SMS GROUP GMBH,DELHI V. ACIT.CIRCLE-3(1)(2), NEW DELHI

ITA 377/DEL/2025

AI Insights

The case involves multiple appeals by SMS Group GmbH against the orders of the Assessing Officer and the Dispute Resolution Panel, which taxed certain incomes as Fees for Technical Services (FTS) and business profits attributable to a Permanent Establishment (PE) in India. The tribunal examined the taxability of income from offshore supplies of equipment and designs, and onshore supervisory services, across different assessment years. The main legal contention was whether the income from these sources should be taxed in India, considering the provisions of the India-Germany Double Taxation Avoidance Agreement (DTAA) and the domestic tax laws.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 822625 (ITAT-DELHI)
• Duration Of Justice: 11 month(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 24-12-2025
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: D
• Assessment Year: 2022-2023
• Appeal Filed On: 22-01-2025
• Other Referred Cases: Ishikawajima-Harima Heavy Industries Ltd. Vs. Director of Income Tax, Mumbai, Hyundai Heavy Industries Co. Ltd. Vs. Director of Income Tax, Mumbai, Mitsui Engineering and Shipbuilding Vs. CIT, AEG Aktiengesellschaft Vs. CIT, CIT Vs. Andhra Petrochemicals Ltd.
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: M.S. NETHRAPAL
• Assessee Lawyers: PERCY PARDIWALA
• Keywords: Set aside; Business income; Revised return; Reassessment proceedings; Question of law; Principle of natural justice; Assessment record; Initiation of penalty proceedings; Double taxation relief; Permanent establishment
• Section: 147; 148; 143(3); 142(1); 234B; 5(2)

Judgement Text

"Page | 1 INCOME TAX APPELLATE TRIBUNAL DELHI BENCH “D”: NEW DELHI BEFORE SHRI M. BALAGANESH, ACCOUNTANT MEMBER AND SHRI VIMAL KUMAR, JUDICIAL MEMBER ITA No. 1591/Del/2022 (Assessment Year: 2017-18) ITA No. 1592/Del/2022 (Assessment Year: 2018-19) ITA No. 993/Del/2023 (Assessment Year: 2020-21) ITA No. 3297/Del/2023 (Assessment Year: 2021-22) ITA No. 377/Del/2025 (Assessment Year: 2022-23) SMS Group Gmbh, C/o. Mohinder Puri & Co, CAs, 1A-D, Vandhna Building, 11, Tolstoy Marg, New Delhi-110001 Vs. ACIT, Circle-3(1)(2), International Taxation, New Delhi (Appellant) (Respondent) PAN: AADCS1173J Assessee by : Shri Percy Pardiwala, Sr. Adv Shri C. S. Mathur, CA Ms. Richa Agarwal, CA Revenue by: Shri M. S. Nethrapal, CIT DR Date of Hearing 12/11/2025 Date of pronouncement 24/12/2025 O R D E R PER BENCH: 1. The Assessee SMS Group Gmbh (hereinafter referred to as ‘assessee) by filing the present appeal sought to set aside the impugned order dated 23.05.2022 passed by the Assessing Officer (AO) under section 143(3) r.w.s. 144C(13) of the Income Tax Act, 1961 (for short ‘the Act’) in consonance with the order passed by the Dispute Resolution Panel (DRP) dated 17.03.2022 u/s 144C(5) of the Act. 2. Identical issues are involved and hence they are taken up together and disposed of by this common order for the sake of convenience. Printed from counselvise.com ITA No. 1591-1592/Del/2022 ITA No. 993 & 3297/Del/2023 ITA No. 377/Del/2025 MS Group Gmbh Page | 2 ITA No. 1591/Del/2022 for AY 2017-18 (Assessee’s appeal) 3. The Ground Nos. 1, 2 and 11 raised by the assessee are general in nature and does not require any specific adjudication. 4. Ground Nos. 3 to 6 raised by the assessee are challenging taxability of supply of equipment and designs in India as per the provisions of the Act and as per the treaty. 5. We have heard the rival submissions and perused the materials available on record. The assessee is a tax resident of Germany, engaged in a business of supply of plants & equipments, supply of drawings and designs and rendering supervisory services in erection, commissioning, performance guarantee, test of equipment supply; and rendering technical services to the customers in metallurgical sector in various parts of the country. During the year under consideration, the assessee has received consideration from customers in India towards the following:- a. Offshore supply of design and engineering: b. Offshore supply of equipment and parts; c. Onshore supervision services d. Other Technical Services e. Cost reimbursement towards SAP/ Intranet It is not in dispute that all the equipments supplied to various customers are designed, manufactured and fabricated according to each customer's requirement at assessee's factories outside India alongwith the drawings and designs which are also supplied from outside India. The assessee has Printed from counselvise.com ITA No. 1591-1592/Del/2022 ITA No. 993 & 3297/Del/2023 ITA No. 377/Del/2025 MS Group Gmbh Page | 3 no office, factory or workshop in India. All the agreements, as entered by the assessee with customers in India, provides separate scope of work and price payable towards:- ➤ Design, manufacture and delivery of plant, equipment, from Germany: ➤ Supply of drawings, documents, designs of the plant and equipment from Germany: ➤ Supervision of erection and commissioning of the plant, equipment by deputation of personnel at site. ) 6. All functions in relation to the supply/sale covering purchase of material, parts, fabrication, manufacture of the plant, sale, delivery, transportation are carried out from assessee’s office located outside India. The assessee has furnished all the agreements for drawing, designs, fabrication, manufacture of plant and equipment that took place in Germany before the lower authorities. It was submitted that on perusal of the contracts and agreements, it could be confirmed that - A. design, fabrication, manufacture of plant and equipment took place in Germany; B. supply/ delivery took place in Germany involving transfer of title/risk to the customers outside India; C. payment was received outside India. 7. The explanation given by the assessee before the ld AO with regard to the consideration received for each of the activity are as below: – Printed from counselvise.com ITA No. 1591-1592/Del/2022 ITA No. 993 & 3297/Del/2023 ITA No. 377/Del/2025 MS Group Gmbh Page | 4 a) Receipts from sale of drawing, designs and engineering: The assessee had receipts of Rs. 17,07,56,737/- from various indian entities including, Bhushan Steel Ltd, Steel Authority of India Ltd, Jindal Steel & Power Ltd, JSW Steel Ltd, ESSAR Steel Ltd, Rashtriya Ispat Nigam Limited, TATA Steel Limited, Ryker Base Pvt Ltd and Metalyst Forges Ltd on account of sale of drawing, designs and engineering. These receipts were not offered to tax on the ground that these receipts cannot be attributed to India for computing taxable income in India. b) Receipts from sale of plant & equipments: The assessee had receipts of Euro 3,66,87,094 and USD 17,01,500 from various Indian entities viz. Steel Authority of India Ltd, Rashtriya Ispat Nigam Ltd, Bhushan Steel Ltd. Esmech Equipment Pvt Ltd and Jindal Steel & Power Ltd. These receipts were not offered to tax on the ground that these services were in connection with offshore sale of plant & equipment and these receipts cannot be attributed to India for computing taxable income in India. c) Receipts from providing technical services The assessee had receipts of Rs. 5,25,70,303/-. These receipts were offered to tax as fee for technical services taxable at 10% as per DTAA between India & Germany. Printed from counselvise.com ITA No. 1591-1592/Del/2022 ITA No. 993 & 3297/Del/2023 ITA No. 377/Del/2025 MS Group Gmbh Page | 5 d) Receipts from Onshore Supervisory Services in relation to erection and commissioning (Permanent Establishment), where period of activity is more than six months: The assessee had revenue receipts of Rs. 89,18,35,644/- from M/s Bhushan Steel Ltd, JSW Steel Ltd, ESSAR Steel Ltd, Ramakrishna Forgings Ltd, and other entities on account of provision of supervisory services for erection and commissioning of plant and equipment in India during the financial year 2016-17 and has also offered for taxation as business income considering that contracts qualify as PE in India. e) Receipts from Onshore Supervisory Services in relation to erection and commissioning where period of activity is less than six months The assessee had receipts of Rs. 47,153/- from Steel Authority of India Ltd for providing supervisory services for less than six months for erection and commissioning of plant and equipment in India. These receipts have not been offered for taxation. 1) Receipts from SAP providing technical services The assessee had receipts of Rs. 4,51,35,583/- from SMS India Private Limited towards SAP & Intranet Charges. These have been claimed as non- taxable in India as the same is in the nature of reimbursement. Out of this receipts of ₹4,51,35,583/- from SMS India Private Limited towards SAP and Internet charges, claiming the sum to be reimbursed and the same is not disputed before us as DRP accepted the stand of the assessee. The ld AO Printed from counselvise.com ITA No. 1591-1592/Del/2022 ITA No. 993 & 3297/Del/2023 ITA No. 377/Del/2025 MS Group Gmbh Page | 6 noted that assessee has maintained audited books of account with respect to supervision services rendered in India and for the purpose of supervision services, the assessee constituted a “Supervision Permanent Establishment (Supervision PE). The ld AO with respect of supervision services offered by the assessee, the technicians (employees) of the assessee company visit India. Thus, the presence of technicians in India constitutes fixed place PE in India within meaning of Article 5(1) of India-Germany Treaty. 8. The ld AO observed that taxation of business income of the non- resident is governed by the source rule under domestic provisions u/s 5(2) r.w.s. 9(1)(i) of the Act and Article 7 of the relevant tax treaty. The ld AO concluded that both the threshold are met and accordingly, the next question would be determination of amount of profit attributable to the PE. The total receipts that accrued/ arose in India to the assessee are of two types i.e. services related receipts and receipts from supply of equipment. 9. We find that the issue in dispute is already decided by the coordinate bench of this Tribunal in assessee’s own case in ITA No. 256/Del/2017 for AY 2012-13; ITA No. 7569/Del/2017 for AY 2013-14; ITA No. 7570/Del/2017 for AY 2014-15; ITA No. 5521/Del/2018 for AY 2015-16; and ITA No. 4044/Del/2019 for AY 2016-17 dated 09.04.2025 wherein, this Tribunal by placing reliance on the decision in assesse’s own case for AY 2008-09 observed as under:- “3. Learned senior counsel Mr. Percy Pardiwalla submits at the outset that all these fourteencases involve identical substantive grounds; both in law and on facts. We thus treat „M/s. SMS Group GmbH‟s ITA No. 5580/Del/2011 for AY: 2008-09 as the “lead” appeal raising the following substantive grounds: 1. That on the facts and circumstances of the case and in law the order of Additional Director of Income-tax (International Printed from counselvise.com ITA No. 1591-1592/Del/2022 ITA No. 993 & 3297/Del/2023 ITA No. 377/Del/2025 MS Group Gmbh Page | 7 Taxation), Delhi (A.O) u/s 143(3) in pursuance of direction issued u/s 144C by Dispute Resolution Panel (DRP) is perverse, bad in law and void, being contrary to law and principles of natural justice. 2. That the learned A.O./DRP has erred in computing income at Rs. 159,851,648/- as against returned income of Rs. 41,12,262/- 3.(a) That the learned A.O. and DRP have erred in law and on facts in holding that consideration received for supply of drawings and designs, forming integral part of the supply of equipment, received under various contracts is taxable as 'Fees for Technical Services', u/s 9(1)(vii) of the Act. (b) That the learned A.O. and DRP have misdirected themselves on wrong assumptions of facts and in law in not accepting the claim that supply of drawings and designs was inextricably linked to sale of plant and equipment and represented consideration of the nature of 'Business Profits' not liable to tax in India, as per the provision of DTAA between India and Germany read with Indian Income-tax Act. 4. (a) That the learned A.O./DRP has erred on facts and in law in holding that sale of plant and equipment was concluded in India based on wrong assumptions that risk and title passed in India without taking into consideration terms and conditions of contracts in respect of supply of plant and equipment and drawings and designs. (b) That the learned A.O./DRP has wrongly and without any basis erred in holding that the assessee has 'Fixed Place P.E.' in India where from business of the assessee was wholly or partly carried on. (c) That the learned A.O./DRP has erred in not considering the provisions of Protocol 1(a) of the DTAA between India and Germany as relied upon by the assessee, in terms of which, on the facts, no part of consideration for supply of equipment from Head Office is attributable to P.E., if any, in India. (d) That the learned A.O./DRP has erred in holding that profit from supply of equipment are attributable to supervisory P.E. in India and thus taxable in India in terms of Rule 10 of the Income- tax Rules, 1962. Printed from counselvise.com ITA No. 1591-1592/Del/2022 ITA No. 993 & 3297/Del/2023 ITA No. 377/Del/2025 MS Group Gmbh Page | 8 (e) Without prejudice, the learned A.O./DRP has erroneously held that on facts, profit attributable and taxable in India in respect of supplies was 30% of global profit rate. The said attribution made at Rs. 11,14,83,934/- is arbitrary, highly excessive and has no rationale whatsoever, and is against the principles of attribution as laid down under the provisions of Income-tax Act, DTAA between India and Germany and various decisions of Hon'ble High Court, Supreme Court of India. 5. That the learned A.O./DRP has erred in erroneously holding that amounts received towards reimbursement of cost towards intranet, SAP are liable to tax in India as 'Fees for Technical Services'. 6. That the learned A.O./DRP has erred in levying interest u/s 234B of the Income-tax Act which provision is not applicable in case of non-resident company as held by the jurisdictional High Court of Delhi in the case of Director of Income-tax Vs. Mitsubishi Corporation ITA No. 209/2009. 7. That the assessee may be allowed to add, supplement, revise, amend grounds as raised hereinabove. 4. Mr. Pardiwalla states very fairly that theassessee‟s1stand 2ndgrounds are general in nature. Rejected in very terms. 5. Next come assessee‟s third and fourth substantive grounds canvassing its inter-connected grievances that both the learned lower authorities have erred in law and on facts, inter alia, in treating its consideration received from supply of designs and drawings forming integral part of the sale/supply of equipments, received under various contracts, as taxable under section 9(1)(vii)of the Act, being in the nature of “fee for technical services” (FTS) under the above former and its receipt derived from sale of plant and equipments as alleged to have been concluded in India and assessable in India, involving varying sums; respectively. 6. We now advert to the basic relevant facts. The assessee herein “M/s. SMS Seimag AG” formerly known as “M/s. SMS Demag AG”, is a German company engaged in the business(es) of supply of plant, equipment, drawings & rendering of technical services to customers in the metallurgical sector world-wide. Learned Assessing Officer‟s assessment herein dated13.10.2011 suggests that he treated the assessee‟s business activities in four heads i.e. supply of plant and equipment from Germany, supply of drawings and designs in relation to plants from Germany, supervision/erection and commissioning, performance, guarantee test of equipment supplied and rendering of technical services etc., as taxable in India. He further noted that the assessee‟s receipts arising from the above business activities under four heads i.e. the income Printed from counselvise.com ITA No. 1591-1592/Del/2022 ITA No. 993 & 3297/Del/2023 ITA No. 377/Del/2025 MS Group Gmbh Page | 9 from technical services, qua receipts derived from M/s. Ispat Industries Ltd. and M/s. JSW Steel Limited, supervision charges from M/s. Tata Steel Limited, receipts from designs and drawings in case of seven entities and sale of plants and equipments etc.; involving varying sums, as liable to be assessed in India. The assessee appears to have duly recognized its income from the above first and foremost receipt of Rs.41,12,262/-only. It thus sought to explain during the course of assessment that the remaining three receipts hereinabove, inter alia, represented advances from customers in the balance- sheet of its Permanent Establishment (PE), the third category herein constitute off-shore supply for which the corresponding sales as well as payments had been finalized and received outside India and the last one was only an off-shore sale of plants/equipments, respectively. 7. Learned Assessing Officer‟s assessment discussion went on to consider the assessee‟s above corresponding detailed objections which stood rejected, inter alia, on the ground that its case was covered under section 9(1)(vii) of the Act since the income herein was “FTS”and was not entitled for any relief under the India – Germany Double Taxation Avoidance Agreement “DTAA”. We are informed during the course of hearing that the main dispute(s) between both the parties in the assessee‟s instant “lead” appeal is that of taxability of the income derived from sale of the designs and drawings and supply of equipment (in off-shore mode) only. 8. Be that as it may, learned Assessing Officer first of all added the assessee‟s designs and drawings receipts of Rs.147,72,46,452/- as its business receipts quantified from sale of equipments to Rs.11,14,83,934/- qua sale/supply receipts of Euro 9,98,50,420 and assessed its total income at Rs.159,28,51,648/- in the assessment order. Firstly proposed the impugned twin additions in his draft assessment order dated 31.12.2010. The assessee filed it‟s statutory objections before the learned DRP which stood rejected in the former‟s directions dated 30th September, 2011, as follows: “2. The grounds of objection, filed as Appendix A with Form No. 35A, are as under: 1. That the order of learned Assessing Officer is bad both in law and on facts of the case. 2. That the learned Assessing Officer has erred in computing income at Rs. 176,00,77,547/- as against returned income of Rs. 41,12,262/- 3. That the learned Assessing Officer has erred in making assessment without providing adequate opportunity and thus acted contrary to principals of Natural Justice, which is illegal. 4. (a) That the learned Assessing Officer(A.O.) has erred in holding that consideration received by the assessee in relation Printed from counselvise.com ITA No. 1591-1592/Del/2022 ITA No. 993 & 3297/Del/2023 ITA No. 377/Del/2025 MS Group Gmbh Page | 10 to contract for supply of drawings and designs, is essentially in the nature of \"Fees for Technical Services under the provisions of Section 9(1)(vil) of the Indian Income-Tax Act. (b) That the learned Assessing Officer has made erroneous observations, a assumptions on facts, erroneous interpretation of terms of the contract, incoming to the conclusion that the amounts received by the assessee were taxable as 'Fees for Technical Services' (c) That the learned Assessing Officer has erred in not following the decision of the Hon'ble High Court of Delhi, in the case of Mitsui Engineering and Shipbuilding [174 CTR 66 (Delhi)] and erroneously observing that the same did not deal with the issue of 'Fees for Technical Services' covered by provisions of section 9(1)(vii) of the Income Tax, Act. (d) That the learned Assessing Officer has erred in rejecting the contention of the assessee that supply of drawings and designs, linked/incidental sale of plant and equipment, represents consideration of the nature of 'Business Profits' not liable to tax in India as per the provisions of Indian Income- Tax Act as well as the DTAA between the India and Germany. (e) That the learned Assessing Officer has erred in rejecting the argument of the assessee that in terms of provisions of DTAA between India and Germany, read with Protocol Para 1(b) the amounts as received for sale of drawings, designs, documents were not liable to tax in India. (f) That the decisions as relied upon by the Learned Assessing Officer are distinguishable, not applicable, on facts of the assessee. 5. (a) That the Learned Assessing Officer has erred in holding that on facts sale of plant and equipment was concluded in India. (b) That the learned Assessing Officer has made incorrect appreciation of the provisions of the contract, inaccurate interpretation of the provisions of the Income-Tax Act and DTA between India and Germany and holding consideration for same was liable to tax in India. (c) That the learned Assessing Officer has erred in not applying decisions of Hon'ble Supreme Court of India in the following cases where, on similar facts, it has been held that consideration for supply of plant and equipment, from outside India, was not liable to tax in India. Printed from counselvise.com ITA No. 1591-1592/Del/2022 ITA No. 993 & 3297/Del/2023 ITA No. 377/Del/2025 MS Group Gmbh Page | 11 (i) Commissioner of Income Tax and Another Vs. Hyundai Heavy Industries Company Limited (291 ITR 482 SC); (ii) Ishikawajima - Harima Heavy Industries Ltd. -Vs. Director of Income Tax, Mumbai(228 ITR 408Sc). (d) That the learned Assessing Officer has erred in holding that the assessee has 'Fixed place P.E. in India where from business of the assessee was wholly or partly carried on. (e) That the learned Assessing Officer has erred in not considering the provisions of Protocol 1(a) of the DTAA between India and Germany as relied upon by the assessee, in terms of which, on the facts, no part of consideration for supply of equipment from Head Office, is attributed, to P.E., if any, in India. (f) That without prejudice the learned Assessing Officer has erred in invoking the Rule 10 of the Income-Tax Rules, in computing profit attributable in India in relation to supply of equipment. The said Rule has no application on facts. (g) Without prejudice, the learned Assessing Officer has erroneously held that on facts, profit attributable in respect of supplies was 75% of global profit rate. The said attribution is arbitrary, highly excessive and has no rationale whatsoever, and is against the principals of attribution as laid down under the provisions of Income-Tax, Act, DTAA between India and Germany and various decisions of Hon'ble High Court, Supreme Court of India. 6. That the Learned Assessing Officer has erred in erroneously holding the amounts received towards reimbursement of cost towards intranet, SAP are liable to tax in India as 'Fees for Technical Services'. 7. That the learned Assessing Officer has erred in directing charging of interest without specifying the same, not attracted on facts. 8. That the learned Assessing Officer has erred in initiating penalty proceedings under section 271(1) (C) of the Income Tax, Act, 1961. The provisions of which are not attracted on the facts. 9. That the assessee may be allowed to add, supplement, revise, amend grounds as raised hereinabove. Printed from counselvise.com ITA No. 1591-1592/Del/2022 ITA No. 993 & 3297/Del/2023 ITA No. 377/Del/2025 MS Group Gmbh Page | 12 2. Facts of the case: The assessee is a company incorporated in Germany. During the year under consideration it was engaged in the business of supply of plant, equipment, drawings and rendering of technical services to customers in the metallurgical sector. It filed a return for the assessment year under consideration on 26.9.2008 declaring an income of Rs. 41,21,262. The case was taken up for scrutiny and after necessary enquiry the A.O has passed a draft order proposing some variations in the returned income of the assessee. Aggrieved by this the assessee has filed the above objections before this Panel. The assessee has filed detailed submissions along with the application in Form 35A and during the hearing before the Panel the A.R made further submissions which have been taken into account and the objections are disposed of as under. 3. Objections no. 1 to 3: These objections are preliminary and general in nature and are therefore not being discussed in details here as they will be covered in the course of the subsequent submissions. 4. Objection no. 4: This objection which has been further sub divided into six subsidiary objections relate primarily to the proposal in the draft order to tax the income from supply of drawing and designs as fees for technical services u/s 9(1)(vii) of the I.T Act. During the assessment proceedings the A.O observed that the assessee received Rs. 147,72,46,452 during the year from seven Indian companies on account of sale of drawings and designs and this amount was not offered from tax on the ground that this amount was not taxable in India as the sale took place outside India and the consideration was also received abroad. The assessee furnished a detailed submission giving its reasons why this amount was not taxable in India and after considering these submissions the A.O has held that the receipts in question are taxable in India as fees for technical services in view of the provisions of Explanation to sub section (2) of sec 9 of the IT Act. 4.2 The assessee has made the following submissions contesting the above proposal: \"1. At the outset it is submitted that payments received in respect of supplies of drawings and designs cannot be subject to tax in India as the same are inextricably linked to supplies of equipments and not pertaining to rendering of technical services. The Explanation 2 to Section 9(1)(vii) that defines fees for technical services does not apply where the consideration is for Printed from counselvise.com ITA No. 1591-1592/Del/2022 ITA No. 993 & 3297/Del/2023 ITA No. 377/Del/2025 MS Group Gmbh Page | 13 outright sale of plant with essential drawings and designs and not for rendering of engineering and technical services. Such payments would fall in the definition of business profits and cannot be subjected to tax unless the assessee had a P.E. and supplies are connected therewith. 2. A separate price is stipulated under the Agreements for such supplies, which is payable outside India. Terms of delivery, involving transfer of title outside India are specified under the Agreements. During course of hearing specific evidence regarding supply of drawings and designs, from outside India, comprising Air-shipment Bills etc. relating to some contracts were submitted to the learned Assessing Officer. 3. On bare perusal of terms of contracts executed for supply of drawings and documents, it is clear that drawings, designs and documents to be supplied are in relation to equipments to be manufactured and fabricates by the assessee at its plants outside India and not for providing any engineering or technical services to the assessee. There is no rendering of technical services as envisaged under section 9(1)(vii) of the Act read with Art. 12 of DTAA with Germany 4. The argument that drawings and designs are taxable as fees for technical services merely because these have to be prepared according to requirement of customers is misplaced. The real issue is whether these drawings from part of the plant which are of complex nature and whether the same can be manufactured/fabricated or installed without necessary drawings and designs. Since the plant and equipment is tailor-made as per requirement of customers those drawings have to be prepared before equipment supplies. 5. In Hyundai Heavy Industries Co. Ltd. (2007) 291 ITR 482, the Supreme Court has held that where income from designing fabrication and procurement had arisen outside india it was not taxable. 6. The information provided on website is of general nature and is not in respect of the specific contracts which are subject matter of this case. The taxability of receipts ought to be determined according to the terms and conditions of the agreement and not on the basis of general information. Printed from counselvise.com ITA No. 1591-1592/Del/2022 ITA No. 993 & 3297/Del/2023 ITA No. 377/Del/2025 MS Group Gmbh Page | 14 7. The different clauses of the contracts cannot be viewed in isolation and needs to be examined in its proper prospective taking into account the nature of supplies made. 8. The cases relied by the Assessing Officer have no bearing to the facts of the case. In the case of AEG Aktiengesellschaft Vs. CIT (2004) 267 ITR 209-(KAR) the German company had undertaken to supply electrical portions of the Mill and payments for drawings and documents were received separately for rendering services. These drawings were not linked to supply contract and thus held as fees for technical services. In second case of GMP International GmbH Vs. DIT (Intl. Tax) AAR/837/2009, the assessee company was engaged in the business of architectural designs and drawings. The company in response to a tender agreed to prepare drawings and designs for construction of a complex for Tamil Nadu Legislative Assembly. The scope of work in this case related to consultancy work and preparation of architectural designs and drawings. The ratio of these cases therefore do not help the case of revenue as essentially the contract here is of supply of plant and equipment along with drawings and designs. 4.3 The above submissions have been considered by this Panel. The main thrust of the assessee's argument is that all acts relating to the transaction have taken place outside India and that the designs and drawings are connected to the sale of the equipment and not for any engineering or technical services to the assessee. In order to come to a proper conclusion it would be appropriate to examine the terms of the relevant agreements. For this purpose the contract for supply of drawings and documents for Steel Melt Shop with JSW Steel Ltd. India can be looked into. i. From the Terms of Payment as given in Article 7 it is seen that 5% of the unit wise contract price for drawing and document shall be payable on completion of commissioning of the respective units (para 7.3). A further 5% of the unit wise price shall be paid upon successful completion of Performance Guarantee Tests of the respective units (para 7.4). The seller is to furnish a performance bank guarantee of 5% of the contract price at the time of release of payment against commissioningunder Art 7.3 (para 7.4). The seller is to give another guarantee of 5% at the time of release of payment against performance guarantee tests under Art Printed from counselvise.com ITA No. 1591-1592/Del/2022 ITA No. 993 & 3297/Del/2023 ITA No. 377/Del/2025 MS Group Gmbh Page | 15 (7.4). Both these guarantees are to remain valid till expiry of warrantee period. ii. Article 10 provides for liquidated damages. Art 10.2.1 provides that in case on or more of the performance guarantee parameters for any of the units under the responsibility of the seller are not achieved then the seller shall pay liquidated damages for non-achievement of performance guarantee parameters for such units. Art 10.2.3 provides that even after the repeat tests the guaranteed figures are not within the acceptable range then the Purchaser shall have the option to reject the equipment or accept it with liquidated damages. iii. Art 12 lays down detailed rules for performance guarantees in which the seller continues to be liable even after delivery/ sale of the drawings and designs and is responsible for performance of the units. iv. Article 14 provides for patent, intellectual property rights and confidentiality. Art 14.5 provides that the drawings, specifications, documents, data, manual etc are proprietary information of the Seller and are to be kept strictly confidential by the Purchaser. The purchaser is not to disclose this information to any third party for any purpose. Art 14.7 provides that all the drawings, designs etc shall remain vested n the Seller. The Seller agrees only to grant the purchaser a non-exclusive and non-transferable license to use the patent or know how which are specified in the Contract and technical specification. Art 14.8 provides that the provisions of the Art 14 relating to intellectual property rights will apply for five years after completion of the execution of this contracts. Taking into consideration the above elements of the contract for the supply of drawings and design the Panel is of the view that it is not a case of a sale of commodity per se or a transaction which has taken place outside the Indian Territory. The rights and obligations of the purchaser and the Seller continue for a much longer period (five years). The designs and drawings also enable the purchaser to be able to perform all the functions relating to repair and maintenance of the equipment. To this extent it cannot be denied that there is no transfer of know how or 'making available' technical know-how by the Seller to the assessee Further even though the drawings and designs etc. are linked to the sale ofequipment, the fact remains that a separate contract has been Printed from counselvise.com ITA No. 1591-1592/Del/2022 ITA No. 993 & 3297/Del/2023 ITA No. 377/Del/2025 MS Group Gmbh Page | 16 made between the two parties spelling out separate terms and conditions that govern this transaction. Therefore, the sale of equipment and the transfer of know-how under the agreement in respect of drawings, designs etc cannot be confounded with each other. Had it been inextricably linked with supply of equipment there would have been no reason to enter into two separate agreements. Taking into consideration the facts of the case the Panel is of the view that the transaction is not of the nature the profit from which would be taxable as business profits but fees for technical services. The objection made by the assessee is therefore rejected.” This leaves the assessee aggrieved. 9. We have given our thoughtful consideration to the assessee‟sand the Revenue‟s vehement respective contentions against and in support of the impugned additions, inter alia, holding the former‟s receipts derived from sale of designs and drawings and off-shore sale/supply of plants/equipments as taxable in India. We first of all sought to verify the final status of the very issues in the preceding and succeeding assessment years. It, inter alia, emerges during the course of hearing that so far as the assessee‟s instant former head income of his incomederived from designs and drawings and off- shore sale of plants and equipments are concerned, this tribunal‟s recent order dated 06.01.2025 (authored by one of us, S. Rifaur Rahman, AM) has already settled the issue against the department in assessments year 2005-06, 2014-15 to 2017-18 as under: “3.Since the issues are common and the appeals are connected, hence the same are heard together and being disposed off by this common order. We take up the assessee‟s appeal being ITA No.1073/Del/2014 for AY 2005-06 as lead case to adjudicate the issues under consideration. 4.The relevant facts of the case are, assessee filed its return of income on 29.11.2006 declaring income at Rs.8,11,98,063/-. The return was processed under section 143(1) of the Income-tax Act, 1961 (for short „the Act‟) on returned income. Subsequently, the case was selected for reassessment and notices u/s 148 of the Act was issued and served on the assessee. In response, assessee filed its return of income at Rs.78,44,243/-. Notices u/s 142(1) was issued and served on the assessee. In response, ld. AR for the assessee attended the proceedings and filed the relevant information as called for. Printed from counselvise.com ITA No. 1591-1592/Del/2022 ITA No. 993 & 3297/Del/2023 ITA No. 377/Del/2025 MS Group Gmbh Page | 17 5. Assessee is a company incorporated under the laws of Germany. It is engaged in the business of supply of plant, equipment, drawings and rendering of technical services to customers in the metallurgical sector in various parts of the world. During the year under consideration, assessee has entered into various contracts with Indian clients for supply of plant and equipment in Germany, supply of drawings and designs in relation to the plant from the Germany and rendering of technical services. The assessee recognized the receipts from drawings and designs and technical services to the following entities:- i Tata Iron Steel Co. Ltd. Rs.7,69,20,032/- ii. ISPAT Industries Ltd. Rs.3,96,701/- iii SMS Demag Pvt. Ltd. Rs.38,81,330/- Rs.8,11,98,063/- 6. The assessee has recognized the above revenue and offered to tax as „Fee for technical services‟ @ 10% as per the DTAA between India and Germany. 7. During the course of assessment proceedings, the AO observed that the receipts from Jindal Steel and Power Limited amounting to Euro 12,15,200 (Rs.6,94,96,347/-) was shown as exempt in the return of income originally filed. The said Indian company had not deducted/paid any income-tax on the said consideration on the ground that the same is not liable to tax in India. Accordingly, a claim of exemption was made in the return of income filed by the assessee. However, the AO observed that the nature of receipts is same as that made from other Indian company in relation to supply of drawings and designs, the same have been offered for taxation @ 10%, therefore, consideration received in relation to drawings and designs from Jindal Steel and Power Limited should also be taxed @ 10% on the gross amount. Accordingly, he made addition of Rs.6,94,96,347/- to the income of the assessee. 8. Aggrieved with the above order, assessee preferred an appeal before the ld. CIT(A)-XXIV, New Delhi. Before ld. CIT (A), assessee has raised various grounds including jurisdictional issues for initiating reassessment proceedings in the case of the assessee and also on merit, assessee has submitted before the ld. CIT (A) as under:- Printed from counselvise.com ITA No. 1591-1592/Del/2022 ITA No. 993 & 3297/Del/2023 ITA No. 377/Del/2025 MS Group Gmbh Page | 18 “9.3 It would be observed that amount of Rs. 6,94,96,347/- which has been added to the income comprises of the following receipts from Jindal Steel & Power Limited. (a)Offshore sale of drawing and design Rs.1,67,32,800 (b) Offshore supply of equipment Rs.5,27,63,546 Rs.6,94,96,346 The learned AO in the reassessment order as made, has erroneously treated the whole of the amount including that for the supply of equipment as \"Fees for Technical Services\". He has failed to consider that consideration for supply of equipment in any case is not liable to tax in India, which position he has himself accepted in respect of other supplies. As such an amount of Rs. 5,27,63,546/- included relating to supply of equipment is in any case not liable to tax under Art 12 of the DTA as erroneously referred to by the AO. 9.4 Regarding non-taxability of consideration for sale of drawings and designs, it was submitted to the AO that the said claim was based on the following:- (a) (b) (c) (d) a) Terms of contract; b) Decisions of ITAT in the case of the assessee where such receipts for the sale of drawing and designs were not held to be taxable in various Assessment Years c) Decisions of Hon'ble Madras High Court in the case of CIT Vs. Neyveli Lignite Corporation Ltd (Neyveli), 243 ITR 459. d) Decision of Hon'ble High Court of Delhi in the case of Mitsui Engineering & Ship Building 259 ITR 248. 9.5 Pursuant to the contractual terms, consideration for sale of drawings and designs is not liable to tax in India as the same does not accrue or arise in India. Even under the provisions of DTAA between India and Germany, the same is not liable to tax in the absence of P.E. of the assessee in India, in the relevant year. Reference may be made to following clauses of the agreement with Jindal Steel & Power Ltd.” 9. After considering the submissions of the assessee, ld. CIT (A) rejected the plea of the assessee on the jurisdictional issue and with regard to merits, ld. CIT (A) partly allowed the grounds raised by the assessee with the following observations :- Printed from counselvise.com ITA No. 1591-1592/Del/2022 ITA No. 993 & 3297/Del/2023 ITA No. 377/Del/2025 MS Group Gmbh Page | 19 “10.1 I have gone through various submissions made by the appellant and other material placed on record. At the outset, it is seen that the appellant has filed return in response to notice u/s 148 wherein certain incomes have been claimed as non-taxable which were offered to tax in original and revised returns. This action of the appellant is not as per law on the issue as Hon'ble Supreme Court has long ago in its decision in case of CIT v Sun Engineering Works Pvt. Ltd. 198 ITR 297 has laid down that reassessment jurisdiction is available only to the AO and not to the assessee and the assessee in reassessment proceedings cannot claim that certain incomes originally declared as taxable are not taxable. Therefore, the AO has rightly considered the income returned in the revised return as starting point and not the income returned in response to notice u/s 147 of the Act. 10.2 I have also gone through copies of invoices pertaining to receipts from Jindal Steel and Power Ltd. and it is seen that receipt of 949,600 Euro (Rs. 5,27,63,546) pertains to supply of equipment for an Electric Arc Furnace. The other two receipts of 235,000 and 30,600 Euros amounting to Rs. 1,67,32,800 are regarding drawing and designs. The AO in his assessment order has not alleged that there existed any PE in India for the AY under consideration. Therefore, in view of Article 7(1) of Indo- Germany DTAA, business income from sale of equipment is not taxable in India. Similar treatment has been given by the AO to business receipts in AY 200708 also, as is seen from assessment order for AY 2007-08 a copy of which has been furnished by the appellant. Regarding receipts for drawings and designs from Jindal Steel and Power Ltd., the appellant has not explained how these receipts are different from similar receipts from other clients. Receipts for drawings and designs are in nature of fee for technical services (FTS) both u/s 9(1)(vii) of the act and Article 12 of Indo-Germany DTAA. It is pertinent to note that for taxation of FTS under Article 12 of DTAA, existence of PE in India is not required. Accordingly, I find no infirmity in action of the AO in bringing this sum to tax as FTS taxable on gross basis @ 10% as per DTAA. Accordingly, the AO is directed to give relief regarding Rs. 5,27,63,546 as discussed supra. The ground of appeal is partly allowed.” 10. Aggrieved with the above order, assessee is in appeal before us raising following grounds of appeal :- “1. That the order of learned Commissioner of Income-tax (Appeals) [CIT (A)) is bad both in law and on facts of the case. Printed from counselvise.com ITA No. 1591-1592/Del/2022 ITA No. 993 & 3297/Del/2023 ITA No. 377/Del/2025 MS Group Gmbh Page | 20 2. That the Ld. CIT (A) has erred in holding that the reassessment proceedings Initiated by Ld. A.O. are valid. 3. (a) That the learned CIT (A) has erred in law and on facts in holding that consideration received for supply of drawings and designs forming integral part of the supply of equipment, received under various contracts is taxable as \"Fees for Technical Services\". (b) That the learned CIT (A) has failed to appreciate that on the facts and material on record, the receipts constituted \"Business Profits\" not accruing, arising or received in India or deemed to accrue or arise or received in India. (c) That the learned CIT (A) has erred in not accepting that supply of drawings and designs was inextricably linked to sale of plant and equipment and represented consideration of the nature of 'Business Profits' not liable to tax in India, as per the provisions of DTA between India and Germany read with Indian Income-tax Act. (d) That the learned CIT (A) has grossly erred in law in ignoring and not following the ratio of jurisdictional High Court of Delhi in the case of Mitsui Engineering and Shipbuilding [174 CTR 66(Delhi)] and other decisions as relied upon by the assessee. 4. That the learned CIT(A) has erred in ignoring the decision of Hon'ble High Court of Delhi in the case of DIT Vs Jacabs Civil Inc and other High Courts and upholding the chargeability of interest under section 234B, not attracted on facts of the case. 5. That the assessee may be allowed to add, supplement, revise, amend grounds as raised hereinabove.” 11. At the time of hearing, ld. AR for the assessee brought to our notice relevant facts on record and he brought to our notice page 9 of the factual paper book which is the original return of income filed by the assessee wherein assessee has clearly disclosed that three invoices raised to Jindal Steel and Power Limited which assessee has not offered to tax and further he brought to our notice page 11 of the paper book which is the revised computation of total income filed for the purpose of revised return of income. He submitted that the assessee has not changed the declaration made with regard to transaction with Jindal Steel and Power Limited and assessee has declared the same as exempt and at the same time, he submitted that first two invoices of Euro 2,35,000 and 30,600 are relating to drawings and designs and with regard to third invoice of Euro 9,49,600 Printed from counselvise.com ITA No. 1591-1592/Del/2022 ITA No. 993 & 3297/Del/2023 ITA No. 377/Del/2025 MS Group Gmbh Page | 21 pertains to supply of machineries. He brought to our notice page 12 of the paper book which is a letter submitted before the AO dated 23.03.2006 in which the assessee has clearly disclosed the fact that two invoices referred in the return of income are relating to supply of designs and engineering for electrical ARC and the other invoice is relating to supply of equipment for electronic ARC. Further he brought to our notice page 15 of the paper book which is issued by the AO u/s 148 dated 28.03.2011 alongwith the reasons for reopening. The AO has mentioned the sum involved therein. He submitted that the sum mentioned in the reasons are Rs.31,11,699/- and he also brought to our notice page 19 of the paper book which is the annexure of the reasons to believe. The amount mentioned in page 19 and reasons to believe recorded are wrong and factually incorrect. He submitted that basis of reasons are factually incorrect. Accordingly, he brought to our notice page 25 of the paper book which is the decision of ITAT, Vishakhapatnam for AY 1992-93 wherein ITAT considered the facts on record and held by referring to the case of CIT v. Klayman Porcelains Ltd. (1988) 229 ITR 735 (AP) wherein Hon‟ble Andhra Pradesh High Court held that the design and documentation fees cannot be considered as royalty but is only to be considered as part of plant supplied from abroad. Further he brought to our notice pages 30 to 38 of the paper book wherein ITAT, Vishakhapatnam gave relief to the assessee on the similar ground. 12. Ld. AR for the assessee brought to our notice page 67 of the paper book which is the letter submitted by the assessee raising preliminary objections and brought to our notice relevant submissions made along with reliance of the decision of ITAT, Vishakhapatnam objecting to the reasons recorded for reopening the assessment. Further, he referred to page 1 of supplementary paper book, which are the submissions made before the ld. CIT (A) dated 19.11.2013 and he also brought to our notice page 2 of the assessment order and page 20 of the paper book which is the return of income filed in response to notice u/s 148 of the Act. He submitted that the assessee has rightly computed taxable income. He brought to our notice page 5 of the first appellate order and submitted that ld. CIT (A) has rejected the plea of the assessee wherein AO has made a reasoned observation that receipts for drawings and designs received from some clients is taxable then similar receipts from Jindal Steel and Power Limited should also be taxable and the assessee has wrongly taken these receipts as non-taxable. It was submitted that even if Printed from counselvise.com ITA No. 1591-1592/Del/2022 ITA No. 993 & 3297/Del/2023 ITA No. 377/Del/2025 MS Group Gmbh Page | 22 the AO has treated these receipts as FTS in reassessment order instead of treating them as business receipts as mentioned in the reasons recorded. However, ld. CIT (A) observed that it does not vitiate the reassessment proceedings because some receipts as mentioned in the reasons recorded has been brought to tax in the reassessment order though after characterizing them differently. 13. With regard to merits, ld. AR for the assessee brought to our notice the findings at page 8 of the appellate order and submitted that ld. CIT (A) even though gave partial relief on supply of equipment but he sustained the supply of designs and engineering drawings as taxable overlooking the fact that the issue under considered is settled as far as assessee is concerned and the ITAT, Vizag has already decided the issue that it will not fall under the term royalties. He submitted that findings of ld. CIT (A) is not as per precedent. 14. On the other hand, ld. DR for the Revenue relied on the findings of the lower authorities with regard to reopening as well as on merits. 15. Considered the rival submissions and material placed on record. We observed that the assessment for the current assessment year was processed u/s 143(1) of the Act and the AO while processing the assessment records observed that the assessee has not offered to tax certain receipts from Jindal Steel and Power Limited and he was of the opinion that the income escaped in this assessment year. He was of the view that assessee has offered to tax receipts from other parties whereas it has not offered to tax the receipts from Jindal Steel and Power Limited. Accordingly, he proceeded to reopen the assessment by recording the relevant reasons on record. Assessee before us raised the issue that the AO has wrongly recorded the reasons with the wrong sum of money and with the factually incorrect observation. After considering the facts on record, we observed that as per the information on record, the AO was of the opinion that there is substantial receipts not offered to tax by the assessee and accordingly, he reopened the assessment. Even though there is a small factual error, however the gross amount in terms of rupees mentioned in the reasons supplied to the assessee and the additions made in the assessment order are same. Therefore, we are not inclined to proceed with the objections raised by the assessee for reopening of the assessment. Printed from counselvise.com ITA No. 1591-1592/Del/2022 ITA No. 993 & 3297/Del/2023 ITA No. 377/Del/2025 MS Group Gmbh Page | 23 16. Coming to the issue on merits, we observed that the assessee has declared three invoices in its return of income as exempt from tax however when the case was reopened it has filed its return of income by bringing on record facts clearly and it was submitted before the AO as well as ld. CIT (A) that two invoices of Euro 2,35,000 and 30,500 relates to supply of drawings and designs to Jindal Steel and Power Limited and which is exempt from tax on the basis of ITAT, Vishakhapatnam decision which is in favour of the assessee (it is decided in the case of M/s. SMS Schloemann Siemag AG Germany vs. DCIT which is the sister concern of the assessee). With regard to third invoice of Euro 9,49,600, it was submitted before the ld. CIT (A) that it is relating to supply of equipment. We observed that ld. CIT (A) appreciated the above facts on record and deleted the addition made by the AO relating to supply of equipments. However, he did not consider the decision of ITAT, Vishakhapatnam relating to supply of drawings and designs as royalty/FTS and he proceeded to sustain the addition on the two invoices which assessee has not declared in their return of income. After considering the factual matrix on record, we observed that the ITAT, Vizag has considered the similar issue on record and decided the issue of supply of drawings and designs in favour of the assessee even though as royalties. However, the provisions of royalties and FTS are similar in nature, therefore, we are inclined to accept the submissions of the assessee and we direct the AO to delete the additions proposed in this case. 17. In the result, the grounds raised by the assessee on merits are allowed and other grounds are dismissed. Accordingly, the appeal filed by the assessee being ITA No.1073/Del/2014 is partly allowed. 18.The Revenue in the cross appeal for AY 2005-06 has taken various issues with regard to the deletion of addition of Rs.5,27,63,546/- out of total addition of Rs.6,94,96,346/- made by the Assessing Officer on account of consideration received by the assessee from M/s. Jindal Steel & Power Ltd. for supply of drawings and designs. This issue is decided by us in the assessee‟s appeal for AY 2005-06 as above which relates to supply of equipment, this can never form part of „FTS‟ and the same is decided in favour of the assessee. Accordingly, the grounds taken in the Revenue‟s appeal are rejected and the appeal filed by the Revenue is dismissed.” Printed from counselvise.com ITA No. 1591-1592/Del/2022 ITA No. 993 & 3297/Del/2023 ITA No. 377/Del/2025 MS Group Gmbh Page | 24 10. This tribunal‟s yet another coordinate bench in SMS Concast AG Vs. DDIT in ITA No. 1361/Del/2012, dated 16.06.2023, has further decided both these issues against the department as follows: “11. We have considered rival submissions in the light of decisions relied upon and perused the materials on record. The short issue arising for consideration is, whether the amount received by the assessee for supply of drawing and design is taxable as FTS in India. Insofar as the factual aspect of the issue is concerned, there is no dispute that the designs and drawings were made outside India in Switzerland and were supplied to the contractee from Switzerland. It is a fact that the sale transaction qua the drawings and designs was completed in Switzerland and amounts were received in Switzerland. It is also a fact on record that both the supply of equipments and supply of designs and drawings are in relation to a single project of the contractee, viz., 1 X 8 Strand Billet Caster for Long Product Plants required for contractee‟s project located in the state of Karnataka. 12. Materials on record reveal that the drawings and designs are in relation to basic engineering, which means, basic data as well as draft drawings, schematic drawings or layouts, diagrams, configuration and calculations necessary to design the equipment, structure and systems, as the case may be. It also includes, the necessary calculations, functional descriptions, final equipment list, preliminary bills of materials for media systems, line routing drawings, main cables routings, foundation outlines with load data, motors and components list. It also includes reference component drawings with reference bills of material where applicable. Details design consists of the final design engineering to procure or manufacture the equipment and plants. It means the detail design of the equipment includes all necessary calculations, arrangement drawings, detail drawings for manufacturing where applicable, bills of materials, engineering of electrical components as well as associated standard and catalogue parts, instructions for manufacturing, assembly, inspection and construction if applicable, spare part lists, operation and maintenance instructions as the case may be. 13. Thus, from the details of design and drawings as well as documentation submission, schedule of drawings and designs, it is quite clear that drawings and designs supplied by the assessee are specifically related to the supply of plant and equipments for the JSW Steel Project. Printed from counselvise.com ITA No. 1591-1592/Del/2022 ITA No. 993 & 3297/Del/2023 ITA No. 377/Del/2025 MS Group Gmbh Page | 25 13. On a reading of both the contracts, it is observed, though, the contracts have been separately executed, one for supply of plant and equipment and the other one for supply of drawings and designs, however, they have been executed on the very same date. One more crucial fact emerging from the drawing and design contract is, as per clause 17.1.1(iii), the purchaser is vested with the right to terminate the contract unilaterally, inter alia, due to the delay in delivery of the equipment in excess of 120 days for the reasons solely attributable to the seller and seller fails to take necessary remedial action. Thus, from the aforesaid condition imposed in the contract, it is very much clear that failure to supply plant and equipment within the stipulated time period can also determine the contract for supply of drawing and design and the purchaser can terminate the contract for supply of design and drawing in that eventuality. Thus, the aforesaid fact makes it clear that the contract for supply of drawings and designs is inextricably linked to the contract for supply of plant and equipment. 14. Undisputedly, though, the Assessing Officer has brought to tax the receipts from supply of plant and equipment by treating it as business profit of the assessee connected to the PE, however, learned first appellate authority has reversed the decision of the Assessing Officer by holding that since the plants and equipments were supplied from outside India and the sale transaction has concluded outside India, the receipts cannot be taxed in India. Admittedly, against the aforesaid decision of the first appellate authority, the Revenue is not in appeal. Thus, when the supply of plant and equipment has been treated as sale transaction completed outside India, hence, not taxable in India, the sale and supply of drawings and designs being inextricably linked to sale and supply of plant and equipment has to be considered cumulatively and as a part of sale and supply of plant and equipment. 15. In case of Linde Engineering Division Vs. DIT (supra), the Hon‟ble Jurisdictional High Court has observed that, in case, design and engineering are inextricable linked with the manufacture and fabrication of material and equipments to be supplied overseas and form an integral part of the supplies, then such services rendered would not be available to tax under section 9(1)(vii) of the Act as FTS. The Hon‟ble Court further held that in order to fall outside the scope of section 9(1)(vii) of the Act, the link between the supply of equipment and services must be strong Printed from counselvise.com ITA No. 1591-1592/Del/2022 ITA No. 993 & 3297/Del/2023 ITA No. 377/Del/2025 MS Group Gmbh Page | 26 and interlinked that the services in question are not capable of being considered as services on standalone basis and are, therefore, subsumed as a part of the supplies. In the facts of the present case, in our view, the supply of drawing and design cannot be considered on standalone basis as the purchaser could not have utilized such drawings and designs without the supply of plants and equipments. Even, it is not the case of the department that by purchasing the drawings and designs, the purchaser could have got the plants and equipments manufactured by a third party. Therefore, in our view, the ratio laid down by the Hon‟ble Jurisdictional High Court in the aforesaid decision squarely apply to the facts of the present appeal. 16. In case of CIT Vs. Andhra Petrochemicals Ltd. reported in [2015] 373 ITR 207, the Hon‟ble Andhra Pradesh High court has observed that different components of the contract cannot be read in isolation. Similar view has also been expressed by the Hon‟ble Delhi High Court in case of CIT Vs. Mitsui Engineering and Ship Building (supra). 17. Insofar as the decision of the Hon‟ble Karnataka High Court in case of AEG Aktiengesllshaft Vs. CIT (supra), in view of the ratio laid down by the Hon‟ble High Court in case of Linde Engineering Division Vs. DIT (supra), there is no need for much deliberation on the said decision. 18. At this stage, we must address some of the submissions made by learned Departmental Representative. Before us, learned Departmental Representative has submitted that the amount received for supply of drawings and designs is taxable in India, as, they have been delivered at Bangalore Airport and the seat of arbitration is in India. We do not find much substance in the said submission of learned Departmental Representative, as, in respect of the contract for supply of plant and equipment, as well, the delivery has been made at Chennai Airport and the seat of arbitration is also in India. Therefore, once the income from supply of plant and equipment is held to be not taxable in India, since, the sale transaction was completed outside India, the same logic applies even to the amount received from supply of drawings and designs. Thus, after considering the totality of facts and circumstances, we hold that the amount received by the assessee from supply of drawings and designs is not taxable in India as FTS. This ground is allowed. Printed from counselvise.com ITA No. 1591-1592/Del/2022 ITA No. 993 & 3297/Del/2023 ITA No. 377/Del/2025 MS Group Gmbh Page | 27 19. In ground no. 3, the assessee has challenged the taxability of Rs.5,56,822/-. As could be seen from the facts on record, the assessee received Euro 8,981 from rendition of supervisory services relating to erection and commissioning of Mormugao Steel Ltd. The assessee did not offer the income to tax in India claiming that the receipts are in the nature of business profit and in absence of PE in India, it is not taxable. The Assessing Officer, however, did not find merit in the submission of the assessee. He held that the receipts are in the nature of FTS under Article 12 of India Switzerland DTAA. Accordingly, he brought the amount to tax at the hands of the assessee. Learned first appellate authority also confirmed the addition. 20. Before us, learned counsel for the assessee submitted that as per the terms of the contract the assessee was required to provide duly qualified technical personnel for supervisory work and the consideration to be received for providing such personnel was fixed at daily rate. He submitted, fees for supervisory services being incidental to sale of plant do not fall within the ambit of Article 12 dealing with taxation of royalty and FTS. He submitted, the provision of such services is a normal part of contract of sale of plant to enable the supplier to ensure that the plant is properly erected, installed by the customer, keeping in view the performance guarantee obligation undertaken by it. He submitted, therefore, the amount is taxable as business profit, however, since, the tenure of supervisory services did not exceed the threshold limit of six months under Article 5(2)(j) of the treaty, there being no PE, amount is not taxable. 21. We have considered rival submissions and perused the materials on record. From the facts on record, it is observed, the assessee had entered into a contract for supply of electromagnetic stirrer. As per the scope of the contract, the assessee shall engineer, manufacture and deliver the plant and equipment. The scope of contract also included supervision, erection and commissioning of plant and equipment. As per assessee‟s own admission, technical personnel were deputed to supervise the erection and commissioning of the plant and equipment. Thus, it is quite clear, in course of such supervisory activity, the qualified technical personnel deputed by the assessee must have imparted technical services for erection and commissioning of the plant and equipment. Therefore, in our considered opinion, the amount received clearly falls within the definition of FTS, both under the domestic law as well as under the treaty provision. Once the Printed from counselvise.com ITA No. 1591-1592/Del/2022 ITA No. 993 & 3297/Del/2023 ITA No. 377/Del/2025 MS Group Gmbh Page | 28 receipts fall within the definition of FTS under Article 12(4) of the DTAA as well as the domestic law, it becomes immaterial whether the assessee has a PE in India or not. Therefore, in our view, the amount in dispute having qualified as FTS, has rightly been brought to tax at the hands of the assessee. This ground is dismissed. 22. In the result, the appeal is partly allowed.” Mr. Pardiwalla case accordingly is that both the learned lower authorities‟ impugned action assessing the assessee‟s income derived from sale of designs and drawings and sale of plants and equipments, deserves to be reversed in very terms in light of Ishikawajma-Harima Heavy Industries Ltd. Vs DIT [2007] 288 ITR 408 (SC)dealing with identical off-shore services. 11. Learned CIT(DR) on the other hand places vehement reliance on both the authorities‟ action holding the assessee‟s impugned receipts from sale of designs and drawingsas well as plant and machinery, as taxable in India. Mr. Basanta further seeks to buttress the pointthat in some of the instances, the assessee‟s designs and drawings do not even have a clear-cut nexus with the relevant projects executed in the assessment year(s) in question. 12. We find only a part merit in the Revenue‟s foregoing contentions. We make it clear that the earlier learned coordinate bench(es) hereinabove has already decided the issue of taxability of assessee‟s income, be it from sale of designs and drawings or off-shore sale of plant and machinery, against the department by quoting the corresponding adjudication right from AY 1992-93 onwards whilst holding that the impugned receipts are not taxable in India under the provisions of the Act. Coming to the Revenue‟s foregoing limited objection of reconciliation of the assessee‟s designs and drawings vis-à-vis, the corresponding projects (supra), we direct the learned Assessing Officer to re-verify its details as per law within three effective opportunities. We make it clear that it shall be the assessee‟s onus only to plead and prove the relevant facts in the consequential reconciliation. These assessee‟s third and fourth substantive grounds succeed in very terms. “ 10. In the instant case, the assessee had already bifurcated FTS portion taxable in India and paid due taxes in India. Hence we do not deem it fit to restore this issue to the file of ld AO for the aforesaid reason. However, the other observations made thereon by this Tribunal which are reproduced Printed from counselvise.com ITA No. 1591-1592/Del/2022 ITA No. 993 & 3297/Del/2023 ITA No. 377/Del/2025 MS Group Gmbh Page | 29 supra shall continue to govern the case in dispute before us. We find that the ld DRP had merely followed its own directions in assessee’s own case for AY 2015-16 qua the Ground Nos. 3 to 6 raised before us. Since the appeal for the said assessment year 2015-16 is already disposed of by the Tribunal by making aforesaid observations, we do not deem it fit to deviate from the said observations, except the short point of restoration to the file of ld AO as explained above. Further, we find that the coordinate bench of this Tribunal in assessee’s own case in ITA No. 1915 and 1073/Del/2014 for AY 2005-06 dated 06.01.2025 had also observed as under:- “16. Coming to the issue on merits, we observed that the assessee has declared three invoices in its return of income as exempt from tax however when the case was reopened it has filed its return of income by bringing on record facts clearly and it was submitted before the AO as well as ld. CIT (A) that two invoices of Euro 2,35,000 and 30,500 relates to supply of drawings and designs to Jindal Steel and Power Limited and which is exempt from tax on the basis of ITAT, Vishakhapatnam decision which is in favour of the assessee (it is decided in the case of M/s. SMS Schloemann Siemag AG Germany vs. DCIT which is the sister concern of the assessee). With regard to third invoice of Euro 9,49,600, it was submitted before the ld. CIT (A) that it is relating to supply of equipment. We observed that ld. CIT (A) appreciated the above facts on record and deleted the addition made by the AO relating to supply of equipments. However, he did not consider the decision of ITAT, Vishakhapatnam relating to supply of drawings and designs as royalty/FTS and he proceeded to sustain the addition on the two invoices which assessee has not declared in their return of income. After considering the factual matrix on record, we observed that the ITAT, Vizag has considered the similar issue on record and decided the issue of supply of drawings and designs in favour of the assessee even though as royalties. However, the provisions of royalties and FTS are similar in nature, therefore, we are inclined to accept the submissions of the assessee and we direct the AO to delete the additions proposed in this case. 17. In the result, the grounds raised by the assessee on merits are allowed and other grounds are dismissed. Accordingly, the appeal filed by the assessee being ITA No.1073/Del/2014 is partly allowed. Printed from counselvise.com ITA No. 1591-1592/Del/2022 ITA No. 993 & 3297/Del/2023 ITA No. 377/Del/2025 MS Group Gmbh Page | 30 18. The Revenue in the cross appeal for AY 2005-06 has taken various issues with regard to the deletion of addition of Rs.5,27,63,546/- out of total addition of Rs.6,94,96,346/- made by the Assessing Officer on account of consideration received by the assessee from M/s. Jindal Steel & Power Ltd. for supply of drawings and designs. This issue is decided by us in the assessee‟s appeal for AY 2005-06 as above which relates to supply of equipment, this can never form part of „FTS‟ and the same is decided in favour of the assessee. Accordingly, the grounds taken in the Revenue‟s appeal are rejected and the appeal filed by the Revenue is dismissed.” 11. Respectfully following the same, Ground Nos. 3 to 6 raised by the assessee are allowed. 12. Ground No. 7 raised by the assessee is with regard to challenging the action of the ld AO taxing the consideration of ₹47,153/- received towards supervision of erection and commissioning services for a period of less than six months as taxable in India as business income attributable to the PE in India both under the Act as well as in terms of Article 7 of India-Germany DTAA. 13. We have heard the rival submissions and perused the material available on record. The ld AR fairly submitted that this issue is to be decided against the assessee in view of the decision of the coordinate bench of this Tribunal in case of sister concern of assessee named SMS Concast A.G. vs DDIT in ITA 1361/Del/2012 for AY 2008-09 dated 16.06.2023. The relevant operative portion of the order is reproduced below:– “19. In ground no. 3, the assessee has challenged the taxability of Rs.5,56,822/-. As could be seen from the facts on record, the assessee received Euro 8,981 from rendition of supervisory services relating to erection and commissioning of Mormugao Steel Ltd. The assessee did not offer the income to tax in India claiming that the receipts are in the nature of business profit and in absence of PE in India, it is not taxable. The Assessing Officer, however, did not find merit in the submission of the assessee. He held that the receipts are in the nature of FTS under Article 12 Printed from counselvise.com ITA No. 1591-1592/Del/2022 ITA No. 993 & 3297/Del/2023 ITA No. 377/Del/2025 MS Group Gmbh Page | 31 of India Switzerland DTAA. Accordingly, he brought the amount to tax at the hands of the assessee. Learned first appellate authority also confirmed the addition. 20. Before us, learned counsel for the assessee submitted that as per the terms of the contract the assessee was required to provide duly qualified technical personnel for supervisory work and the consideration to be received for providing such personnel was fixed at daily rate. He submitted, fees for supervisory services being incidental to sale of plant do not fall within the ambit of Article 12 dealing with taxation of royalty and FTS. He submitted, the provision of such services is a normal part of contract of sale of plant to enable the supplier to ensure that the plant is properly erected, installed by the customer, keeping in view the performance guarantee obligation undertaken by it. He submitted, therefore, the amount is taxable as business profit, however, since, the tenure of supervisory services did not exceed the threshold limit of six months under Article 5(2)(j) of the treaty, there being no PE, amount is not taxable. 21. We have considered rival submissions and perused the materials on record. From the facts on record, it is observed, the assessee had entered into a contract for supply of electromagnetic stirrer. As per the scope of the contract, the assessee shall engineer, manufacture and deliver the plant and equipment. The scope of contract also included supervision, erection and commissioning of plant and equipment. As per assessee‟s own admission, technical personnel were deputed to supervise the erection and commissioning of the plant and equipment. Thus, it is quite clear, in course of such supervisory activity, the qualified technical personnel deputed by the assessee must have imparted technical services for erection and commissioning of the plant and equipment. Therefore, in our considered opinion, the amount received clearly falls within the definition of FTS, both under the domestic law as well as under the treaty provision. Once the receipts fall within the definition of FTS under Article 12(4) of the DTAA as well as the domestic law, it becomes immaterial whether the assessee has a PE in India or not. Therefore, in our view, the amount in dispute having qualified as FTS, has rightly been brought to tax at the hands of the assessee. This ground is dismissed.” 14. Respectfully following the same, the Ground No. 7 raised by the assessee is dismissed. Printed from counselvise.com ITA No. 1591-1592/Del/2022 ITA No. 993 & 3297/Del/2023 ITA No. 377/Del/2025 MS Group Gmbh Page | 32 15. Ground No. 8 raised by the assessee was stated to be not pressed by the AR at the time of hearing. The same is reckoned as a statement made from the Bar and accordingly dismissed as not pressed. 16. Ground No. 9 raised by the assessee is challenging the chargeability of interest u/s 234B and 234C of the Act. The chargeability of interest u/s 234B of the Act is consequential in nature. With regard to interest u/s 234C of the Act, the law is very well settled that same shall be charged only on the returned income and not on the assessed income. 17. Ground No. 10 raised by the assessee is challenging the initiation of penalty proceedings u/s 270A of the Act which would be premature for adjudication at this stage, hence, dismissed. 18. In the result, the appeal of the assessee for AY 2017-18 in ITA No. 1591/Del/2022 is partly allowed. ITA No. 1592/Del/2022 for AY 2018-19 (assessee‘s appeal). 19. Ground No. 1, 2 and 11 are general in nature and does not require any specific adjudication. 20. Ground Nos. 3 to 6 raised by the assessee for AY 2018-19 are identical to Ground Nos. 3 to 6 raised by the assessee for AY 2017-18. Hence, the decision rendered thereon for AY 2017-18 shall apply mutatis mutandis for AY 2018-19 also in view of identical facts, except with variance in figures. 21. Ground No . 7 raised by the assessee for AY 2018-19 is identical to Ground No. 8 raised by the assessee for AY 2017-18. Hence, the decision Printed from counselvise.com ITA No. 1591-1592/Del/2022 ITA No. 993 & 3297/Del/2023 ITA No. 377/Del/2025 MS Group Gmbh Page | 33 rendered thereon for AY 2017-18 shall apply mutatis mutandis for AY 2018- 19 also in view of identical facts, except with variance in figures. 22. Ground No. 8 raised by the assessee for AY 2018-19 is identical to Ground No. 9 raised by the assessee for AY 2017-18. Hence, the decision rendered thereon for AY 2017-18 shall apply mutatis mutandis for AY 2018- 19 also in view of identical facts, except with variance in figures. 23. Ground No. 9 raised by the assessee for AY 2018-19 is identical to Ground No. 10 raised by the assessee for AY 2017-18. Hence, the decision rendered thereon for AY 2017-18 shall apply mutatis mutandis for AY 2018- 19 also in view of identical facts, except with variance in figures. 24. In the result, the appeal of the assessee in ITA No. 1592/Del/2022 for AY 2018-19 is partly allowed. ITA No. 993/Del/2023 for AY 2020-21 (assessee’s appeal) 25. Ground Nos. 1 and 7 raised by the assessee are general in nature and does not require any specific adjudication. 26. The assessee has raised the following additional grounds of appeal before us which is reproduced as under:- “1. \"That on the facts and circumstances of the case, the learned AO/DRP has erred in subjecting to tax the amounts received towards supply of offshore drawing and design relating to plant & equipment aggregating to Rs. 20,89,59,664/- by arbitrarily attributing profits @ 10% and rejecting the ground for non-taxability of the same.\" 2. The assessee, an enterprise of Germany, had filed an appeal for A.Y. 2020-21 against the order of the AO/DRP dated 17th March 2023 before the Hon'ble Tribunal. In terms of Rule 11 of the Income-tax (Appellate Tribunal) Rules, the assessee prays for admission of the above additional ground. Printed from counselvise.com ITA No. 1591-1592/Del/2022 ITA No. 993 & 3297/Del/2023 ITA No. 377/Del/2025 MS Group Gmbh Page | 34 3. The assessee had made a claim for non-taxability of consideration amounting to Rs. 20,89,59,664/- representing supply of drawings and designs linked to the supply of equipment under various contracts entered into by the assessee. Such consideration was always claimed as non-taxable in all the preceding years. However, A.O. had taxed the same @ 10% on gross amount in the preceding years, holding the same to be \"Fees for Technical Services\". 4. In all the earlier years, the assessee had disputed the taxability of such consideration. The Hon'ble Tribunal was pleased to accept the claim of non- taxability of such consideration in the Assessment Years 2005-06 (ITA No. 1073/DEL/2014 vide order dated 6th January 2025) and in Assessment Years 2007-08 to 2016-17 (ITA No. 5580/Del./2011 for A.Y. 2008-09) vide Appellate Order dated 09th April 2025. 5. During the relevant year, learned A.O. treated such receipts as \"Business Profits\" and attributed profit @ 10% and subjected the same to tax accordingly. 6. During the relevant year, the assessee had inadvertently omitted to take the ground for non-taxability before the Hon'ble Tribunal in the appeal as filed. 7. The above proposed ground raises a pure question of law and is admissible as it can be adjudicated on the basis of material on record and admitted facts already discussed in the orders of lower authorities and no fresh evidence is necessary.” 27. These additional grounds go to the root of the matter and had been omitted to have been raised in the original grounds of appeal, even though the same was already subject matter of adjudication by the lower authorities. Since, the fact relevant for its adjudication are already on record and also considering the fact that the very same issue was disputed in the earlier years by the assessee, we are inclined to admit these additional grounds raised by the assessee. The aforesaid additional grounds and original Ground Nos. 3 and 4 raised by the assessee are identical to Ground Nos. 3 to 6 raised by the assessee for AY 2017-18. Hence, the decision rendered by us for AY 2017-18 shall apply mutatis mutandis for AY 2020-21 also in view of identical facts, except with variance in figures. Printed from counselvise.com ITA No. 1591-1592/Del/2022 ITA No. 993 & 3297/Del/2023 ITA No. 377/Del/2025 MS Group Gmbh Page | 35 28. With regard to chargeability of interest u/s 234A of the Act, the ld AO is directed to verify the due date of filing of return as extended from time to time by the CBDT for the year under consideration and decide whether the assessee is liable for levy of interest u/s 234A of the Act. The ld AO is directed accordingly. The interest u/s 234B of the Act is consequential in nature. With regard to interest u/s 234C of the Act, the law is very well settled that the same shall be charged only on the returned income and not on the assessed income. The Ground No. 5 raised by the assessee is disposed of accordingly. 29. Ground No. 6 raised by the assessee for AY 2020-21 is identical to Ground No. 10 raised by the assessee for AY 2017-18. Hence, the decision rendered thereon for AY 2017-18 shall apply mutatis mutandis for AY 2020- 21 also in view of identical facts, except with variance in figures. 30. In the result, the appeal of the assessee in ITA No. 993/Del/2023 for AY 2020-21 is partly allowed. ITA No. 3297/Del/2023 for AY 2021-22 (assessee’s appeal) 31. The Ground Nos. 1, 2 and 9 raised by the assessee are general in nature and does not require any specific education. 32. Ground Nos. 3 and 4 raised by the assessee are identical to Ground Nos. 3 to 6 raised for AY 2017-18. Hence, the decision rendered by us for AY 2017-18 shall apply mutatis mutandis for AY 2021-22 also in view of identical facts except with variance in figures. 33. Ground No. 6 raised by the assessee is identical to Ground No. 7 for AY 2017-18. Hence, the decision rendered by us for AY 2017-18 shall apply Printed from counselvise.com ITA No. 1591-1592/Del/2022 ITA No. 993 & 3297/Del/2023 ITA No. 377/Del/2025 MS Group Gmbh Page | 36 mutatis mutandis for AY 2021-22 also in view of identical facts except with variance in figures. 34. Ground No. 7 raised by the assessee was stated to be not pressed by the ld AR at the time of hearing. The same is reckoned as a statement made from the Bar and accordingly dismissed as not pressed. 35. Ground No. 5 raised by the assessee is challenging the action of the lower authorities in rejecting the loss declared as per audited books of account and applying the profit margin of 17.48% for AY 2020-21, instead of loss as claimed amounting to ₹22,60,453/- ignoring the accepted position in previous years and the directions of the ld DRP. 36. We have heard the rival submissions and perused the material available on record. The ld AO noted that the assessee had received receipts that accrue or arose in India and they are out of service related receipts and receipts from supply of equipment which are tabulated below:- Total Service receipts Amount (Rs.) Onshore Technical Service Rs. 9,39,12,608/- Offshore Drawing & design Rs. 20,04,68,401/- Onshore supervision services Rs. 13,65,81,512/- |Onshore supervision services where period of activity is less than six months Rs. 31,64,591/- Reimbursement of SAP & other services Rs. 5,84.51,900/- Total Rs. 49,25,79,012/- 37. The ld AO estimated the net profit @ 25% as attributable to the PE and arrived at the profit of ₹12,31,44,753 (25% of ₹49,25,79,012). With regard to supply of equipment, the ld AO estimated profit @3% as arm’s- Printed from counselvise.com ITA No. 1591-1592/Del/2022 ITA No. 993 & 3297/Del/2023 ITA No. 377/Del/2025 MS Group Gmbh Page | 37 length profit margin and arrived at the profit of Rs. 3,89,81,329 (3% of ₹196,60,44,298). It is pertinent to note that the return of income for AY 2021-22 was filed by the assessee on 10.03.2022 declaring total income of ₹9,21,81,773. The assessee raised objection before the ld DRP stating that assessee had shown loss amounting to ₹22,60,453/- as per its audited books of account in respect of activity of supervision of erection and commissioning and hence adoption of profit margin @25% is incorrect. The ld DRP disregarding the objections of the assessee merely followed its own directions given for AY 2017-18 by giving direction to the ld AO to follow the directions qua each of the objections of the assessee, considering the various details provided by the assessee. The ld AO in the final assessment order adopted profit percentage @17.48% as per audited books of account for AY 2017-18 and brought to tax the receipts on account of supervision of erection and commissioning services, ignoring the fact that assessee had loss of ₹22,60,453/- as per audited books of account on this activity. We find that absolutely no reasons were given by the ld AO to reject the books of account of the assessee and adopt the profit percentage for AY 2017-18, which is certainly not in accordance with the direction given by the ld DRP. Admittedly, in the instant case, the supervisory activity was more than six months. Hence the existence of PE is established beyond reasonable doubt. Accordingly, the income of the PE qua this activity is to be determined as per Article 7 of the India-Germany DTAA and not as per Article 12 of the treaty. Since, we have already held that income of the PE is to be computed as per Article 7, the income is to be obviously assessed only on net basis. As stated earlier, since no reasons were reduced by the AO for rejecting the book results of the assessee, the profit attributed to the PE in respect of supervision of erection and commissioning services is to be determined based on the audited books of account. Since, there is a loss as Printed from counselvise.com ITA No. 1591-1592/Del/2022 ITA No. 993 & 3297/Del/2023 ITA No. 377/Del/2025 MS Group Gmbh Page | 38 per audited books of account, no income is to be brought to tax thereon own qua this activity. Accordingly, Ground No. 5 raised by the assessee is allowed. 38. Ground No. 8 raised by the assessee is challenging the chargeability of interest u/s 234B and 234C of the Act. The chargeability of interest u/s 234B of the Act is consequential in nature. With regard to interest u/s 234C of the Act, the law is very well settled that same shall be charged only on the returned income and not on the assessed income. 39. In the result, the appeal of the assessee in ITA No. 3297/Del/2023 for AY 2021-22 is Partly allowed. ITA No. 377/Del/2025 for AY 2022-23 (assessee’s appeal) 40. Ground Nos. 1, 2 and 8 raised by the assessee are general in nature and does not require any specific adjudication. 41. Ground No. 3, 4, 5 and 6 raised by the assessee for AY 2022-23, identical to Ground Nos. 3 to 6 and 8 raised by the assessee for assessment 2017-18. Hence, the decision rendered by us thereon for AY 2017-18 supra shall apply mutatis mutandis for AY 2022-23 also in view of identical facts, except with variance in figures. 42. Ground No. 7 raised by the assessee is challenging the chargeability of interest u/s 234B and 234C of the Act. The chargeability of interest u/s 234B of the Act is consequential in nature. With regard to interest u/s 234C of the Act, the law is very well settled that same shall be charged only on the returned income and not on the assessed income. Printed from counselvise.com ITA No. 1591-1592/Del/2022 ITA No. 993 & 3297/Del/2023 ITA No. 377/Del/2025 MS Group Gmbh Page | 39 43. In the result, the appeal of the assessee is partly allowed in ITA No. 377/Del/2025 for AY 2022-23. 44. To sum up, all the appeals of the assessee are partly allowed. Order pronounced in the open court on 24/12/2025. -Sd/- -Sd/- ` (VIMAL KUMAR) (M. BALAGANESH) JUDICIAL MEMBER ACCOUNTANT MEMBER Dated: 24/12/2025 A K Keot Copy forwarded to 1. Applicant 2. Respondent 3. CIT 4. CIT (A) 5. DR:ITAT ASSISTANT REGISTRAR ITAT, New Delhi Printed from counselvise.com "