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2019 (4) TMI 1428
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....nst the order of the CIT(A). 2. Since the underlying facts in issues in all the five appeals are common and were heard together, they are being disposed off by this common order for the sake of convenience and brevity. 3. The common grievances of the assessee can be summarised as under: (i) Royalty Vs. Business Income; (ii) Fees for Technical Services [FTS] or business profits; (iii) Attribution of Income and allowance of expenses incurred by the Head Office; and (iv) Transit Office Facility Expenses. 4. The common grievance of the Revenue relates to the direction of the CIT(A) that interest u/s 234B of the Income-tax Act, 1961 [hereinafter referred to as 'the Act']. is not chargeable. ....
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....ouble Taxation Avoidance Agreement [DTAA]. 9. During the year under consideration, the assessee company had participated in the following projects:- (i) Chennai Water Supply Augmentation Project; (ii) Iron Ore Slurry Pipeline Project; and (iii) Baroda-Ahmadabad Kalol Pipeline Project. 10. As mentioned elsewhere, the assessee has bifurcated its income as Royalty Income of the head office which was offered to tax on gross basis under Article 12 of the DTAA between India and Russia. As such, Royalty Income from Chennai, Trichy and Madurai Project, Iron Ore Slurry Pipeline and the Baroda Ahmadabad Kalol Project amounting to Rs. 63,060,996/- was offered to tax @ 10% on gross basis. 11. The branch office income....
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....tation of oil and industry projects which included design and construction of pipeline systems which included facilities for oil and gas production, oil and gas underground storage facilities, construction, modernization and renovation of mainline and booster compressor stations and other field facilities, exploration, development and operation of oil and gas fields, manufacturing of equipment and other industrial products. 14. The ld. AR further submitted that Reserve Bank of India [RBI] approval specifically prohibits the Branch Office to undertake any project execution in India. The ld. AR further stated that the revenue authorities have not tried to understand the industry and without appreciating how the pipeline business works, the....
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....ing and preparation of data sheets, specifications etc for procurement and construction. The total scope of IOCL has been agreed as Rs. 3.9 crores. 20. The appellant company will provide project management services for this project and will depute five specialists' manpower with appropriate experience for execution of this project and finally for the commissioning of the Gas Pipeline to the satisfaction of the client GSPL. It was agreed that the appellant shall get US dollar 405.840 for sending specialist manpower which shall be payable as per the monthly rate per specialist already agreed for the actual month the specialists are deployed. It was further agreed that the appellant would be further paid for the technical expertise and tech....
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....same into royalty income of the head office and fees for technical services for its branch office. 24. The fact of the matter is that the appellant company has received its share from the projects executed during the year under consideration. The decisions relied upon by the ld. AR are clearly distinguishable on facts and need no special mention. 25. To sum up, being a member of consortium, the appellant company cannot pay royalty to itself and, therefore, the share received from the execution of the three projects is business profit of the appellant company. Since there is no transfer of any technical know-how and even if the services are rendered in India by the head office and not by the branch office, then also, the revenue of the....
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....ssian Embassy as cost of accommodation to the Russian Employees. But the least the appellant company could have provided is the confirmation from Russian Embassy itself. We, therefore, allow one more opportunity to the appellant company to furnish the confirmations from the Russian Embassy in this regard. Ground Nos. 12 to 14 are treated as allowed for statistical purposes. All other grounds are dismissed. The appeals of the assessee are partly allowed for statistical purposes. 29. The solitary grievance of the Revenue is that the CIT(A) erred in directing that interest u/s 234B of the Act is not chargeable in this case. 30. This issue is covered in favour of the assessee and against the Revenue by the judgment of the Hon'ble J....