Taxpayer's appeals dismissed, Revenue's appeals infructuous. Interest levy under Income Tax Act deleted.

The taxpayer's appeals were dismissed as withdrawn, except for one ground in a specific appeal for a particular assessment year, which was allowed. The Revenue's appeals were dismissed as infructuous. The Tribunal clarified that the Revenue could restore its appeals if needed in the future. The levy of interest under section 234B of the Income Tax Act on the taxpayer was deemed unsustainable and was ordered to be deleted.

---

---

Issues Involved:
1. Settlement of disputes under Mutual Agreement Procedure (MAP).
2. Withdrawal of appeals based on MAP settlement.
3. Levy of interest under section 234B of the Income Tax Act.

Detailed Analysis:

1. Settlement of disputes under Mutual Agreement Procedure (MAP):
The taxpayer, M/s. Raytheon Company, and the Revenue filed cross appeals concerning various assessment years. The taxpayer moved an application for MAP before the Competent Authority in the USA, which resulted in a settlement. The Indian Competent Authority confirmed this settlement on 02.03.2021. The principles adopted for the settlement included assuming a Permanent Establishment (PE) in India for the taxpayer and attributing business profits to this PE, taxing them at 30% of profits after applying the global profit margin to contract receipts. Specific contract revenues from software were characterized as royalties not attributable to the PE.

2. Withdrawal of appeals based on MAP settlement:
The taxpayer sought to withdraw all its appeals and requested the dismissal of the Revenue's appeals as they became infructuous due to the MAP settlement. The Revenue's representative contended that procedural formalities needed to be completed before consenting to the withdrawal. However, the Tribunal noted that all issues raised by both parties were settled under MAP, and keeping the appeals alive for procedural formalities was unnecessary. The Tribunal emphasized that procedural technicalities should not hinder justice and that the CIT DR should assist the Bench in the interest of speedy litigation disposal.

3. Levy of interest under section 234B of the Income Tax Act:
The taxpayer challenged the levy of interest under section 234B, arguing that it had no advance tax liability as a non-resident company with tax deducted at source on all payments. The Tribunal referenced the Delhi High Court's judgment in GE Packaged Power Inc., which held that non-resident companies with tax deducted at source are not liable for advance tax, and thus, interest under section 234B is not applicable. The Tribunal concluded that the levy of interest under section 234B on the taxpayer was not sustainable and ordered its deletion.

Conclusion:
All appeals filed by the taxpayer were dismissed as withdrawn, except for ground no.22 in ITA No. 5222/Del/2010 for AY 2007-08, which was allowed. The cross appeals filed by the Revenue were dismissed as infructuous. The Tribunal clarified that the Revenue could restore its appeals if required in the future. The order was pronounced in open court on 31st March 2021.

---