TaxTMI 
TaxTMI 
2023 (4) TMI 1040
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....d and Fifty only) against the nil income shown in the return. 2. Whether on the facts and in the circumstances of the case, the assessing officer/DRP is justified in holding that the Appellant is not entitled to benefit of CBDT circular no. 07/2016 dated March 07, 2016 when all the conditions mentioned in the circular were satisfied by the Appellant and the Appellant was entitled to such benefit. 3. Whether on the facts and in the circumstances of the case, the assessing officer/DRP is justified in holding that the three contracts entered into by the JV of the Appellant and SPL are in fact a single composite contract and not separate contracts, especially when the Appellant and SPL are independent parties having no relation or association with each other and have come together only for the instant contract. 4. Whether on the facts and in the circumstances of the case, the Assessing Officer/DRP is justified in holding that the Appellant is responsible not only for the offshore supplies but also for execution of onshore services. 5. Whether on the facts and in the circumstances of the case, the Assessing Officer/DRP is justified in holding that the....
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.... the profit of the PE taxable in India, especially when the receipts from offshore supplies during FY 2016-17 are only Rs. 31,40,83,9371-(Thirty One Crores Forty Lakhs Eighty Three Thousand Nine Hundred and Thirty Seven only). 12. Whether on the facts and in the circumstances of the case, the 'assessing officer is justified in holding that profit of Rs. 14,33,52,561/- Rupees Fourteen Crores Thirty Three Lakhs Fifty Thousand Five Hundred and Sixty One only) has been earned by the PE of the Appellant out of total onshore services receipts held attributable to the PE of Appellant by the DRP and therefore holding no expenditure has been incurred to earn such profit, especially when there is no evidence available of any onshore services being rendered by the Appellant. 13. Whether on the facts and in the circumstances of case, the assessing officer is justified in initiating penalty proceedings under Section 274 read with Section 270A of the IT Act. 14. The Appellant craves liberty to add, amend. alter, modify and/or delete any of the grounds of appeal in its hearing before your honor. 2. The assessee has raised the following additional grounds: ....
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....udice to the merits of the matter, the matter ought to be remanded back to the LD. AO to determine the proper computation of the additional/demand in light of the above additional grounds. 3. However, the basic grievance of the assessee is against the directions of learned DRP on wrong assumption of facts. Briefly the facts are, the assessee is a non-resident corporate entity, incorporated under the laws of Peoples Republic of China and a tax resident of China. For the assessment year under dispute, the assessee filed its return of income on 29.03.2018 declaring nil income. In the year 2014, M/s. Power Grid Corporation of India Ltd. (PGCIL) invited bids for supply and installation of fiber optic cable in Northern region, Andhra Pradesh and Telangana. Being interested to participate in the bid and considering that it has no presence in India, the assessee entered into a joint venture with an Indian entity, namely, M/s. Steel Products Limited (SPL) to participate in the bid. Ultimately, the joint venture became successful in the bid. Considering the fact that it may not be viable for the officials of the assessee to travel to India in order to file/execute the requisite tender doc....
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....nd sold outside India. The Assessing Officer, however, was not convinced with the submissions of the assessee. He observed, though, the contracts are composite, however, they have been artificially split into three different contracts. Thus, he held that total consideration received under the contracts is to be treated as composite consideration. He observed, the total work involves a proportionate fee of technical services and consideration for supply of equipments. According to him, the equipment supply from China involves an element of technical services embedded into the contract. Based on the aforesaid conclusion, he divided the total consideration into two parts by attributing 40% towards fee for technical services and 60% towards supply of equipment. Accordingly, out of the total consideration, he treated an amount of Rs.33,15,91,950/- as FTS. Having held so, he found that out of the aforesaid amount treated as FTS, the Indian partner has paid taxes on an amount of Rs.28,67,05,122/-. Therefore, according to him, the taxable FTS at the hands of the assessee is to the tune of Rs.4,48,86,828/-. Further, considering assessee's submission that it follows cash system of accounting....
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....nt order, the Assessing Officer has given a categorical factual finding that in the year under consideration, the assessee had received an amount of Rs.31.40 crores for offshore supplies. Whereas, in respect of onshore service, the Assessing Officer has given a finding that the Indian partner, i.e., SPL has paid taxes on an amount of Rs.28.67 crores. He submitted, ignoring all these facts, learned DRP has directed the Assessing Officer to attribute 25% of the entire offshore contract value of Rs.54.22 crores as attributable to PE. Similarly, even though, the assessee had not received any amount out of Rs.28.67 crores, the DRP has directed to attribute 50% of such amount to the assessee to demonstrate that the assessee has not received any amount for onshore services. In this regard, learned counsel drew our attention to a copy of the undertaking furnished by SPL stating that it had performed the entire services under the onshore contract without the involvement of the assessee and had duly offered to tax the amount of Rs.28.67 received towards such contract. Thus, he submitted, as the DRP has not appreciated the facts properly, the directions given are legally unsustainable and mat....
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....isconceived facts and ignoring the factual finding of the Assessing Officer has directed the Assessing Officer to attribute 25% of the offshore supply contract receipts of Rs.54,22,74,752/-, though the assessee had received an amount of Rs.31.40 crores in the year under consideration. Similarly, in respect of onshore services and maintenance contracts the Assessing Officer in the draft assessment order has given a clear factual finding that the Indian partner, namely, SPL has offered an amount of Rs.28,67,05,122/- to tax and had excluded the said amount from being taxed at the hands of the assessee. In fact, in an undertaking given by SPL, a copy of which is placed in the paper book, the aforesaid factual position is well demonstrated. However, ignoring such vital piece of evidence and facts brought on record and forming part of the draft assessment order, learned DRP has directed the Assessing Officer to apportion 50% of the said amount to the assessee and which shall be attributed to the PE of the assessee. Thus, the aforesaid facts clearly reveal that learned DRP has completely misconceived the facts, accordingly, decided the objections of the assessee with improper application ....