCOME-TAX APPELLATE TRIBUNAL I BENCH MUM BAI BEFORE SHRI PAWAN SINGH, JUDICIAL MEMBER AND SHRI RAMIT KOCHAR, ACCOUNTANT MEMBER ITA NO. 7024/MUM/2018 (ASSESSMENT YEAR 2010-11 ) ITA NO. 7123/MUM/2018 (ASSESSMENT YEAR 2011-12 ) AXENS (PROJECT OFFICE) A-301, BOOMERANG MAIN CHANDIVALI FARM ROAD, NEAR CHANDIVALI STUDIO, ANDHERI (EAST), MUMBAI-400059. PAN: AACCH0871M VS. DCIT, INTERNATIONAL TAXATION- 2(2)(2), ROOM NO. 1606, 16 TH FLOOR, AIR INDIA BUILDING, NARIMAN POINT, MUMBAI-400021. APPELLANT RESPONDE NT APPELLANT BY : SHRI NITESH JOSHI WITH TEHMATON WADIA (AR) RESPONDENT BY : SHRI NISHANT SAMAIYA (DR) DATE OF HEARING : 25.07.2019 DATE OF PRONOUNCEMEN T : 25.07.2019 ORDER UNDER SECTION 254(1)OF INCOME TAX ACT PER BENCH; 1. THESE TWO APPEALS BY ASSESSEE ARE DIRECTED AGAINST THE ASSESSMENT ORDER PASSED UNDER SECTION 143(3) R.W.S. 144C DATED 28.09.2018 FOR ASSESSMENT YEAR 2010-11 AND DATED 30.10.2018 UNDER SECTION 143(3) R.W.S. 144C(13) FOR ASSESSMENT YEAR 2011-12. IN BOT H THE APPEALS, THE ASSESSEE HAS RAISED COMMON GROUND OF APPEAL EXCEPT VARIATION OF ADDITION OF FIGURE, THEREFORE, BOTH THE APPEALS WER E CLUBBED, HEARD AND WAS TAKEN TOGETHER FOR ADJUDICATION. IN APPEAL FOR ASSESSMENT YEAR 2010-11, THE ASSESSEE HAS RAISED FOLLOWING GROUNDS OF APPEAL: ITA NO . 7024 & 7123 MUM 2018-AXENS 2 1.1 ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE ASSESSING OFFICER ('AO') ERRED IN CONCLUDING AND THE DISPUTE RESOLUTION PANEL ('DRP') ERRED IN CONFIRMING THAT THE INCOME PERTAIN ING TO OFFSHORE SUPPLIES FROM CONTRACT WITH INDIAN OIL CORPORATION LIMITED ( 'JOCL') IS TAXABLE IN INDIA BASIS THAT THE CONTRACT IS A COMPOSITE CONTRA CT 1.2 WITHOUT PREJUDICE TO ABOVE, THE AO / DRP HAVE E RRED IN LAW IN APPLYING THE AVERAGE GLOBAL PROFITABILITY RATE OF 2 .58 PERCENT ON THE GROSS RECEIPTS FROM OFFSHORE SUPPLIES TO ARRIVE AT TAXABL E INCOME OF INR 8,80,372 UNDER THE HEAD 'INCOME FROM BUSINESS AND P ROFESSION' WITHOUT CONSIDERING THAT THE INCOME FROM OFFSHORE SUPPLIES ARE NOT ATTRIBUTABLE TO THE PROJECT OFFICE / PE IN INDIA AND THE TITLE OF G OODS HAVE PASSED OUTSIDE INDIA WITH RESPECT TO THIS OFFSHORE SUPPLY. 2. IN APPEAL FOR ASSESSMENT YEAR 2011-12, THE ASSESSEE HAS RAISED FOLLOWING GROUNDS OF APPEAL: 1.1 ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE ASSESSING OFFICER ('AO') ERRED IN CONCLUDING AND THE DISPUTE RESOLUTION PANEL ('DRP') ERRED IN CONFIRMING THAT THE INCOME PERTAIN ING TO OFFSHORE SUPPLIES FROM CONTRACT WITH INDIAN OIL CORPORATION LIMITED ( 'JOCL') IS TAXABLE IN INDIA BASIS THAT THE CONTRACT IS A COMPOSITE CONTRA CT 1.2 WITHOUT PREJUDICE TO ABOVE, THE AO / DRP HAVE E RRED IN LAW IN APPLYING THE AVERAGE GLOBAL PROFITABILITY RATE OF 2 .54 PERCENT ON THE GROSS RECEIPTS FROM OFFSHORE SUPPLIES TO ARRIVE AT TAXABL E INCOME OF INR 49,89,101 UNDER THE HEAD 'INCOME FROM BUSINESS AND PROFESSION' WITHOUT CONSIDERING THAT THE INCOME FROM OFFSHORE SUPPLIES ARE NOT ATTRIBUTABLE TO THE PROJECT OFFICE / PE IN INDIA AND THE TITLE OF G OODS HAVE PASSED OUTSIDE INDIA WITH RESPECT TO THIS OFFSHORE SUPPLY. 3. AT THE OUTSET OF HEARING SH. NITESH JOSHI ADVOCATE/ THE LD. AUTHORIZED REPRESENTATIVE (LD. AR) OF THE ASSESSEE SUBMITS THA T DUE TO SMALLNESS OF ADDITIONS AND QUANTUM OF TAX EFFECT, HE HAS INS TRUCTION FROM THE ASSESSEE FOR NOT TO PRESS/ WITHDRAWAL THE APPEAL FO R BOTH THE ITA NO . 7024 & 7123 MUM 2018-AXENS 3 ASSESSMENT YEAR. THE LD. AR OF THE ASSESSEE FURTHER SUBMITS THAT THOUGH THE ASSESSEE HAS MERIT IN GROUNDS OF APPEAL, BUT MERELY NOT PRESSING THE GROUNDS OF APPEAL SHOULD NOT BE TREATE D AS ADMISSION/PRECEDENT AGAINST THE ASSESSEE FOR OTHER YEARS. THE WITHDRAWAL/NOT PRESSING THE GROUND OF APPEAL IS ONL Y DUE TO THE REASON THAT THE TAX EFFECT INVOLVED IN BOTH THE YEAR IS LO W. 4. ON THE OTHER HAND, THE LD. DEPARTMENTAL REPRESENTAT IVE (DR) FOR THE REVENUE SUBMITS THAT SINCE THE ASSESSEE IS NOT PRES SING ITS GROUNDS AND WITHDRAWING THEIR APPEALS, THE DEPARTMENT IS PRESEN TING ITS ARGUMENTS OTHERWISE DEPARTMENT WANTS TO CONTEST THESE APPEALS . THE LEARNED DR FAIRLY LEFT THE MATTER TO DISCRETION OF THE BENCH 5. WE HAVE CONSIDERED THE SUBMISSION OF BOTH THE LEARN ED REPRESENTATIVES AND PERUSED THE ORDER OF LOWER AUTHORITIES. WE HAVE NOTED THAT THE ADDITION IN ASSESSMENT YEAR 2010-11 IS ONLY OF RS. 8,80,372/- UNDER THE HEAD INCOME FROM BUSINESS & PROFESSION. SIMIL ARLY, THE ADDITION FOR ASSESSMENT YEAR 2011-12 IS ONLY OF RS. 49,89,10 1/-. CONSIDERING THE SUBMISSIONS MADE BY LD. AR OF THE ASSESSEE AT B AR, THE APPEALS FOR BOTH THE ASSESSMENT YEAR ARE DISMISSED AS NOT PRESS ED. WE FURTHER ACCEPT THE SUBMISSION OF LD. AR OF THE ASSESSEE THA T WITHDRAWAL OF THESE APPEALS /NOT PRESSING THE GROUNDS OF APPEAL S HALL NOT BE TREATED AS ADMISSION AGAINST THE ASSESSEE ON SIMILAR GROUND OF APPEAL FOR OTHER ITA NO . 7024 & 7123 MUM 2018-AXENS 4 YEARS. WE ALSO CLARIFY THAT WE HAVE NOT COMMENTED O N THE MERITS OF THE ISSUES IN THESE APPEALS AND THEY ARE DISMISSED ONLY ON THE REQUEST OF THE ASSESSEE. WE ALLOW THE ASSESSEE TO WITHDRAW THE SE TWO APPEALS WHICH STAND DISMISSED. WE ORDER ACCORDINGLY. 6. IN THE RESULT, APPEALS OF THE ASSESSEE FOR BOTH THE ASSESSMENT YEARS ARE DISMISSED AS WITHDRAWN. ORDER PRONOUNCED IN THE OPEN COURT ON 25 /07/2019. SD/- SD/- RAMIT KOCHAR PAWAN SINGH ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI, DATE: 25.07.2019 SK COPY OF THE ORDER FORWARDED TO : 1. ASSESSEE 2. RESPONDENT 3. THE CONCERNED CIT(A) 4. THE CONCERNED CIT 5. DR I BENCH, ITAT, MUMBAI 6. GUARD FILE BY ORDER, DY./ASST. REGISTRAR ITAT, MUMBAI