DCIT, Circle- 1(1)(2), International Taxation , New Delhi V. Bombardier Transportation Sweden AB, New Delhi

ITA 8338/DEL/2018

• Counselvise Citation: [2021] 107 COUNSELVISE.COM (IT) 4961 (ITAT-DELHI)
• Duration Of Justice: 2 year(s) 8 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-09-2021
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2013-2014
• Appeal Filed On: 31-12-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Capital asset; Transfer pricing; Double taxation relief; International transaction

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH D, NEW DELHI BEFORE SH. KUL BHARAT, JUDICIAL MEMBER DR. B. R. R. KUMAR, ACCOUNTANT MEMBER (THROUGH VIDEO CONFERENCING) ITA NO. 8246/DEL/2018 : ASSTT. YEAR : 2013-14 ITA NO. 8247/DEL/2018 : ASSTT. YEAR : 2015-16 BOMBARDIER TRANSPORTATION SWEDEN AB, C/O MR. AMIT GUPTA, HEAD OF TAXATION, AT BOMBARDIER TRANSPORTATION INDIA LTD., NOVOTEL- PULMAN COMMERCIAL TOWER, 3 RD FLOOR, AEROCITY, NEW DELHI-110037 VS DCIT, CIRCLE-1(1)(2), INTL. TAXATION NEW DELHI (APPELLANT) (RESPONDENT) PAN NO. AA DCB4208M ITA NO. 8338/DEL/2018 : ASSTT. YEAR : 2013-14 DCIT, CIRCLE-1(1)(2), INTL. TAXATION NEW DELHI VS BOMBARDIER TRANSPORTATION SWEDEN AB, C/O PWC, SUCHETA BHAWAN, 1 ST FLOOR, VISHNU DIGAMBER MARG, NEW DELHI (APPELLANT) (RESPONDENT) PAN NO. AADCB4208M ASSESSEE BY : SH. DEEPAK CHOPRA, ADV. REVENUE BY : SH. BHUVNESH KULSHRESTHA, CIT DR DATE OF HEAR ING: 27 . 0 9 .20 2 1 DATE OF PRONOUNCEMENT: 27 .0 9 .20 2 1 ORDER PER BENCH: THE PRESENT APPEALS HAVE BEEN FILED BY THE ASSESSE E AGAINST THE ORDERS OF LD. CIT(A)-42, NEW DELHI DATE D 22.10.2018 AND THE APPEAL OF THE REVENUE AGAINST THE ORDER OF LD. CIT(A)- 42, NEW DELHI DATED 22.10.2018. ITA NOS. 8246, 8247 & 8338/DEL/2018 BOMBARDIER TRANSPORTATION SWEDEN AB 2 2. THE APPEAL OF THE ASSESSEE FOR THE A.YS. 2013-14 & 20 15-16 IS AGAINST UPHOLDING THE ACTION OF THE AO IN TREATING T HE BTIN AS FIXED PLACE PE OF THE ASSESSEE UNDER ARTICLE 5(1) OF THE INDO-SWEDE N DTAA. 3. AT THE OUTSET, IT WAS BROUGHT TO THE NOTICE BY THE LD. AR THAT THIS ISSUE IS SQUARELY COVERED BY THE ORDER OF THE CO-ORDINAT E BENCH OF ITAT IN THE ASSESSEES OWN CASE IN ITA NO. 859/DEL/2016 FOR A.Y. 2 011-12. THE LD. DR FAIRLY SUBMITTED THAT THE MATTER INDEED HAS BE EN ADJUDICATED BY THE ITAT VIDE ORDER DATED 29.10.2020. 4. FOR THE SAKE OF READY REFERENCE, THE OPERATIVE PAR T OF THE ABOVE SAID ORDER IS REPRODUCED AS UNDER: 40. IN OUR CONSIDERED OPINION, THE ENTIRE FINDINGS OF THE DRP ARE BASED ON ERRONEOUS APPRECIATION OF WRONG FACTS AND ON SUCH ERRO NEOUS APPRECIATION OF WRONG FACTS, THE DRP HELD THAT BTIN IS THE PE OF T HE APPELLANT IN INDIA WITHOUT APPRECIATING THE TRUE FACTS THAT THE APPELLAN T HAS NO PLACE OF DISPOSAL IN INDIA IN THE OFFICE OF BTIN FROM WHERE TH E APPELLANT COULD HAVE CONDUCTED ITS BUSINESS IN INDIA.............. 44. CONSIDERING THE FACTS IN TOTALITY, AND ALSO THE FACT THAT THE TPO HAS EXAMINED THE INTERNATIONAL TRANSACTIONS AND HAS ACCEPTED THE SAME TO BE AT ALP, WE DO NOT FIND ANY MERIT THE ADDITIONS MADE BY THE DRP. WE AC CORDINGLY, DIRECT THE ASSESSING OFFICER TO DELETE THE ADDITION OF INCOME ATTRIBUTABLE TO PE AMOUNTING TO RS. ...... 5. SINCE, THERE IS NO MATERIAL CHANGE IN THE FACTS OF TH E CASE AND THE LEGAL PROPOSITION OF THE ISSUE, WE HEREBY ALLOW THE AP PEAL OF THE ASSESSEE ON THIS GROUND. ITA NOS. 8246, 8247 & 8338/DEL/2018 BOMBARDIER TRANSPORTATION SWEDEN AB 3 6. THE APPEAL OF THE REVENUE FOR THE A.Y. 2013-14 I S AGAINST NON- TREATMENT OF THE MANAGERIAL SERVICES AS FEE FOR TECHNICA L SERVICES. THE MATTER IS STANDS COVERED BY THE ORDER OF THE ITAT FOR THE A.Y. 2011-12. 7. FOR THE SAKE OF READY REFERENCE, THE OPERATIVE PAR T OF THE ABOVE SAID ORDER IS REPRODUCED AS UNDER: 23. ON THIS BASIS, THE CITA IN A.Y 201011, HAS CA TEGORICALLY OBSERVED THAT THE SAID INTERMEDIARY SERVICES RENDERED BY THE APPELLANT TO BTIN DOES NOT SATISFY THE MAKE AVAILABLE CLAUSE AND DOES NOT AM OUNT TO FTS. 24. IN OUR CONSIDERED OPINION, THE TECHNICAL OR CON SULTANCY SERVICES RENDERED SHOULD BE AIMED AT AND RESULT IN TRANSMITTING TECHN ICAL KNOWLEDGE, ETC., SO THAT THE PAYER OF THE SERVICE COULD DERIVE AN ENDURING B ENEFIT AND UTILIZE THE KNOWLEDGE OR KNOW-HOW ON HIS OWN IN FUTURE WITHOUT THE AID OF THE SERVICE PROVIDER. THE TECHNICAL KNOWLEDGE OR SKILLS OF THE PROVIDER SHOULD BE IMPARTED TO AND ABSORBED BY THE RECEIVER SO THAT THE RECEIVER C AN DEPLOY SIMILAR TECHNOLOGY OR TECHNIQUES IN THE FUTURE WITHOUT DEPENDING UPON THE PROVIDER. TECHNOLOGY WILL BE CONSIDERED 'MADE AVAILABLE' WHEN THE PERSON ACQU IRING THE SERVICE IS ENABLED TO APPLY THE TECHNOLOGY. 25. THE FACT THAT THE PROVISION OF THE SERVICE THAT MAY REQUIRE TECHNICAL KNOWLEDGE, SKILLS, ETC., DOES NOT MEAN THAT TECHNOL OGY IS MADE AVAILABLE TO THE PERSON PURCHASING THE SERVICE. IN OUR CONSIDERED VI EW, PAYMENT OF CONSIDERATION WOULD BE REGARDED AS 'FEE FOR TECHNICAL/INCLUDED SE RVICES' ONLY IF THE TWIN TEST OF RENDERING SERVICES AND MAKING TECHNICAL KNOWLEDGE A VAILABLE AT THE SAME TIME IS SATISFIED. FOR THIS, WE DERIVE SUPPORT FROM THE DEC ISION OF THE HON'BLE KARNATAKA HIGH COURT IN THE CASE OF DE BEERS INDIA MINERALS PR IVATE LIMITED 346 ITR 467. 26. IN CONSIDERATION OF TOTALITY OF FACTS, WE ARE O F THE OPINION THAT THE INTERMEDIARY SERVICES RENDERED BY THE APPELLANT DO NOT MAKE AVAILABLE ANY TECHNICAL KNOWLEDGE, SKILL ETC TO BTIN AND BTIN IS NOT A EQUIPPED TO APPLY TECHNOLOGY CONTAINED IN SERVICES RENDERED BY THE AP PELLANT. THEREFORE, THE ITA NOS. 8246, 8247 & 8338/DEL/2018 BOMBARDIER TRANSPORTATION SWEDEN AB 4 INTERMEDIARY SERVICES PROVIDED BY THE APPELLANT TO BTIN DO NOT TANTAMOUNT TO FTS AND ACCORDINGLY, SHALL NOT BE TAX ABLE IN INDIA. 8. SINCE, THERE IS NO MATERIAL CHANGE IN THE FACTS OF TH E CASE AND THE LEGAL PROPOSITION OF THE ISSUE, WE HEREBY DISMISS THE APP EAL OF THE REVENUE ON THIS GROUND. 9. IN THE RESULT, BOTH THE APPEALS OF THE ASSESSEE ARE ALLOWED AND THE APPEAL OF THE REVENUE IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 27/09/2021. SD/- SD/- (KUL BHARAT) ( DR. B. R. R. KUMAR) JUDICIAL MEMBER ACC OUNTANT MEMBER DATED: 27/09/2021 *SUBODH KUMAR, SR. PS* COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(APPEALS) 5. DR: ITAT ASSISTANT REGISTRAR