Appeal details
Counselvise Citation
[2023] 140 COUNSELVISE.COM (IT) 300668 (ITAT-DELHI)
Assessee PAN
Bench
Appeal Number
Duration Of Justice
3 year(s) 7 month(s) 17 day(s)
Appellant
Respondent
Appeal Type
Income Tax Appeal
Pronouncement Date
26-04-2023
Appeal Filed By
Assessee
Order Result
Dismissed
Bench Allotted
D
Next Hearing Date
17-04-2023
Assessment Year
2015-2016
Appeal Filed On
08-09-2019
Judgement Text
IN THE INCOME TAX APPELLATE TRIBUNAL, DELHI BENCH: ‘D’ NEW DELHI BEFORE SHRI SAKTIJIT DEY, JUDICIAL MEMBER AND DR. B.R.R. KUMAR, ACCOUNTANT MEMBER ITA No.6361/Del/2017 Assessment Year: 2014-15 And ITA No.7392/Del/2019 Assessment Year: 2015-16 Inspectorate (Singapore) Pte. Ltd., C/o- Deloitte Haskins & Sells LLP, Bengal Intelligent Park, Building Omega, 14 th Floor, Block EP & GP, Salt Lake Electronics Complex, Kolkata Vs. ACIT, International Taxation, Circle -2(1)(1), New Delhi PAN :AACCI3245C (Appellant) (Respondent) ORDER PER SAKTIJIT DEY, JM: Captioned appeals have been filed by the assessee challenging the final assessment order for the assessment year 2014-15 and the order of learned Commissioner of Income Tax (Appeals) in assessment year 2015-16. Appellant by None Department by Sh. Vizay Vasanta, CIT (DR) Date of hearing 18.04.2023 Date of pronouncement 27.04.2023 ITA Nos.6361/Del/2017 & 7392/Del/2019 AYs: 2014-15 & 2015-16 2 | P a g e 2. When the appeals were called for hearing, none appeared for the assessee. Even, there is no applicable by the assessee seeking adjournment. 3. On perusal of record, it is observed that despite multiple hearing notices issued to the assessee, there is no response from assessee’s side. Having failed in the attempt to serve hearing notices through postal authorities several attempts were made to serve notice through email in the email ID provided in Form 36 for assessment year 2015-16. Though, the notices sent through mail have been delivered to assessee’s email ID, still, there is no response from the assessee. These facts clearly reveal complete lack of interest of the assessee in prosecuting the present appeals. Since, sufficient opportunity of hearing has already been afforded to the assessee and the appeals are pending for past so many years, we deem it appropriate to dispose of them ex parte qua the assessee after hearing learned Departmental Representative and based on materials available on record. 4. Insofar as ITA No.6361/Del/2017 for assessment year 2014- 15 is concerned, the solitary issue arising for consideration is whether the amount received by the assessee from Indian customer is in the nature of Fee for Technical Services (FTS) ITA Nos.6361/Del/2017 & 7392/Del/2019 AYs: 2014-15 & 2015-16 3 | P a g e under the domestic law as well as under Article 12 of India – Singapore Double Taxation Avoidance Agreement (DTAA). 5. Briefly the facts are, the assessee is a Singapore based company and a tax resident of Singapore. As stated, the assessee provides inspection and testing services in various sectors, namely, energy projects, metals and minerals, oil and petroleum, petrochemicals, agriculture, consumer projects, pre-shipment inspection and marine. In the year under consideration, assessee had provided such services to various clients/customers in India and earned revenue of Rs.1,39,71,569/-. In course of assessment proceeding, the Assessing Officer called upon the assessee to show-cause as to why the receipt should not be treated as FTS, both under the Act and the tax treaty. In response, the assessee furnished a detailed reply stating that the amount cannot be treated as FTS, since while providing such services, the assessee has not made available technical knowledge, experience, know- how etc. which can enable the person acquiring such services to apply the technology contained therein independently without the aid and assistance of the assessee. The Assessing Officer, however, did not find merit in the submission of the assessee. Accordingly, he treated the receipts as FTS and brought it to tax. ITA Nos.6361/Del/2017 & 7392/Del/2019 AYs: 2014-15 & 2015-16 4 | P a g e Against the draft assessment order, the assessee raised objection before learned DRP. However, learned DRP upheld the decision of the Assessing Officer. 6. We have heard learned Departmental Representative and perused the materials on record. The only reason on which the assessee has objected taxability of the receipts as FTS is that the make available condition in terms of Article 12 of India – Singapore DTAA is not fulfilled. However, from the observations of learned DRP, it is noticed that similar addition made in the preceding assessment year was not challenged by the assessee. Learned DRP has further observed that the assessee has failed to file a copy of the agreement with the recipient of services to ascertain the exact nature of the payment received. Before us as well, the assessee has not furnished any material to rebut the finding of the departmental authorities. In such a scenario, we do not find any reason to interfere with the decision of departmental authorities. Accordingly, grounds are dismissed. Appeal is dismissed. 7. Insofar as ITA No.7392/Del/2019 for assessment year 2015- 16 is concerned, the issue is more or less identical. The only factual difference being, in this year the assessee has received ITA Nos.6361/Del/2017 & 7392/Del/2019 AYs: 2014-15 & 2015-16 5 | P a g e consultancy fee of Rs.3,53,31,200/- from a related party in India, viz, Inspectorate Griffith India Pvt. Ltd., which has been treated as royalty/FTS. In course of assessment proceeding, the Assessing Officer noticed that the assessee had received an amount of Rs.3,53,31,200/- from its Indian AE. Though, the assessee claimed that the amount neither being in the nature of royalty or FTS is not taxable in India, however, the Assessing Officer was not convinced. He treated the amount received as royalty/FTS and brought to tax at the hands of the assessee. While considering the issue in appeal, learned Commissioner (Appeals) held that the amount received is in the nature of royalty in terms of Article 12(3) of India - Singapore DTAA. From the observations of learned Commissioner (Appeals), it is noticed that while coming to such conclusion, learned Commissioner (Appeals) has recorded a finding of fact that Indian AE has treated it as technical know-how fee given to the assessee. In this context, learned Commissioner (Appeals) has also referred to the description of fee in Form 26AS. The assessee had not brought any material on record to controvert the aforesaid finding. In view of the above, we uphold the decision of learned Commissioner (Appeals) on this issue. ITA Nos.6361/Del/2017 & 7392/Del/2019 AYs: 2014-15 & 2015-16 6 | P a g e 8. In the result, appeal is dismissed. 9. To sum up, both the appeals are dismissed. Order pronounced in the open court on 27 th April, 2023 Sd/- Sd/- (DR. B.R.R. KUMAR) (SAKTIJIT DEY) ACCOUNTANT MEMBER JUDICIAL MEMBER Dated: 27 th April, 2023. RK/- Copy forwarded to: 1. Appellant 2. Respondent 3. CIT 4. CIT(A) 5. DR Asst. Registrar, ITAT, New Delhi
AI Insights
The case involves two appeals by Inspectorate (Singapore) Pte. Ltd., a Singapore-based company, against the orders of the Assessing Officer and the Commissioner of Income Tax (Appeals) for the assessment years 2014-15 and 2015-16. The primary issue in both appeals was the taxability of certain receipts from Indian customers as Fee for Technical Services (FTS) under the Income Tax Act and the India-Singapore DTAA. The tribunal found that the assessee did not fulfill the 'make available' condition required to exclude the receipts from FTS, as no technical knowledge or expertise was made available independently to the Indian customers. Consequently, the tribunal dismissed both appeals, affirming the taxability of the receipts as FTS.
