The DCIT(Intl. Taxn),, Ahmedabad V. M/s. Shandong Tiejun Electric Power Engg. Company Ltd., Kutch

ITA 80/AHD/2018

• Counselvise Citation: [2020] 111 COUNSELVISE.COM (IT) 3644 (ITAT-AHMEDABAD)
• Duration Of Justice: 2 year(s) 1 month(s) 30 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 04-03-2020
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: D
• Next Hearing Date: 03-03-2020
• Assessment Year: 2011-2012
• Appeal Filed On: 05-01-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: S N SOPARKAR; SHRUNJAL SHAH A
• Keywords: Rejection of books of accounts; Transfer pricing; Double taxation relief; International transaction; Permanent establishment; Question of law
• Section: 92C; 10B; 201; 44AB; 13; 145(3); 145

Judgement Text

, D IN THE INCOME TAX APPELLATE TRIBUNAL D BENCH, AHMEDABAD BEFORE SHRI RAJPAL YADAV , VICE PRESIDENT AND SHRI T. S. KAPOOR, ACCOUNTANT MEMB ER ./ I.T.A. NOS. 80, 81 & 82/AHD/2018 ( / ASSESSMENT YEARS : 2011-12, 2012-13 & 2013-14) THE DY. COMMISSIONER OF INCOME-TAX (INTERNATIONAL TAXATION) 205, 2 ND FLOOR, NAVJEEVAN TRUST BUILDING, B/H. GUJARAT VIDYAPITH, ASHRAM ROAD, AHMEDABAD / VS. M/S. SHANDONG TIEJUN ELECTRIC POWER ENGINEERING COMPANY LTD. SURVEY NO. 180P, VILL. TUNDA & SIRACHA, MUNDRA KUTCH 370435 ./ ./ PAN/GIR NO. : AALCS4118F ( / APPELLANT ) .. ( / RESPONDENT ) / APPELLANT BY : SHRI VINOD TANWANI, SR.D.R. / RESPONDENT BY : SHRI S. N. SOPARKAR, SR. ADVOCATE & SHRI SHRUNJAL SHAH, A.R. / DATE OF HEARING 03/03/2020 !'# / DATE OF PRONOUNCEMENT 04/03/2020 / O R D E R PER T. S. KAPOOR - AM: THIS IS A GROUP OF THREE APPEALS FILED BY THE REVEN UE AGAINST THE SEPARATE ORDERS OF LEARNED CIT(A)-13, AHMEDABAD , ALL DATED 31/10/2017 RELATING TO ASSESSMENT YEAR 2011-12 TO 2 013-14. ITA NOS. 80, 81 & 82/AHD/18 [DCIT VS. M/S. SHANDONG TIEJUN ELECTRIC POWER ENGINEERING CO. LTD.] A.Y. 2011-12 T O 2013-14 - 2 - 2. SIMILAR GROUNDS OF APPEAL HAVE BEEN TAKEN BY THE REVENUE AND THESE APPEALS WERE HEARD TOGETHER THEREFORE FOR THE SAKE OF CONVENIENCE, A COMMON AND CONSOLIDATED ORDER IS BEI NG PASSED. FOR THE SAKE OF COMPLETENESS, THE GROUNDS OF APPEAL TAK EN BY THE REVENUE IN ITA NO.80/AHD/2018 ARE REPRODUCED BELOW: 1. THE LD. CIT(A) ERRED IN LAW AND ON FACTS IN HOL DING THAT THE ACTION OF THE AO IN REJECTING THE BOOKS OF ACCOUNT OF THE ASSESSEE COMPANY WAS INCORRECT INSPITE OF CLEAR EVIDENCE BRO UGHT ON RECORD THAT THE PROFIT COMPUTED BY THE ASSESSES WAS NOT RELIABLE. 2. THE LD. CIT(A) ERRED IN LAW AND ON FACTS IN H OLDING THAT THE ACTION OF THE AO IN RESORTING TO ESTIMATION OF INCO ME ON PRESUMPTIVE BASIS OF 10% U/S.44BBB(1) OR ALTERNATEL Y @10.98% UNDER NORMAL PROVISIONS OF THE ACT WAS NOT CORRECT. 3. THE LD. CIT(A) ERRED IN HOLDING THAT IN THE PR ESENT FACTS AND CIRCUMSTANCES, CUP WAS A BETTER METHOD FOR BENCHMAR KING AS AGAINST TNMM ADOPTED BY THE TPO. 4. THE LD. CIT(A) ERRED IN HOLDING THAT THE TRA NSACTION OF AWARDING OF CONTRACT BY ADANI POWER LIMITED AND JHAJJAR POWE R LIMITED TO SHANDONG HO IS A PROPER CUP FOR THE TRANSACTION BETWEEN SHANDONG HO AND SHANDONG PE WITHOUT APPRECIATING TH AT THE NATURE OF TRANSACTION BETWEEN SHANDONG HO AND SHAND ONG PE WAS FUNCTIONALLY DIFFERENT AND COULD NOT BE COMPARE D WITH THE TRANSACTION BETWEEN APL/JPL AND SHANDONG HO WHICH M ERELY RELATED TO AWARDING OF CONTRACT. 5. THE LD. CIT(A) ERRED IN LAW AND ON FACTS IN HO LDING THAT THE COMPARABLES SELECTED BY THE TPO WERE FUNCTIONALLY I NCOMPARABLE WITHOUT ASSIGNING ANY REASON WHATSOEVER. 3. AT THE OUTSET, LEARNED AR SUBMITTED THAT ISSUES RAISED BY REVENUE IN ALL THESE THREE APPEALS ARE SQUARELY COV ERED BY THE ORDERS OF HONBLE ITAT CONFIRMED BY HONBLE GUJARAT HIGH COURT IN THE CASE OF ASSESSEE ITSELF AND LEARNED CIT(A) H AS FOLLOWED AYS.2009-10 & 2010-11 ONLY TO ALLOW RELIEF TO THE A SSESSEE. THE LEARNED AR IN THIS ASPECT INVITED OUR ATTENTION TO YEAR-WISE CHART PLACED ON RECORD WHEREIN AOS PAGE AND PARA AND CIT (A)S PAGE AND PARA NUMBERS WERE MENTIONED AND IN THE REMARKS COLUMN ITA NOS. 80, 81 & 82/AHD/18 [DCIT VS. M/S. SHANDONG TIEJUN ELECTRIC POWER ENGINEERING CO. LTD.] A.Y. 2011-12 T O 2013-14 - 3 - RELEVANT ITA NOS. IN THE CASE OF ASSESSEE ITSELF WE RE MENTIONED WHICH HAS BEEN FOLLOWED BY LEARNED CIT(A). 4. THE LEARNED DR FAIRLY AGREED THAT THE ISSUES WER E COVERED IN FAVOUR OF THE ASSESSEE. 5. WE HAVE HEARD THE RIVAL PARTIES AND HAVE GONE TH ROUGH THE MATERIAL PLACED ON RECORD. 6. WE FIRST TAKE ITA NO. 80/AHD/2018 FOR AY 2011-12 . 7. IN THIS APPEAL, FIRST GROUND IS REGARDING THE AC TION OF THE LEARNED CIT(A) BY WHICH HE HAS ALLOWED RELIEF TO TH E ASSESSEE BY ACCEPTING THE BOOKS OF ACCOUNTS WHICH THE ASSESSING OFFICER HAD REJECTED. GROUND NO.2 IS REGARDING ACTION OF THE L EARNED CIT(A) WHEREBY THE LEARNED CIT(A) HAS ALLOWED RELIEF TO TH E ASSESSEE BY HOLDING THAT ACTION OF THE AO RESORTING TO ESTIMATI ON OF INCOME ON PRESUMPTIVE BASIS @ 10% WAS NOT CORRECT. BOTH THES E ISSUES HAVE BEEN DEALT BY LEARNED CIT(A) FROM PARA 3 TO 13 WHER EIN RELYING UPON THE ORDERS OF HONBLE ITAT AND THAT OF HONBLE GUJARAT HIGH COURT IN THE CASE OF ASSESSEE ITSELF, THE LEARNED C IT(A) HAS ALLOWED RELIEF TO THE ASSESSEE BY HOLDING AS UNDER: 3. I HAVE GONE THROUGH THE ASSESSMENT ORDER AND WR ITTEN SUBMISSIONS FURNISHED BY THE AR OF THE APPELLANT WH ICH HAVE BEEN PLACED ON RECORD. 4. THE AR OF THE APPELLANT HAS ALSO , DURING THE COURSE OF APPEAL PROCEEDINGS, FURNISHED COPY OF THE ORDER OF THE HON 'BLE ITAT DATED 18/01/2017 AND COPY OF THE ORDER OF THE HON'B LE JURISDICTIONAL GUJARAT HIGH COURT DATED 18/09/2017 IN THE APPELLANT'S OWN CASE WHEREBY THE HON'BLE GUJARAT HI GH COURT HAS DISMISSED THE APPEAL FILED BY THE INCOME TAX DE PARTMENT AGAINST THE ORDER OF HON'BLE ITAT AHMEDABAD WHEREIN THE HON'BLE ITAT HAS CONFIRMED THE ACTION OF THE THEN L D CIT (APPEALS), GANDHINAGAR OF DELETING THE ADDITION ON ACCOUNT OF REJECTION OF BOOKS OF ACCOUNTS ON IDENTICAL FACTS F OR A.Y.2009-10. ITA NOS. 80, 81 & 82/AHD/18 [DCIT VS. M/S. SHANDONG TIEJUN ELECTRIC POWER ENGINEERING CO. LTD.] A.Y. 2011-12 T O 2013-14 - 4 - 5. FURTHER, THE AR OF THE APPELLANT HAS POINTED OUT THE OBSERVATION OF THE LD. ASSESSING OFFICER IN PARA 3.2 OF THE ASS ESSMENT ORDER WHICH READS AS UNDER: 'AT THE OUTSET, IT IS STATED THAT THE FACTS OF THE CASE ARE EXACTLY SAME AS IN AY 2010-II AND EARLIER YEARS AND THERE I S NO CHANGE IN THE FADS OF THE CASE. THEREFORE, ARGUMENTS RELIE D UPON BY THE AO IN AY 2010-11 AND EARLIER YEARS ARE EQUALLY APPL ICABLE TO THE CASE OF THE ASSESSE. THE UNDERSIGNED THEREFORE RELI ES ON THE REASONING PROVIDED IN THE SAID ORDERS WHICH ARE BEI NG DISCUSSED HEREUNDER. ' 6. THEREFORE, IT HAS BEEN ACCEPTED BY THE AO THA T THE FACTS OF THE CASE FOR THIS YEAR ARE EXACTLY SAME AS IN A.Y. 2010 -11 AND EARLIER YEARS WHICH IS ALSO AN OBSERVATION OF THE L D AO. ACCORDINGLY, SIMILAR ACTIONS HAVE BEEN TAKEN BY THE LD AO AS WERE TAKEN BY THE AO IN THE EARLIER ASSESSMENT YEAR S 2009-10 AND 2010-11. IT IS FURTHER SEEN THAT THE CONTRACTS ENTERED INTO BY THE APPELLANT WITH ADANI POWER LTD (APL) AND JHAJJA R POWER LTD (JPL) FOR MUNDRA AND HARYANA POWER PROJECTS RESPECT IVELY HAVE CONTINUED FROM A.Y. 2009-10 TILL THE YEAR UNDER APP EAL BEFORE ME. THERE IS NO MATERIAL CHANGE IN THE ACCOUNTING M ETHODS FOLLOWED BY THE APPELLANT AND INCOME OFFERED BY THE APPELLANT U/S 44BBB(2) OF THE ACT. THE AO HAS ALSO NOT BROUGH T ON RECORD ANY FURTHER EVIDENCES WHICH CAN AT LEAST DEMONSTRAT E THAT THE FACTS IN THE YEAR UNDER APPEAL BEFORE ME ARE DIFFER ENT OR DISTINGUISHABLE THEN THE IMMEDIATE PRECEDING A.YS. 2009-10 AND 2010-11. THEREFORE, I AM OF THE OPINION THAT THE IS SUES BEFORE ME IN THE YEAR UNDER APPEAL HAVE ALREADY BEEN DECIDED BY CIT (A), GANDHINAGAR IN THE IMMEDIATE PRECEDING A.YS.2009-10 AND 2010- 11, WHEREIN, THEY HAVE GIVEN DETAILED REASONING IN ACCEPTING THE BOOKS OF ACCOUNTS OF THE APPELLANT; ACCEPTING THE I NCOME DECLARED U/S 44BBB(2) OF THE ACT AND DISCARDING THE ACTION OF THE AO IN ESTIMATING INCOME AFTER REJECTING BOOKS O F ACCOUNTS AS WELL AS ALTERNATIVE ADDITION OF INCOME BY VIRTUE OF PROVISIONS OF S.44BBB(1) OF THE ACT. 7. IT IS ALSO NOTED THAT THE FINDINGS OF CIT (A ), GANDHINAGAR HAVE ALSO BEEN CONFIRMED BY THE HON'BLE ITAT AND HON'BIE GUJARAT HIGH COURT IN THE APPELLANT'S OWN CASE FOR A.Y.2009 -10. SINCE THE FINDINGS OF THE HON'BLE TRIBUNAL AND HON'BLE GU JARAT HIGH COURT ARE ON THE IDENTICAL FACTS IN THE CASE OF THE APPELLANT ITSELF, 1 AM DUTY BOUND TO FOLLOW THE FINDINGS GIVE N BY THEM AND ADOPT THE SAME IN MY APPELLATE ORDER FOR THE YEAR U NDER APPEAL. THEREFORE, I FEEL APPROPRIATE TO REPRODUCE THE FIND INGS FROM THE SAID APPELLATE ORDERS AS UNDER: 8. THE THEN LD CIT(A) HAS, IN HIS ORDER FOR A.Y .2009-10 IN APPEAL NO.CIT(A)GNR/207/INTL.TAXN./2011-12 DATED 18/03/201 3, HELD AS UNDER : '6.5 I HAVE GONE THROUGH THE ASSESSMENT ORDER, SUBM ISSIONS, CASE LAW ETC. CAREFULLY. THE FOLLOWING PERTINENT OB SERVATIONS /DECISIONS ARE MADE AFTER THOROUGH CONSIDERATION OF ALL FACTS, SUBMISSIONS, EVIDENCES: ITA NOS. 80, 81 & 82/AHD/18 [DCIT VS. M/S. SHANDONG TIEJUN ELECTRIC POWER ENGINEERING CO. LTD.] A.Y. 2011-12 T O 2013-14 - 5 - A) THE APPELLANT HAS OPTED FOR BEING ASSESSED UNDER SECTION UNDER SECTION 44BBB(2) OF THE IT ACT, THE SUB-SECTI ON IS REPRODUCED HEREIN UNDER' 'NOTWITHSTANDING ANYTHING CONTAINED IN SUB-SECTION (1), AN ASSESSEE MAY CLAIM LOWER PROFITS AND GAINS THAN THE PROFITS AND GAINS SPECIFIED IN THAT SUB-SECTION, IF HE KEEPS AND MAINTAINS SUCH BOOKS OF ACCOUNT AND OTHER DOCUM ENTS AS REQUIRED UNDER SUB-SECTION (2) OF SECTION 44AA A ND GETS HIS ACCOUNTS AUDITED AND FURNISHES A REPORT OF SUCH AUDIT AS REQUIRED UNDER SECTION 44AB, AND THEREUPON THE ASSESSING OFFICER SHALL PROCEED TO MAKE AN ASSESSME NT OF THE TOTAL INCOME OR LOSS OF THE ASSESSES UNDER SUB- SECTION (3) OF SECTION 143 AND DETERMINE THE SUM PAYABLE BY , OR REFUNDABLE TO, THE ASSESSEE.' (EMPHASIS SUPPLIED) THE SECTION CLEARLY PROVIDES AN OPTION TO AN ASSESS ES BEING A FOREIGN COMPANY ENGAGED IN THE BUSINESS OF CIVIL CONSTRUCTION, ERECTION OF PLANT OR MACHINERY, TESTI NG AND COMMISSIONING OF POWER PROJECT TO OFFER TO LAX LOWE R PROFITS AND GAINS THAN PROFIT DEEMED OF 10% OF THE AMOUNT RECEIVABLE BY THE APPELLANT UNDER SECTION (1) OF SE CTION 44BBB OF THE IT ACT PROVIDED FOLLOWING TWIN CONDITI ONS ARE FULFILLED' (1) THE APPELLANT SHALL KEEP AND MAINTAIN SUCH BOOK S OF ACCOUNT AND OTHER DOCUMENTS AS REQUIRED UNDER SUB- SECTION (2) OF SECTION 44AA OF THE IT ACT. (2) THE APPELLANT SHALL GET HIS ACCOUNTS AUDITED AN D FURNISHES A REPORT OF SUCH AUDIT AS REQUIRED UNDER SECTION 44AB OF THE IT ACT. B) ADMITTEDLY, AS CLAIMED BY APPELLANT NO SPECIFIC BOOKS OF ACCOUNTS ARE PRESCRIBED U/S 44AA OF THE IT ACT READ WITH RELEVANT IT RULES FOR THE NATURE OF BUSINESS CARRIE D ON BY THE APPELLANT. IT HAS MAINTAINED BOOKS OF ACCOUNT A ND GOT THEM AUDITED ALSO. BESIDES, THE APPELLANT HAS SUBMI TTED AUDIT REPORT OF A CHARTERED ACCOUNTANT ON VERACITY OF FINANCIAL STATEMENTS AND AUDIT REPORT AS PER COMPAN IES (AUDITOR'S REPORT), 2003 IN TERMS OF SECTION 227(4' A) OF THE COMPANIES ACT. C) SO FAR AS THE APPLICABILITY OF THE AS-7 IS CONCE RNED, ONE OF THE OBJECTIONS OF LD.AO WAS THAT THE SAME IS NOT APPLICABLE TO THE APPELLANT COMPANY BEING A FOREIGN COMPANY. I DO NOT FIND IT TRUE, BECAUSE AS PER SECT ION 594 OF THE COMPANIES ACT, 1956 THE COMPANY, WHICH IS INCORPORATED OUTSIDE INDIA AND HAS ESTABLISHED PLAC E OF A BUSINESS IN INDIA IS REQUIRED TO PREPARE ITS BALANC E SHEET AND PROFIT & LOSS ACCOUNT AS PER THE VARIOUS PROVIS IONS OF THE COMPANIES AC!, AS IF IT IS A INDIAN COMPANY WITH THE MEANING OF THE COMPANIES ACT. CONSEQUENTLY, IT FOLLOWS THAT THE ACCOUNTING STANDARD AS-7 IS APPLIC ABLE TO IT. D) ACCORDINGLY, THE APPELLANT HAS CLAIMED TO HAVE R ECOGNIZED REVENUE AND COST FOLLOWING THE PERCENTAGE COMPLETIO N METHOD ON THE BASIS OF PROPORTION OF COST CONTRACT COSTS ITA NOS. 80, 81 & 82/AHD/18 [DCIT VS. M/S. SHANDONG TIEJUN ELECTRIC POWER ENGINEERING CO. LTD.] A.Y. 2011-12 T O 2013-14 - 6 - INCURRED FOR WORK PERFORMED TILL THE REPORTING DATE TO THE ESTIMATED TOTAL CONTRACT COSTS. IT IS FURTHER AN AD MITTED FACT THAT THE BOOKS OF ACCOUNTS OF THE APPELLANT AR E AUDITED UNDER THE COMPANIES ACT AND IN THE NOTES TO THE FINANCIAL STATEMENT, THE METHOD RECOGNIZED TO ACCOU NT FOR REVENUE AND EXPENDITURE HAS BEEN GIVEN IN SCHEDULE- 11 OF SIGNIFICANT ACCOUNTING POLICIES AND NOTES TO THE AC COUNTS. ACCOUNTING POLICY (E) WITH REGARD TO REVENUE RECOGN ITION IS REPRODUCED HEREINUNDER: NOTE (E) 'SHANDONG TIEJUN ELECTRIC POWER ENG. CO. LTD IS FOLLOWING THE 'PERCENTAGE OF COMPLETION METHOD' OF ACCOUNTING FOR THE PROJECT AS PER ACCOUNTING STANDA RD 7(REVISED) CONSTRUCTION CONTRACTS. ACCORDINGLY. PRO JECT REVENUE IS RECOGNIZED AS UNDER: THE COMPANY HAS FIXED PRICE CONSTRUCTION CONTRACT W ITH ADANI POWER LIMITED AND JHAJAR POWER LIMITED THE COMPANY STARTED RECOGNIZING REVENUE IN THE FINANCIA L YEAR 2007-2008 AS THE OUTCOME OF THE CONTRACT CAN BE EST IMATED RELIABLY. CONTRACT REVENUE AND EXPENSES ARE RECOGNI ZED AS REVENUE AND EXPENSES ARE RECOGNIZED AND EXPENSES UPTO THE STAGE OF COMPLETION AS ON 31.03.2009 THE MANAGE MENT HAS ESTIMATED COST FOR THE ENTIRE CONTRACT AND WORK ED OUT PERCENTAGE OF COMPLETION FOR EACH YEAR ON THE BASIS OF COST INCURRED AS PER AUDITED ACCOUNTS. ACCORDINGLY, REVENUE IS RECOGNIZED ON THE BASIS OF AUDITED CORRESPONDING PERCENTAGE TO COST ESTIMATES GIVEN BY THE MANAGEMENT FOR THE ENTIRE PROJECT PERIOD TILL DATE IE. 31.03.2009 AS PER AUDITED ACCOUNTS. DETERMINATION O F REVENUES UNDER THE PERCENTAGE OF COMPLETION METHOD AND PROVISION FOR LOSS NECESSARILY INVOLVES MAKING ESTI MATES OF COSTS TO BE INCURRED BY THE MANAGEMENT, WHICH IS BE ING OF TECHNICAL NATURE HAVE BEEN RELIED UPON BY THE AUDIT ORS. THE DIFFERENCE BETWEEN BILLED REVENUE AND WORKING B ELOW IS ACCOUNTED AS UNBILLED CONTRACT REVENUE DUE. E) THE AO DURING THE COURSE OF ASSESSMENT PROCEEDIN GS ASKED THE APPELLANT TO FURNISH BASIS OF ESTIMATING BUDGETED COST. IN THIS CONNECTION, THE APPELLANT VI DE LETTERS DATED 21/12/2011 AND 29/12/2011 SUBMITTED T O THE AO THAT THE MANAGEMENT HAS ESTIMATED TOTAL COST OF THE PROJECT HAVING REGARD TO THE EXPERIENCE IN EXECUTIN G THE CONTRACTS, TENDERS AND QUOTATIONS FROM VARIOUS VEND ORS AND SUB CONTRACTORS. THE APPELLANT FURTHER SUBMITTE D DETAILED BREAK-UP OF THE ESTIMATED PROFIT & LOSS AC COUNT FOR ENTIRE PROJECT FOR FIVE FINANCIAL YEARS 2007-08 TO 2011- 12. THE APPELLANT FURTHER SUBMITTED TO THE AO THAT WHILE OBTAINING ORDER U/S 197 OF THE ACT, THE APPELLANT H AS BEEN SUBMITTING THE DETAILS OF BUDGETED COST TO THE TAX THE OFFICE, WHICH HAVE ALREADY BEEN ACCEPTED BY THE DEPARTMENT. THE APPELLANT ALSO PLACED ON RECORD THE AUDITED FINANCIAL STATEMENTS FOR F.YS 2009-10 AND 2 010 11 AND SUBMITTED AND CLAIMED THAT FROM THE PERUSAL OF SUCH ITA NOS. 80, 81 & 82/AHD/18 [DCIT VS. M/S. SHANDONG TIEJUN ELECTRIC POWER ENGINEERING CO. LTD.] A.Y. 2011-12 T O 2013-14 - 7 - FINANCIAL STATEMENTS, IT IS ESTABLISHED THAT THE AP PELLANT HAS ACTUALLY INCURRED THE COST AS ESTIMATED. F) ONE OF THE OBJECTIONS OF THE AO IS THAT THE AP PELLANT OUGHT TO HAVE FOLLOWED ANOTHER METHOD OF STAGE OF COMPLET ION OF THE PROJECT I.E. (C) COMPLETION OF A PHYSICAL PROPO RTION OF THE CONTRACT WORK. THE AO HAS FURTHER OBSERVED THAT AS PER ANNEXURE 3 OF THE CONTRACT ENTERED INTO BY THE APPELLANT WITH ADANI POWER LTD, THE PAYMENT TO THE APPELLANT SHALL BE RELEASED ON THE BASIS OF MILESTO NES PRESCRIBED IN ANNEXURE 3, AND TILL THE REPORTING DA TE, THE APPELLANT HAS RAISED INVOICES OF RS.L30,86,91,429 W HICH SHOWS THAT PHYSICAL WORK OF THE CONTRACT IS COMPLET ED TO THAT EXTENT ONLY. THEREFORE, AO WAS OF THE VIEW THA T THE APPELLANT OUGHT TO HAVE FOLLOWED METHOD (C) COMPLET ION OF A PHYSICAL PROPORTION OF THE CONTRACT WORK AS PRESC RIBED IN PARA 29 OF AS 7, AND ACCORDINGLY, THE DIFFERENCE BETWEEN THE ACTUAL EXPENDITURE INCURRED IE. RS.211,41,21,308 AND THE INVOICES RAISED IE. RS 130,86,91,429/TO ADANI POWER LTD, FOR PHYSICAL WORK PERFORMED, OUGHT TO HAVE BEEN REFLECTED IN ACCOUNTS AS WORK IN PROGRESS, THE INVOICES FOR WHICH SHOULD BE RAISED IN THE NEXT ACCOUNTING YEAR. THE AO FAILED TO REALI ZE THAT THIS WOULD HAVE RESULTED IN MUCH LESSER REVENUE BEI NG RECOGNIZED IN THE YEAR UNDER APPEAL AND MOST PROBAB LY NET LOSS BEING REPORTED. NOW, TO SUM UP, BOOKS OF ACCOUNT HAVE BEEN MAINTAIN ED AND PRODUCED, THE ACCOUNTS HAVE BEEN SUBJECTED TO A UDIT AS REQUIRED, AND THE APPELLANT HAS FINALISED THE AN NUAL ACCOUNTS, ON THE BASIS OF PERCENTAGE COMPLETION MET HOD BASED ON TOTAL ESTIMATED COST. AS FAR AS THE ESTIMA TED COST OF PROJECT CONCERNED, I AGREE WITH THE APPELLANT TH AT THE ASSESSE HAVING EXPERIENCE IN THE FIELD OF WORK AND WHO IS TAKING THE CONTRACT IS NORMALLY THE BEST JUDGE. THE ONLY FOUL PLAY SUSPECTED IN ESTIMATION CAN BE TO INITIAL LY SHOW VERY HIGH ESTIMATED COST OF COMPLETION SO THAT IT M AY LEAD TO DEFERMENT OF TAX. IN THE PRESENT CASE, I FIND TH AT THE FIGURES OF 3 YEARS WERE MADE AVAILABLE TO THE AO AT THE ASSESSMENT STAGE ITSELF. THERE IS NO BIG DIFFERENCE IN ESTIMATED COST AND PROFIT PERCENTAGE DECLARED FROM YEAR TO YEAR. THERE IS NO REASON THEREFORE TO SUSPECT THAT THE FIGURES OF ESTIMATED COST WERE DELIBERATELY TINKERE D WITH. IN FACT THE PROJECT HAS BEEN COMPLETED IN 2012 ITSE LF AND IT IS NOT THE CASE THAT IT IS A LONG DRAWN PROJECT WHE RE UNDUE DEFERMENT OF TAX WAS THE MOTIVE. THE AO'S REMARK TH AT STAGE OF COMPLETION IS A BETTER METHOD IS NOT UNIVE RSALLY APPLICABLE. THAT IS WHY DIFFERENT METHODS INCLUDING THE PERCENTAGE OF TOTAL ESTIMATED COST APPLIED BY THE A PPELLANT HAVE BEEN SUGGESTED IN THE ACCOUNTING STANDARDS. TH E MILESTONE METHOD OR THE STAGE OF COMPLETION METHOD CAN BE VERY INAPPROPRIATE WHERE THE CONTRACTOR AND CONT RACTEE AGREE FOR TERMS OF PAYMENT MUCH DIFFERENT FROM THE ACTUAL STAGE OF WORK (COST OF WORK COMPLETED) IN SOME CASE S THE CONTRACTEE WHO BECOMES VERY DEPENDENT ON THE CONTRA CTOR ITA NOS. 80, 81 & 82/AHD/18 [DCIT VS. M/S. SHANDONG TIEJUN ELECTRIC POWER ENGINEERING CO. LTD.] A.Y. 2011-12 T O 2013-14 - 8 - FOR COMPLETION OF WORK ONCE THE WORK IS GIVEN AND S TARTED WOULD LIKE TO RETAIN SUBSTANTIAL PORTION OF PAYMENT TILL COMPLETION AS A GUARANTEE FOR THE CONTRACTOR BEING FORCED TO COMPLETE THE WORK. IN OTHER CASES, THE CONTRACTO R MAY HAVE CAPITAL DEFICIENCY/REQUIRE HEAVY MACHINERY TO BE PURCHASED ETC. AND MAY BARGAIN FOR UPFRONT HEAVY PAYMENTS AT INITIAL STAGES. IN BOTH THESE CASES, RECOGNIZING REVENUE ON COMPLETION OF CERTAIN STAGES ACCORDING TO PAYMENT TERMS OR RAISING OF BILLS CANN OT BE THE BEST METHOD. I DO NOT FIND ANY WRONG IN THE MET HOD ADOPTED BY THE APPELLANT. AS OBSERVED EARLIER, THER E IS NO BIG DIFFERENCE ESTIMATED COST AND PROFIT PERCENTAGE DECLARED FROM YEAR TO YEAR. THE EXPENSES HAVE BEEN AUDITED AND NO SUBSTANTIVE DEFECT HAS BEEN DISCOVERED/POINTED OUT. THE REJECTION OF BOOKS OF A CCOUNTS U/S 145 (3) IS NOT HELD JUSTIFIED THESE CIRCUMSTANC ES. I HAVE NOTED THAT THE JURISDICTIONAL GUJARAT HIGH COU RT DECISION IN THE CASE OF CIT VS. ADVANCED CONSTRUCTI ON CO. (P) LTD REPORTED IN 275 ITR 30, WHEREIN IT HAS BEEN HELD THAT THE PROVISION, THEREFORE SPECIFICALLY PROVIDES THAT THE CHOICE OF METHOD OF ACCOUNTING LIES WITH THE ASSESS EE, THE ONLY CAVEAT BEING THAT IT HAS TO SHOW THAT THE CHOS EN METHOD HAS BEEN REGULARLY FOLLOWED. THE SECTION IS COUCHED IN MANDATORY TERMS AND THE DEPARTMENT IS BO UND TO ACCEPT THE ASSESSEE'S CHOICE OF METHOD AND REGUL ARLY EMPLOYED, EXCEPT FOR THE SITUATION, WHEREIN THE ASS ESSING OFFICER IS PERMITTED TO INTERVENE, IN CASE IT IS FO UND THAT TRUE INCOME, PROFITS AND GAINS CANNOT BE ARRIVED AT BY THE METHOD EMPLOYED BY THE ASSESSEE. IN THE PRESENT CAS E, THE TRIBUNAL HAS CATEGORICALLY FOUND THAT 'THE ASSESSEE HAS FOLLOWED THE STANDARD ACCOUNTING METHOD AS THIS BEI NG THE FIRST YEAR OF THE BUSINESS IT WAS THE SOLE CHOICE O F THE ASSESSEE TO ADOPT A PARTICULAR METHOD OF ACCOUNTING CONTEMPLATED UNDER SECTION 145 OF THE ACT' 9. THE THEN LD CIT(A), GANDHINAGAR HAS, IN HIS ORDE R FOR A.Y.2010- 11 IN APPEAL NO. CIT(A)GNR/46/INTL TAXN/2013-14 DAT ED 28/08/2014 HAS FOLLOWED THE ORDER OF HIS PREDECESSO R AND REPRODUCED THE ABOVE-MENTIONED FINDING IN HIS ORDER . TO AVOID DUPLICATION, THE FINDING IN THE ORDER OF LD CIT(A) FOR A.Y.2010- 11 IS NOT REPRODUCED HERE. 10. DURING THE COURSE OF THE APPELLATE PROCEEDINGS, THE APPELLANT FURTHER SUBMITTED THAT THE ORDER OF C1T(A) FOR LEAD MATTER I.E. A.Y.2009-10 HAS BEEN CONFIRMED BY THE ITAT IN ITA NO.1707/AHD/2013 DATED 18/01/2017. THE HON'BLE ITAT HAS HELD AS UNDER :- 'IN VIEW OF FOREGOING, WE, THEREFORE, UPHOLD THE FI NDINGS OF ID. CIT(A) THAT THE ASSESSES FULFILLED ALL CONDITIONS P RESCRIBED U/S 44BBB(2) OF THE IT ACT AND ALSO HAS FOLLOWED ONE OF THE RECOGNIZED METHODS PRESCRIBED FOR DETERMINATION OF STAGE OF COMPLETION OF CONTRACT AS PRESCRIBED IN PARA 29 OF THE ACCOUNTING STANDARD- 7 'CONSTRUCTION CONTRACTS ' AS RECOGNIZED BY THE ICAI AND THE CENTRAL GOVERNMENT. ASSESSEE HA S FOLLOWED ITA NOS. 80, 81 & 82/AHD/18 [DCIT VS. M/S. SHANDONG TIEJUN ELECTRIC POWER ENGINEERING CO. LTD.] A.Y. 2011-12 T O 2013-14 - 9 - CORRECT METHOD OF ACCOUNTING IN TERMS OF SECTION 44 BBB(2) READ WITH SECTION 145(1) & (2) OF THE IT ACT. CONSEQUENT LY WE HOLD THAT THE ID. AO'S ACTION OF REJECTING BOOKS OF ACCO UNTS IN TERMS OF SECTION 145(3) OF THE IT ACT AND ASSESSING INCOM E U/S 44BBB(1) OF THE IT ACT. ON PRESUMPTIVE BASIS IS NOT JUSTIFIED, THE ORDER OF ID. C1T(A) IS UPHELD. OUR VIEW IS FORTIFIE D BY DELHI 1TATJUDGMENT IN THE CASE OF ROYAL JORDANIAN AIRLINE S (SUPRA) WHICH AFTER DWELLING OVER ALL RELEVANT ASPECTS OF C HARGING AND MECHANICAL PROVISIONS, STATUTORY MANDATE, AND JURIS PRUDENCE OF REGULAR ASSESSMENT VIS-A-VIS PRESUMPTIVE ASSESSMENT AND CATENA OF JUDICIAL PRECEDENTS AS DETAILED IN THIS ORDER. ' 11. THE APPELLANT HAS FURTHER CONTENDED BEFORE ME THAT THE AFORESAID ORDER OF THE TRIBUNAL WAS CHALLENGED BY THE DEPARTM ENT BEFORE THE HON'BLE GUJARAT HIGH COURT BY FILING APPEAL IN TAX APPEAL NO.623 OF 2017; HOWEVER, THE SAME HAS BEEN DISMISSE D BY THE HON'BLE GUJARAT HIGH COURT ON 18/09/2017. THE HON'B LE GUJARAT HIGH COURT HAS HELD AS UNDER : '6. UNDER SUB-SECTION (I) OF SECTION 44BBB OF THE A CT THEREFORE IN CASE OF ASSESSEE BEING A FOREIGN COMPA NY ENGAGED IN THE BUSINESS OF CIVIL CONSTRUCTION OR BU SINESS OF ERECTION OF PLANT OR MACHINERY OR TESTING OR COMMISSIONING THEREOF IN CONNECTION WITH A TURNKEY POWER PROJECT APPROVED BY THE CENTRAL GOVERNMENT WOULD BE TAXED AT THE RATE OF 10% OF THE AMOUNT PAID OR PAYA BLE TO THE ASSESSEE OR TO ANY PERSON ON BEHALF OF THE ASSE SSEE ON ACCOUNT OF SUCH CIVIL CONSTRUCTION, ERECTION ETC WO RK. SUB- SECTION (2) OF SECTION 44BBB OF THE ACT WOULD HOWEV ER GIVE AN OPTION TO THE ASSESSEE TO CLAIM LOWER PROFI T IF THE ASSESSEE KEEPS AND MAINTAINS THE BOOKS OF ACCOUNTS AND OTHER DOCUMENTS AS PROVIDED IN SUBSECTION (2) OF SE CTION 44AA OF THE ACT AND GETS THE ACCOUNTS AUDITED AND FURNISHES THE AUDIT REPORT AS REQUIRED UNDER SECTIO N 44AB. THE AO THEREUPON WOULD FRAME AN ASSESSMENT OF THE T OTAL INCOME OF THE ASSESSEE UNDER SUB SECTION (3) OF SEC TION 143 OF THE ACT. IN THE PRESENT CASE, THE CIT (APPEA LS) AS WELL AS THE TRIBUNAL BOTH HELD THAT THE ASSESSEE HA D FULFILLED ALL REQUIREMENTS OF SUB-SECTION (2) OF SE CTION 44BBB OF THE ACT. IT IS NOT THE CASE OF THE REVENUE THAT THE ASSESSEE HAD NOT MAINTAINED THE BOOKS OF ACCOUNTS A ND DOCUMENTS AS REQUIRED UNDER SUB-SECTION (2) OF SECT ION 44AA OR THAT THE ASSESSEE'S ACCOUNTS WERE NOT AUDIT ED OR THE AUDIT REPORT NOT FURNISHED BEFORE THE ASSESSING OFFICER. THE COMMISSIONER AND THE TRIBUNAL ALSO HEL D THAT THE ASSESSING OFFICER WAS WRONG IN HOLDING THAT THE ACCOUNTING STANDARD AS- 7 DID NOT APPLY TO THE ASSE SSEE. 7. SUCH BEING THE FACTS, WE SEE NO REASON SO INTERF ERE SINCE NO QUESTION OF LAW ARISES. LEARNED COUNSEL FO R THE REVENUE, HOWEVER, STRENUOUSLY URGED THAT THE ASSESS ING OFFICER WAS AUTHORISED TO EXAMINE THE BOOKS OF ACCO UNTS AND OTHER DOCUMENTS AND IF FOUND THAT THE ASSESSEE HAD NOT RECORDED THE DETAILS CORRECTLY HE COULD HAVE RE JECTED SUCH ACCOUNTS. WE MAY NOT DISPUTE THIS PROPOSITION. ITA NOS. 80, 81 & 82/AHD/18 [DCIT VS. M/S. SHANDONG TIEJUN ELECTRIC POWER ENGINEERING CO. LTD.] A.Y. 2011-12 T O 2013-14 - 10 - HOWEVER, THE ASSESSING OFFICER, AS RECORDED BY THE TRIBUNAL HAS NOT FOUND ANY MAJOR DEFECTS IN SUCH ACCOUNTS. THE COMMISSIONER (APPEALS) IN FACT ELABOR ATED THAT THE ASSESSES HAD THE PAST EXPERIENCE FROM WHIC H IT COULD ESTIMATE THE TOTAL COST AND HAD PRESENTED FIG URES TO SHOW THE PERCENTAGE COMPLETION OF THE PROJECT. THES E FIGURES MATCH WITH THE ACTUAL INCOME AND EXPENDITUR E STATEMENTS OF THE SUBSEQUENT FINANCIAL YEARS. IN FA CT THE ENTIRE PROJECT WAS COMPLETED BY THE TIME THE COMMISSIONER (APPEALS) DECIDED THE APPEAL. 8. IN TH E RESULT, TAX APPEAL IS DISMISSED, ' 12. THEREFORE, RESPECTFULLY FOLLOWING THE ORDERS OF HON'BLE GUJARAT HIGH COURT IN THE CASE OF THE APPELLANT ITSELF FOR A.Y.2009-10, AS WELL THE ORDER OF HON'BLE ITAT, IT IS HELD THAT THE ACTION OF LD AO IN REJECTING BOOKS OF ACCOUNTS OF THE APPELLANT AND ESTIMATING INCOME AT RS.103,02,46,617/ IS NOT SUSTA INABLE. I FURTHER HOLD THAT THE APPELLANT HAS RIGHTLY AND LEG ITIMATELY OFFERED INCOME U/S 44BBB(2) OF THE ACT. I FURTHER R EJECT THE ACTION OF LD AO IN MAKING ALTERNATIVE ADDITION U/S 44BBB(1) OF THE ACT. 13. IN VIEW OF ABOVE, THE ADDITION MADE BY THE AO B Y REJECTING THE BOOKS OF ACCOUNTS AND ESTIMATING THE INCOME U/S 44B BB(1) OF THE ACT AS WELL AS ON THE BASIS OF COMPARABLE COMPANIES ARE HEREBY DELETED. ACCORDINGLY, GROUNDS NOS. 1 TO 5 AS RAISED BY THE APPELLANT IN THE GROUNDS OF APPEAL ARE ALLOWED. IN VIEW OF THE ABOVE, FOLLOWING THE ABOVE JUDICIAL PRECEDENTS IN THE CASE OF ASSESSEE ITSELF, GROUND NOS. 1 & 2 OF THE R EVENUE ARE DISMISSED. 8. GROUND NOS. 3, 4 & 5 ARE INTERCONNECTED AND ARE CONSEQUENT TO GROUND NO.2. THE LEARNED CIT(A) HAS DEALT THIS ISS UE FROM PARA 19 TO 27 WHEREIN HE HAS DEALT WITH THE ISSUES RAISED B Y A.O. AND HAS DECIDED IN FAVOUR OF ASSESSEE BY RELYING ON THE DEC ISIONS OF HONBLE TRIBUNAL AND HONBLE GUJARAT HIGH COURT IN THE CASE OF ASSESSEE ITSELF. 9. WE FIND THAT HONBLE TRIBUNAL IN THE CASE OF ASS ESSEE ITSELF IN AY 2010-11 HAS DISMISSED THE APPEAL OF THE REVENUE WHEREIN THE REVENUE HAS TAKEN SIMILAR GROUNDS OF APPEAL REPRODU CED AS FOLLOWS: 'I) THE LD. CIT(A) ERRED IN LAW AND ON FACTS IN HOL DING THAT THE ACTION OF THE AO IN REJECTING THE BOOKS OF ACCOUNT OF THE ASSESSEE ITA NOS. 80, 81 & 82/AHD/18 [DCIT VS. M/S. SHANDONG TIEJUN ELECTRIC POWER ENGINEERING CO. LTD.] A.Y. 2011-12 T O 2013-14 - 11 - COMPANY WAS INCORRECT INSPIRE OF CLEAR EVIDENCE BRO UGHT ON RECORD THAT THE PROFIT COMPUTED BY THE ASSESSEE WAS NOT RELIABL E. II) THE LD. CIT(A) ERRED IN LAW AND ON FACTS IN HOL DING THAT THE ACTION OF THE AO IN RESORTING TO ESTIMATION OF INCO ME ON PRESUMPTIVE BASIS AT 10% U/S 44BBB(1) OR ALTERNATELY @ 11.79% U NDER NORMAL PROVISIONS OF THE ACT WAS NOT CORRECT. III) THE LD. CIT(A) ERRED IN HOLDING THAT IN THE PR ESENT FACTS AND CIRCUMSTANCES, CUP WAS A BETTER METHOD FOR BENCHMAR KING AS AGAINST TNMM ADOPTED BY THE TPO. IV) THE LD. CIT(A) ERRED IN HOLDING THAT THE TRANSA CTION OF AWARDING OF CONTRACT BY ADANI POWER LIMITED AND JHAJJAR POWE R LIMITED TO SHANDONG HO IS A PROPER CUP FOR THE TRANSACTION BET WEEN SHANDONG HO AND SHANDONG PE WITHOUT APPRECIATING THAT THE NA TURE OF TRANSACTION BETWEEN SHANDONG HO AND SHANDONG PE WAS FUNCTIONALLY DIFFERENT AND COULD NOT BE COMPARED WITH THE TRANSA CTION BETWEEN APL/JPL AND SHANDONG HO WHICH MERELY RELATED TO AWA RDING OF CONTRACT. V) THE LD. CIT(A) ERRED IN LAW AND ON FACTS IN HOLD ING THAT THE COMPARABLES SELECTED BY THE TPO WERE FUNCTIONALLY I NCOMPARABLE WITHOUT ASSIGNING ANY REASON WHATSOEVER. VI) THEREFORE THE ORDER OF THE LD. CIT(A) DESERVES TO BE DELETED AND THAT THE ORDER OF ASSESSING OFFICER BE RESTORED.' 10. SUCH GROUNDS OF APPEAL HAVE BEEN DISPOSED OF BY THE HONBLE TRIBUNAL FROM PARA 15 ONWARDS AND HONBLE TRIBUNAL HAS HELD IN FAVOUR OF THE ASSESSEE BY HOLDING AS UNDER: 15. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSE D THE RECORD PLACED BEFORE US. SO FAR AS THE ISSUE THAT WHETHER THE TRANSFER PRICING PROVISIONS ARE APPLICABLE ON THE TRANSACTIONS BETWE EN THE SHANDONG HO AND SHANDONG PROJECT OFFICE IN INDIA, WE FIND NO INFIRMITY IN THE FINDINGS OF THE LEARNED CIT(A) THAT THE TRANSACTION S BETWEEN BOTH THE ENTITIES ARE DEEMED INTERNATIONAL TRANSACTIONS AND THE TRANSFER PRICING PROVISIONS ARE APPLICABLE BETWEEN THE FOREIGN COMPA NY I.E. HO AND ITS PE, BY OBSERVING AS FOLLOWS:- '7.5.2 I AM UNABLE TO AGREE WITH THE CONTENTIONS OF THE APPELLANT THAT THE TRANSACTIONS BETWEEN HEAD OFFICE OF THE AP PELLANT COMPANY AND ITS PE IN INDIA NEED NOT BE CONSIDERED AS INTERNATIONAL TRANSACTION. I FIND THAT THE PROJECT OFFICE OF THE APPELLANT COMPANY AND ITS HEAD OFFICE ARE ASSOCIATE D ENTERPRISES ('AES') AS PER THE PROVISIONS OF THE SECTION 92A(1) (A) FOR THE SIMPLE REASON THAT THE PO IS A SEPARATE TAXABLE ENT ITY AND THE SAME IS MANAGED BY HO, CONTROLLED BY HO AND EVEN TH E CAPITAL CONTRIBUTION ALSO COMES FROM HO. MOREOVER ARTICLE 9 OF THE INDIA-CHINA DTAA ALSO STIPULATES THAT THE HO AND TH E PO OF THE ITA NOS. 80, 81 & 82/AHD/18 [DCIT VS. M/S. SHANDONG TIEJUN ELECTRIC POWER ENGINEERING CO. LTD.] A.Y. 2011-12 T O 2013-14 - 12 - APPELLANT COMPANY ARE AES BECAUSE THE HEAD OFFICE P ARTICIPATED DIRECTLY IN THE MANAGEMENT CONTROL AND CAPITAL OF T HE PROJECT OFFICE. ONCE IT IS HELD THAT PO AND HO ARE AE, I FU RTHER FIND THAT ARTICLE 7(2) OF THE INDIA-CHINA DTA A AND PARA 15, 16 & 17 OF THE COMMENTARY ON ARTICLE 7 ON MODEL TAX CONVENTION PUBLISHED BY OECD IN 2010 ALSO STATES THAT PERMANENT ESTABLIS HMENT IS TO BE TREATED AS A FUNCTIONALLY SEPARATE ENTITY. ACCOR DINGLY, THE PROFITS TO THE PE SHALL HAVE TO BE ATTRIBUTED AT AR M'S LENGTH PRICE. IN THE FACTS OF THE PRESENT CASE SINCE THE A E (HO) ENTERED INTO AN AGREEMENT WITH APL AND JPL TO EXECUTE THE C ONTRACT OF POWER PROJECT FOR2 APL AND JPL. THE APPELLANT BEING THE PO IS EXECUTING THE PROJECT UNDER THE DELEGATION OF RESPO NSIBILITIES BY THE HO. THEREFORE, SUCH DELEGATION OF RESPONSIBILIT Y BY THE HEAD OFFICE IS REQUIRED TO BE CONSIDERED AS AN INTERNATI ONAL TRANSACTION BETWEEN APPELLANT AND HO OF THE APPELLA NT. SINCE THERE EXISTED A PRIOR AGREEMENT IN RELATION TO THE TRANSACTION BETWEEN THE HO AND APL AND JPL, THE TRANSACTION BET WEEN APPELLANT AND APL AND JPL IS A DEEMED INTERNATIONAL TRANSACTION U/S. 92B(2). ACCORDINGLY, IT IS HELD TH AT THE TPO IS JUSTIFIED IN HOLDING THE TRANSACTIONS BETWEEN THE A PPELLANT AND ITS HEAD OFFICE AS INTERNATIONAL TRANSACTION. FURTHER IT IS IMPORTANT TO NOTE HERE THAT SECTION 9 2F (III) DEFINES ENTERPRISE AS A PERSON INCLUDING A PERMANENT ESTABL ISHMENT OF SUCH PERSON. A PERMANENT ESTABLISHMENT HAS BEEN DEF INED U/S 92F(IIIA) AS A FIXED PLACE OF BUSINESS THROUGH WHIC H THE BUSINESS OF THE ENTERPRISE IS CARRIED ON. ACCORDINGLY, THE A CT ITSELF CONSIDERS A PERMANENT ESTABLISHMENT AS AN ENTERPRIS E. THEREFORE, ALL THE DEALINGS BETWEEN THE ENTERPRISE AND ITS PERMANENT ESTABLISHMENT IN INDIA HAVE TO PASS THE T EST OF TRANSFER PRICING. IN THE GIVEN CASE, THE TRANSACTIO N HAVE TAKEN PLACE BETWEEN THE FOREIGN COMPANY I.E. HEAD OFFICE AND ITS PE IN INDIA I.E. PROJECT OFFICE IN INDIA AND THEREFORE TH E CONTENTION OF THE APPELLANT THAT THE TRANSFER PRICING PROVISIONS ARE NOT APPLICABLE TO IT IS INCORRECT AS PROJECT OFFICE. TH IS FINDING ALSO GETS SUPPORT FROM THE VITAL FACT THAT THE APPELLANT COMPANY HAS ITSELF FILED REPORT UNDER FORM 3 CEB WHEREIN TRANSA CTIONS BETWEEN ITSELF I.E. THE PO AND ITS HEAD OFFICE IN C HINA IS REPORTED. ACCORDINGLY, I HOLD THAT THE TRANSFER PRICING PROVI SIONS ARE APPLICABLE WHERE TRANSACTIONS HAVE TAKEN PLACE BETW EEN THE FOREIGN COMPANY I.E. HO AND ITS PE IN INDIA I.E. PO .' 16. FURTHER COMING TO THE ISSUE OF APPLICATION OF M ETHOD FOR CALCULATING THE ARM'S LENGTH PRICE, WE FIND THAT TH E ASSESSING OFFICER APPLIED THE TNMM METHOD; WHEREAS, THE LEARNED CIT(A ) HAS HELD THAT THE CUP METHOD IS MOST APPROPRIATE METHOD. LEARNED CIT(A), WHILE DECIDING THAT THE CUP METHOD IS THE MOST APPROPRIAT E METHOD, AS PLEADED BY THE ASSESSEE, OBSERVED FOLLOWING FINDING S:- '8. AS MENTIONED ABOVE, THE APPELLANT COMPANY HAS ALTERNATIVELY SUBMITTED THAT THE AO OUGHT TO HAVE S ELECTED CUP AS MOST APPROPRIATE METHOD OVER TNMM IN VIEW OF AVA ILABILITY OF CUP OF APL & 3PL TRANSACTION WITH HO OF THE APPE LLANT ITA NOS. 80, 81 & 82/AHD/18 [DCIT VS. M/S. SHANDONG TIEJUN ELECTRIC POWER ENGINEERING CO. LTD.] A.Y. 2011-12 T O 2013-14 - 13 - COMPANY MORE SO WHEN THE TRANSACTIONS ARE FUNCTIONA LLY COMPARABLE. I HAVE ALSO PERUSED JUDICIAL PRONOUNCEM ENTS CITED BY THE APPELLANT COMPANY TO CONTEND THAT WHERE CUP IS AVAILABLE, CUP METHOD SHOULD BE FOLLOWED IN PREFERE NCE TO OTHER METHODS FOR DETERMINATION OF THE ALP. I FIND FORCE IN THE CONTENTION OF THE APPELLANT COMPANY THAT CUP IS THE MOST APPROPRIATE METHOD FOR DETERMINING ALP IN THE GIVEN SET OF FACTS IN VIEW OF AVAILABILITY OF CUP OF APL & JPL WITH HO . FURTHER, I HOLD THAT TRANSACTION OF APL & JPL WITH HO OF THE A PPELLANT CAN BE TREATED AS CUP BEING FUNCTIONALLY COMPARABLE UNC ONTROLLED TRANSACTIONS IN TERMS OF RULE 10B(2) & (3) OF THE I T RULES AND MORE PARTICULARLY IN VIEW OF THE FACT THAT ENTIRE I NCOME FROM THE TRANSACTION IS OFFERED FOR TAX IN INDIA. ACCORDINGLY, I HOLD THAT ON THIS COUNT ALSO THE TRA NSFER PRICING ADDITION IS UNSUSTAINABLE AND IS HEREBY DELETED.' 17. LEARNED CIT(A) FURTHER OBSERVED THAT THE TRANSF ER PRICING ADDITION WAS INCORRECTLY MADE BY SELECTING FUNCTIONALLY INCO MPARABLE TRANSACTIONS BY OBSERVING AS FOLLOWS:- '10. I HAVE PERUSED THE ABOVE SUBMISSION OF THE APP ELLANT COMPANY. THE APPELLANT HAS POINTED OUT VARIOUS SHOR TCOMINGS IN -APPLICATION OF FILTER WHILE SELECTING COMPARABLE C OMPANIES AND ALSO EMPHASIZED THAT THE COMPARABLE TRANSACTIONS SE LECTED BY THE AO FOR BENCHMARKING THE DEEMED INTERNATIONAL TRANSA CTIONS FOR DETERMINING ALP ARE NOT COMPARABLE UNCONTROLLED TRA NSACTIONS IN TERMS OF RULE 10B & RULE 10C OF THE IT RULES R.W SECTION 92C OF THE IT ACT. ALSO I HAVE PERUSED THE SUBMISSION F ILED VIDE PAGE NO 60 TO 80 OF THE PAPER BOOK MORE PARTICULARLY DET AILED INFORMATION OF THE SAID COMPARABLES PROVIDED VIDE P AGE NOS 81 TO 146 OF THE PAPER BOOK. FURTHER, I HAVE PERUSED T HE INFORMATION ABOUT 10 COMPARABLE COMPANIES PROVIDED VIDE ABOVE REFERRED SUBMISSION DATED 1ST AUGUST, 2014. I HAVE FOUND THAT THE COMPARABLES SELECTED BY THE AO ARE NOT COMPARABLE I N VIEW OF FUNCTIONAL COMPATIBILITY OF THE SAID TRANSACTIONS, ABSENCE OF SEGMENT INFORMATION FOR INDIVIDUAL LINE OF BUSINESS IN CASE OF THOSE COMPARABLES WHICH ARE ENGAGED IN VARIOUS LINE OF BUSINESS AND GENERALIZED FILTER APPLIED FOR SELECTION OF COM PARABLES. ACCORDINGLY, I HOLD THAT THE TRANSFER PRICING ADDIT ION IS INCORRECTLY MADE BY SELECTING FUNCTIONALLY INCOMPAR ABLE TRANSACTIONS AND IS THEREFORE DELETED.' 18. WE FURTHER FIND THAT THE TRANSACTIONS OF AWARDI NG CONTRACT BY APL AND JPL-INDIAN PARTIES TO SHANDONG HO- A CHINES E ENTITY, OUGHT TO HAVE BEEN TAKEN AS COMPARABLE UNCONTROLLED TRANS ACTIONS TO BENCHMARK THE TRANSACTIONS OF SHANDONG PO. FOR THE SAKE OF CLARITY, WE REPRODUCE RULE 10C OF THE INCOME-TAX RULES, WHER EIN WITH RESPECT TO SECTION 92C OF THE ACT RELATING TO THE MOST APPR OPRIATE METHOD OF CALCULATING THE ARM'S LENGTH PRICE, WHICH READS AS UNDER:- '10C. (1) FOR THE PURPOSES OF SUB-SECTION (1) OF SE CTION 92C, THE MOST APPROPRIATE METHOD SHALL BE THE METHOD WHICH I S BEST SUITED TO THE FACTS AND CIRCUMSTANCES OF EACH PARTICULAR I NTERNATIONAL ITA NOS. 80, 81 & 82/AHD/18 [DCIT VS. M/S. SHANDONG TIEJUN ELECTRIC POWER ENGINEERING CO. LTD.] A.Y. 2011-12 T O 2013-14 - 14 - TRANSACTION, AND WHICH PROVIDES THE MOST RELIABLE M EASURE OF AN ARM'S LENGTH PRICE IN RELATION TO THE INTERNATIONAL TRANSACTION, AS THE CASE MAY BE. (2) IN SELECTING THE MOST APPROPRIATE METHOD AS SPE CIFIED IN SUB-RULE (1), THE FOLLOWING FACTORS SHALL BE TAKEN INTO ACCOUNT, NAMELY;-- (A) THE NATURE AND CLASS OF THE INTERNATIONAL TRANS ACTION; (B) THE CLASS OR CLASSES OF ASSOCIATED ENTERPRISES ENTERING INTO THE TRANSACTION AND THE FUNCTIONS PERFORMED BY THEM TAKING INTO ACCOUNT ASSETS EMPLOYED OR TO BE EMPLOY ED AND RISKS ASSUMED BY SUCH ENTERPRISES; C) THE AVAILABILITY, COVERAGE AND RELIABILITY OF DA TA NECESSARY FOR APPLICATION OF THE METHOD; (D) THE DEGREE OF COMPARABILITY EXISTING BETWEEN TH E INTERNATIONAL TRANSACTION AND THE UNCONTROLLED TRAN SACTION AND BETWEEN THE ENTERPRISES ENTERING INTO SUCH TRANSACTIONS; (E) THE EXTENT TO WHICH RELIABLE AND ACCURATE ADJUS TMENTS CAN BE MADE TO ACCOUNT FOR DIFFERENCES, IF ANY, BETWEEN THE INTERNATIONAL TRANSACTION AND THE COMPARABLE UNCONT ROLLED TRANSACTION OR BETWEEN THE ENTERPRISES ENTERING INT O SUCH TRANSACTIONS; (F) THE NATURE, EXTENT AND RELIABILITY OF ASSUMPTIO NS REQUIRED TO BE MADE IN APPLICATION OF A METHOD.' 19. IN VIEW OF THE ABOVE PROVISIONS AND EXAMINING T HE FACTS OF THE INSTANT APPEAL, WE FIND THAT THERE IS NO DIFFERENCE IN THE TERMS OF FUNCTIONS PERFORMED, ASSETS EMPLOYED AND RISK UNDER TAKEN, THE PRICE CHARGED, INCOMPARABLE UNCONTROLLED TRANSACTIONS ENT ERED IN THE CONTRACTS BETWEEN THE PARTIES APL & JPL TO SHANDONG HO VIS-A-VIS THE CONTRACT AWARDED TO SHANDONG PO BY THE SHANDONG HO. FURTHER, IT IS ALSO NOT DISPUTED AT THE END OF THE REVENUE T HAT THE PRICE AT WHICH THE CONTRACTS WERE AWARDED BY APL AND JPL- IN DIAN PARTIES - TO SHANDONG HO - CHINESE ENTITY - IS A SAME PRICE AT W HICH TRANSACTIONS PRICE BETWEEN SHANDONG PO, I.E. APPELLANT IN INDIA AND SHANDONG HO, A CHINESE ENTITY, AS AGREED UPON. WHEN THE TOTA L VALUE OF THE CONTRACT AWARDED TO THE CHINESE HO HAS BEEN OFFERED AS GROSS REVENUE BY THE SHANDONG PO, I.E. FOREIGN ENTITY INCORPORATE D IN INDIA, THEN HOW CAN THERE BE ANY SHIFTING OF PROFITS. THIS VIEW FURTHER GETS FORTIFIED IN VIEW OF THE FACT THAT THE ACTION OF TH E ASSESSING OFFICER IN REJECTING THE BOOKS OF ACCOUNTS HAS ALREADY HELD TO BE INVALID, WHICH THEREFORE, SHOWS THAT THE PROFITS HAVE BEEN RIGHTLY SHOWN BY THE ASSESSEE. FOR THE PURPOSE OF COMPUTING ARM'S LENGTH PRICE, THE BASIC THING WHICH IS TO BE EXAMINED THAT WHETHER THE ASSE SSEE HAS SHIFTED THE PROFITS TO ITS ASSOCIATE ENTERPRISES EITHER DIR ECTLY CHARGING LESS REVENUE OR SHOWING EXCESS COST TO REDUCE THE PROFIT S, BUT IN THE INSTANT CASE WHERE THE TOTAL CONTRACT TERMS ARE SIM ILAR BETWEEN THE SHANDONG HO AND PO AS WELL AS BETWEEN THE SHANDONG HO AND TWO INDIAN PARTIES WHICH IS THE FIT COMPARABLE UNCONTRO LLABLE TRANSACTIONS AND THERE BEING NO VARIATION IN THE RATES CHARGED A S WELL AS THE OTHER TERMS OF THE AGREEMENT, THEN THERE REMAINS NO ROOM FOR THE REVENUE AUTHORITIES TO MAKE ANY UPWARD ADJUSTMENT TO MAKE A DDITION IN THE HANDS OF THE ASSESSEE. WE, THEREFORE, IN THE GIVEN FACTS AND CIRCUMSTANCES OF THE CASE ARE OF THE CONSIDERED OPI NION THAT FOR THE ITA NOS. 80, 81 & 82/AHD/18 [DCIT VS. M/S. SHANDONG TIEJUN ELECTRIC POWER ENGINEERING CO. LTD.] A.Y. 2011-12 T O 2013-14 - 15 - PURPOSE OF CALCULATING ARM'S LENGTH PRICE, COMPARAB LE UNCONTROLLABLE PRICE (CUP) METHOD SHOULD HAVE BEEN FOLLOWED BY THE ASSESSING OFFICER TO DETERMINE THE ALP AND WE FURTH ER HOLD THAT IF THE CUP METHOD IS APPLIED, THEN NO TRANSFER PRICING ADJ USTMENT NEEDS TO BE MADE IN THE GIVEN FACTS AND CIRCUMSTANCES OF THE CASE. WE, THEREFORE, FIND NO INFIRMITY IN THE FINDINGS OF THE LEARNED CIT(A) AND WE UPHOLD THE SAME. IN THE RESULT, THIS ISSUE IS AL SO DECIDED AGAINST THE REVENUE AND IN FAVOUR OF THE ASSESSEE. 11. THE ORDER OF THE HONBLE TRIBUNAL HAS BEEN CONF IRMED BY HONBLE GUJARAT HIGH COURT VIDE ORDER DATED 18.10.2 019. THE HONBLE COURT HAD FRAMED THE FOLLOWING QUESTIONS OF LAW: (A) WHETHER IN THE FACTS AND CIRCUMSTANC ES OF THE CASE, THE LEARNED ITAT HAS ERRED IN LAW AND ON FACTS IN HOLDI NG THAT CUP WAS A BETTER METHOD FOR BENCHMARKING AS AGAINST TNMM ADOPTED BY THE TPO? (B) WHETHER IN THE FACTS AND CIRCUMSTANCE S OF THE CASE, THE LEARNED ITAT HAS ERRED IN LAW AND ON FACTS IN HOLDING THAT THE TRANSACTION OF AWARDING OF CONTRACT BY ADANI POWER LIMITED AND JHAJJAR POWER LIMITED TO SHANDONG HO IS A PRO PER CUP FOR THE TRANSACTIONS BETWEEN SHANDONG HO AND SHANDONG PE WI THOUT APPRECIATING THAT THE NATURE OF TRANSACTION BETW EEN SHANDONG HO AND SHANDONG PE WAS FUNCTIONALLY DIFFERENT AND COUL D NOT BE COMPARED BETWEEN APJ/JPL AND SHANDONG HO WHICH MER ELY RELATED TO AWARDING OF A CONTRACT? (C) WHETHER IN THE FACTS AND CIRCUMSTANCE S OF THE CASE, THE LEARNED ITAT HAS ERRED IN LAW AND ON FACTS IN HOLDING THAT THE COMPARABLE SELECTED BY THE TPO WERE FUNCTIONALLY IN COMPARABLE WITHOUT ASSIGNING ANY REASON WHATSOEVER? THE QUESTIONS OF LAW HAVE BEEN ANSWERED IN FAVOUR O F THE ASSESSEE BY HONBLE HIGH COURT FROM PARA 14 TO 18 WHICH FOR THE SAKE OF COMPLETENESS IS REPRODUCED BELOW: 14. RULE 10C OF THE RULES BEARS THE HEADING MOST APPROPRIATE METHOD. SUB-RULE (1) THEREOF PROVIDES THAT FOR THE PURPOSES OF SUB-SECTION (1) OF SECTION 92C OF THE ACT, THE MOST APPROPRIATE METHOD SHALL BE THE METHOD WHICH IS BEST SUITED TO THE FAC TS AND CIRCUMSTANCES OF EACH PARTICULAR INTERNATIONAL TRANSACTION OR SPE CIFIED DOMESTIC TRANSACTION AND WHICH PROVIDES THE MOST RELIABLE ME ASURE OF AN ARMS LENGTH PRICE IN RELATION TO THE INTERNATIONAL TRANS ACTION OR THE SPECIFIED DOMESTIC TRANSACTION AS THE CASE MAY BE. SUB-RULE ( 2) PROVIDES FOR THE ITA NOS. 80, 81 & 82/AHD/18 [DCIT VS. M/S. SHANDONG TIEJUN ELECTRIC POWER ENGINEERING CO. LTD.] A.Y. 2011-12 T O 2013-14 - 16 - FACTORS WHICH ARE REQUIRED TO BE TAKEN INTO A CCOUNT IN SELECTING THE MOST APPROPRIATE METHOD AS SPECIFIED IN SUB-R ULE (1). 15. THE CONTROVERSY INVOLVED IN THE PRESENT CASE IS REQUIRED TO BE EXAMINED IN THE LIGHT OF THE ABOVE STATUTORY PROVIS IONS. WITH THE CUP METHOD, THE PRICE AND CONDITIONS OF THE CONTROLLED TRANSACTION BETWEEN ASSOCIATED ENTERPRISES WITH THE PRICE AND CONDITION S OF THE COMPARABLE UNCONTROLLED TRANSACTION BETWEEN INDEPENDENT ENTERP RISES HAVE TO BE COMPARED. IF THE TWO PRICES ARE THE SAME, THE CONDI TIONS OF THE CONTROLLED TRANSACTION ARE AT ARMS LENGTH AND IF T HE TWO PRICES ARE DIFFERENT, THEN THE CONDITIONS OF THE ORGANIZATION' S COMMERCIAL OR FINANCIAL RELATIONS WITH THE ASSOCIATED ENTERPRISE MAY NOT BE AT ARMS LENGTH. ONE WOULD THEN NEED TO SUBSTITUTE THE PRICE IN THE CONTROLLED TRANSACTION WITH THAT OF A COMPARABLE UNCONTROLLED TRANSACTION TO ASCERTAIN WHAT THE CONDITIONS NEED TO LOOK LIKE TO BE AT ARMS LENGTH. 16. THE TRIBUNAL, IN THE IMPUGNED ORDER HAS FOUND T HAT THE TRANSACTION OF AWARDING CONTRACT BY APL AND JPL, IN DIAN PARTIES, TO SHANDONG HO, A CHINESE ENTITY, OUGHT TO HAVE BEEN T AKEN AS COMPARABLE UNCONTROLLED TRANSACTIONS TO BENCHMARK T HE TRANSACTION OF SHANDONG PO. THE TRIBUNAL HAS PLACED RELIANCE UPON THE PROVISIONS OF RULE 10C OF THE RULES AND IN VIEW THEREOF, FO UND THAT THERE IS NO DIFFERENCE IN THE TERMS OF FUNCTIONS PERFORMED, ASS ETS EMPLOYED, RISKS UNDERTAKEN, THE PRICE CHARGED, IN COMPARABLE UNCONT ROLLED TRANSACTIONS ENTERED IN THE CONTRACTS BETWEEN THE PARTIES - APL AND JPL TO SHANDONG HEAD OFFICE VIS--VIS THE CONTRACT A WARDED TO SHANDONG PROJECT OFFICE BY SHANDONG HEAD OFFICE. THE TRIBU NAL HAS FURTHER NOTED THAT IT IS NOT DISPUTED AT THE END OF THE R EVENUE THAT THE PRICE AT WHICH THE CONTRACTS WERE AWARDED BY APL AND JPL , INDIAN PARTIES, TO SHANDONG HO, CHINESE ENTITY, IS THE SAME PRICE A T WHICH TRANSACTIONS BETWEEN SHANDONG PO, THAT IS, THE A PPELLANT IN INDIA AND SHANDONG HO, THE CHINESE ENTITY, HAD BEEN AGREED UPON. THE TRIBUNAL WAS OF THE VIEW THAT THE TOTAL VALUE OF TH E CONTRACT AWARDED TO THE CHINESE HO HAD BEEN OFFERED AS GROSS REVENUE BY SHANDONG PO, THAT IS, THE FOREIGN ENTITY INCORPORATED IN INDI A AND, THEREFORE, THERE WAS NO QUESTION OF ANY SHIFTING OF PROFITS. THE TRIBUNAL HAS FURTHER NOTED THAT FOR THE PURPOSE OF COMPUTING THE ARMS L ENGTH PRICE, THE BASIC THING WHICH IS TO BE EXAMINED IS WHETHER THE ASSESSEE HAS SHIFTED THE PROFITS TO ITS ASSOCIATE ENTERPRISES EITHER DIR ECTLY OR INDIRECTLY CHARGING LESS REVENUE OR SHOWING EXCESS COST TO RED UCE THE PROFITS, BUT IN THE INSTANT CASE, WHERE THE TOTAL CONTR ACT TERMS ARE SIMILAR BETWEEN SHANDONG HO AND PO AS WELL AS BETWEEN SHANDONG HO AND THE TWO INDIAN PARTIES, WHICH IS THE FIT COM PARABLE UNCONTROLLED TRANSACTION AND THERE BEING NO VARIATI ON IN THE RATES CHARGED AS WELL AS OTHER TERMS OF THE AGREEMENT, TH EN THERE REMAINS NO ROOM FOR THE REVENUE TO MAKE ANY UPWARD ADJUSTMENT TO MAKE ADDITION IN THE HANDS OF THE ASSESSEE. THE TRIBUNAL , IN THE ABOVE FACTS AND CIRCUMSTANCES, WAS OF THE CONSIDERED OPINION TH AT FOR THE PURPOSE OF CALCULATING ARMS LENGTH PRICE, CUP METHOD SHOUL D HAVE BEEN FOLLOWED BY THE ASSESSING OFFICER TO DETERMINE THE ARMS LENGTH PRICE AND FURTHER HELD THAT IF THE CUP METHOD IS APPLIED, THEN NO TRANSFER PRICING ADJUSTMENT NEEDS TO BE MADE IN THE GIV EN FACTS AND CIRCUMSTANCES OF THE CASE. THE TRIBUNAL, ACCORDINGLY, FOUND NO ITA NOS. 80, 81 & 82/AHD/18 [DCIT VS. M/S. SHANDONG TIEJUN ELECTRIC POWER ENGINEERING CO. LTD.] A.Y. 2011-12 T O 2013-14 - 17 - INFIRMITY IN THE FINDINGS RECORDED BY THE COM MISSIONER (APPEALS) AND DECIDED THE QUESTION AGAINST THE REVENUE. 17. IN THE OPINION OF THIS COURT, THE QUESTION AS T O WHICH IS THE MOST APPROPRIATE METHOD FOR DETERMINING THE ARM'S LENGTH PRICE AND AS TO WHETHER THE TRANSACTION BETWEEN APL AND JPL AND SHANDONG HEAD OFFICE IS A COMPARABLE UNCONTROLLED TRANSACTION IS BASICALLY A QUESTION OF FACT. FROM THE CONCURRENT FINDINGS OF FACT RECO RDED BY THE TRIBUNAL AND THE COMMISSIONER (APPEALS) BASED ON THE MATERIA L ON RECORD, IT IS APPARENT THAT THE TERMS OF FUNCTIONS PERFORME D, ASSETS EMPLOYED, RISK UNDERTAKEN, THE PRICE CHARGED IN COMPARABLE UN CONTROLLED TRANSACTIONS ENTERED INTO BY VIRTUE OF THE CONTRACT BETWEEN APL AND JPL AND SHANDONG HO VIS--VIS THE CONTRACT AWARDED TO SHANDONG PO BY SHANDONG HO, ARE IDENTICAL. IT IS BASED UPON SUC H CONCURRENT FINDINGS OF FACT RECORDED BY IT AFTER APPRECIATING THE MATERIAL ON RECORD THAT THE TRIBUNAL HAS ARRIVED AT THE CONCLUS ION THAT THE ARMS LENGTH PRICE OF THE TRANSACTION IN QUESTION IS REQU IRED TO BE COMPUTED BY ADOPTING THE CUP METHOD. THEREFORE, UNLESS THERE IS ANY PERVERSITY IN THE FINDINGS OF FACT RECORDED BY THE TRIBUNAL UPON APPRECIATION OF THE EVIDENCE ON RECORD, NO QUESTION OF LAW CAN BE S AID TO ARISE FROM THE IMPUGNED ORDER. THE LEARNED SENIOR STANDI NG COUNSEL FOR THE APPELLANT IS NOT IN A POSITION TO POINT O UT ANY PERVERSITY IN THE CONCURRENT FINDINGS OF FACT RECORDED BY THE T RIBUNAL AFTER APPRECIATING THE EVIDENCE ON RECORD. IT IS NOT THE CASE OF THE REVENUE THAT ANY IRRELEVANT MATERIAL HAS BEEN TAKEN INTO CO NSIDERATION BY THE TRIBUNAL OR THAT ANY RELEVANT MATERIAL HAS BEEN IGN ORED, NOR HAS ANY MATERIAL TO THE CONTRARY BEEN POINTED OUT TO THE CO URT TO DISLODGE THE FINDINGS OF FACT RECORDED BY THE TRIBUNAL. MORE OVER, A PERUSAL OF THE PROPOSED QUESTIONS SHOWS THAT THE IMPUGNED ORDE R HAS NOT BEEN CHALLENGED ON THE GROUND OF PERVERSITY. 18. IN THE LIGHT OF THE ABOVE DISCUSSION , THE CONCLUSION ARRIVED AT BY THE TRIBUNAL BEING BASED UPON FINDINGS OF FAC T RECORDED AFTER APPRECIATING THE MATERIAL ON RECORD, IN T HE ABSENCE OF ANY PERVERSITY BEING POINTED OUT IN THE FINDINGS OF FAC T RECORDED BY THE TRIBUNAL, NO QUESTION OF LAW, MUCH LESS, A SUBSTANTIAL QUESTION OF LAW, CAN BE STATED TO ARISE OUT OF THE IMPUGNE D ORDER, SO AS TO WARRANT INTERFERENCE. THE APPEAL, THEREFORE, FAILS AND IS, ACCORDINGLY, DISMISSED. 12. IN VIEW OF THE JUDICIAL PRECEDENTS IN THE CASE OF ASSESSEE ITSELF, GROUND NOS. 3, 4 & 5 ARE DISMISSED. 13. IN VIEW OF ABOVE, ITA NO.80/AHD/2018 FOR AY 201 1-12 IS DISMISSED. ITA NOS. 80, 81 & 82/AHD/18 [DCIT VS. M/S. SHANDONG TIEJUN ELECTRIC POWER ENGINEERING CO. LTD.] A.Y. 2011-12 T O 2013-14 - 18 - 14. THE FACTS AND CIRCUMSTANCES OF THE CASE IN ITA NOS. 81 & 82/AHD/2018 BEING SIMILAR TO ITA NO.80/AHD/2018 AND IN THE ABSENCE OF ANY CHANGED CIRCUMSTANCES, THE SAME SHAL L APPLY MUTATIS MUTANDIS. HENCE, THE GROUNDS OF APPEAL IN BOTH APPEALS ARE AL SO DISMISSED. 15. IN THE RESULT, ALL THREE APPEALS OF THE REVENUE ARE DISMISSED. SD/- SD/- (RAJPAL YADAV) (T. S. KAPOOR) VICE PRESIDENT ACCOUNTANT MEMBER AHMEDABAD: DATED 04/03/2020 TRUE COPY S. K. SINHA !'#' / COPY OF ORDER FORWARDED TO:- &. / REVENUE 2. / ASSESSEE (. )*+ , / CONCERNED CIT 4. ,- / CIT (A) /. 012 33*+4 *+#4 56) / DR, ITAT, AHMEDABAD 7. 289 / GUARD FILE. BY ORDER / 4 /5 *+#4 56) THIS ORDER PRONOUNCED IN OPEN COURT ON 04/03/202 0