TaxTMI 
TaxTMI 
2023 (7) TMI 805
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.... 4,42,58,223/-. The case of the assessee was selected for scrutiny assessment and an assessment order was passed on 18.12.2019 under section 143(3). It is a very brief assessment order, therefore, we deem it appropriate to take note of the complete order, which reads as under:- 4. The ld. Commissioner perused the record and order of the ld. Assessing Officer, thereafter formed an opinion that the assessment order is erroneous as much as it caused a prejudice to the interest of the revenue. Hence, it required revision by exercising the powers under section 263. Accordingly ld. Commissioner has issued a notice dated 11.01.2022, copy of this notice has been placed on page no. 271 of the paper book. It reads as under:- 5. The assessee filed written submission, which has been reproduced by the ld. CIT and thereafter ld. CIT passed the impugned order on 30.03.2022. 6. Brief facts giving rise to this proceeding are that the assessee entered into an agreement with Brahmaputra Cracker and Polymer Limited (BCPL) on 18.03.2009, vide which licence for manufacture of linear polyethylene in Assam and its sale across the world. Under this agreement, the assessee granted licence and the n....
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.... 142(1) of the Income Tax Act dated 24.10.2019 is placed on record. In response to this show-cause notice, the assessee has filed submission dated 15.11.2019 and the copy of this submission is placed on pages no. 4 to 8 of the paper book. He further submitted that the ld. Assessing Officer has again issued notices under section 142(1) on 19.11.2019 and 02.12.2019. These two notices were also replied by the assessee. The stand of the assessee was that the receipt was in the nature of supervisory services under this head. The assessee has not made available the technical knowledge, experience, skill, knowhow or processes. Therefore, under Article 13 of India-UK Treaty, the fees received for providing such services, where technology was not made available that would not fall within the concept of FTS, i.e. fees for Technical Services. The assessee has filed a note, which is available on pages no. 5 to 7 of the paper book. It relied upon the judgment of ITAT, Mumbai in the case of Raymond Limited -vs.- DCIT (86 ITD 791) and the decision of the Hon'ble Karnataka High Court in the case of CIT -vs.- De Beers India Minerals (P) Limited (2012) 21 taxmann.com 214. Though the ld. Assessing Of....
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....anation.- For the removal of doubts, it is hereby declared that, for the purposes of this sub-section,- (a) an order passed on or before or after the 1st day of June, 1988 by the Assessing Officer shall include- (i) an order of assessment made by the Assistant Commissioner or Deputy Commissioner or the Income Tax Officer on the basis of the directions issued by the Joint Commissioner under section 144A; (ii) an order made by the Joint Commissioner in exercise of the powers or in the performance of the functions of an Assessing Officer conferred on, or assigned to, him under the orders or directions issued by the Board or by the Chief Commissioner or Director General or Commissioner authorized by the Board in this behalf under section 120; (b) "record shall include and shall be deemed always to have included all records relating to any proceeding under this Act available at the time of examination by the Commissioner; (c) where any order referred to in this sub-section and passed by the Assessing Officer had been the subject matter of any appeal filed on or before or after the 1st day of June, 1988, the powers of the Commissioner under th....
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....sioner may annul the order of the Assessing Officer. He may enhance the assessed income by modifying the order. He may set aside the order and direct the Assessing Officer to pass a fresh order. At this stage, before considering the multi-fold contentions of the ld. Representatives, we deem it pertinent to take note of the fundamental tests propounded in various judgments relevant for judging the action of the CIT taken u/s 263. The ITAT in the case of Mrs. Khatiza S. Oomerbhoy Vs. ITO, Mumbai, 101 TTJ 1095, analyzed in detail various authoritative pronouncements including the decision of Hon'ble Supreme Court in the case of Malabar Industries 243 ITR 83 and has propounded the following broader principle to judge the action of CIT taken under section 263. (i) The CIT must record satisfaction that the order of the AO is erroneous and prejudicial to the interest of the Revenue. Both the conditions must be fulfilled. (ii) Sec. 263 cannot be invoked to correct each and every type of mistake or error committed by the AO and it was only when an order is erroneous that the section will be attracted. (iii) An incorrect assumption of facts or an incorrect applicat....
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....ges. The relevant part reads as under:- "7. TECHNICAL ASSISTANCE In this Agreement, "Mandatory Services" shall mean: (i) review of Licensee's documents referred to in Clause 7.1; (ii) attendance at equipment vendors' premises in accordance with Clause 7.2.1; (iii) mechanical installation check and pre-commissioning safety audit of the Plant referred to in Clause 7.2.2.1; (iv) assistance with pre-commissioning and commissioning of the Plant referred to in Clause 7.2.2.2; (iv) attendance at and assistance with carrying out PGTRs and transition Tests at the Plant in accordance with Clause 7.2.2.3 and Clause 8. 7.1. In consideration of the fee paid by Licensee under Clause 3.4.1, the Licensor shall provide to Licensee the following Mandatory Services: 7.1.1. Licensee shall provide to Licensor five (5) copies and one (1) editable electronic copy in English of each document listed in the Eighth Schedule and Licensor shall, at no additional cost to Licensee, promptly review Licensee's documents for compliance with the BDEP, return comments (if any) to Licensee within fifteen (15) working days of r....
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...., India (including the Plant). 7.4. Before commencement of commissioning Licensor and Licensee will each appoint a leader of their respective commissioning groups (Licensor/Licensee Representatives).x x x x x x x x x x x 13. A perusal of the above clauses of the Agreement would indicate that basically these fees were charged for review of licencee's documents, attendance at the equipment vendors' premises in accordance with clause 7.2 and so on. During the course of hearing, we put a question to the ld. Counsel for the assessee, whether this service is an independent service as a stand-alone. We also enquired how this service alone can be performed by the assessee without entering into this complete agreement. The reply of the ld. Counsel for the assessee was in negative. Therefore, these clauses if read into clauses starting from the Article 3, then, would reveal that it is a fee for one part from the composite contract and it cannot be segregated. This service was not being provided on a item which can be consider as stand alone item even without availability of this agreement. 14. As far as the first-fold of submission of the ld. Counsel for the assessee is concer....
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....NCOME TAX DEPARTMENT OFFICE OF THE ASSISTANT COMMISSIONER OF INCOME TAX CIRCLE 1(2),IT, KOLKATA To, INEOS COMMERCIAL SERVICES UK LIMITED CHAPEL LANE HAWKSLEASE,CHAPEL LANE HAMPSHIRE LYNDHURST, FOREIGN United Kingdom PAN: AACC17840R Name of the assessee Address of the assessee Status Range/Circle/Ward AY: Order No: 2017-18 ITBA/AST/S/143(3)/2019-20/1022610146(1) Resident/Resident but not Ordinary resident/ Non-resident Date of Hearing Dated: 18/12/2019 INEOS COMMERCIAL SERVICES UK LIMITED CHAPEL LANE HAWKSLEASE, CHAPEL LANE HAMPSHIRE, LYNDHURST, FOREIGN, United Kingdom COMPANY CIRCLE 1(2),IT, KOLKATA Non-Resident TAX 22/08/2018 Section/Sub-section under which assessment is made Date of Order 22/08/2018, 09/09/2019, 31/10/2019, 15/11/2019, 25/11/2019 143(3) 18/12/2019 ASSESSMENT ORDER Assessment Order u/s 143 (3) of Income Tax Act. The assessee has filed the Return of Income on 31/10/2017 declaring total income of Rs.4,42,58,223/-. The return was processed u/s 143 (1) of Income Tax Act 1961 by CPC on 25/03/2019 accepting return income. The case was selected....
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....e to submit your representation, if any alongwith supporting documents/information in support of the issues involved (as mentioned below). If you wish that the Revision proceeding be concluded on the basis of your written submissions/representations filed in this office, on or before the said due date, then your personal attendance is not required. You also have the option to file your submission from the e-filing portal using the link: incometaxindiaefiling.gov.in 2. MENT With reference to the above, this is a notice u/s 263 of the Income tax Act, 1961 for the purpose of revision of assessment order made in the case of the above named assessee u/s 143(3) dated 18/12/2019 for Assessment Year 2017-18 by the Assistant Commissioner of Income tax (International Taxation), Circle-1(2), Kolkata. 3. The order u/s. 143(3) of the I.T. Act, 1961 was passed in the case of the above named assessee for the Assessment Year 2017-18 on 18/12/2019. In the return of income, the assessee declared total income at Rs. 4,42,58,223/-for the previous year 2016-17 relevant to Assessment Year 2017-18. The case was selected for scrutiny through CASS. The detail....
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.... development and transfer of a technical plan or technical design. In the explanation furnished by the assessee, the definition of fees for technical services has been explained only as per 4(c), ignoring the definitions as per 4(a) and 4(b) of Article 13 of the DTAA. It is further observed that all the payments received from BCPL were related to an agreement entered into between the assessee and BCPL on 18/03/2009. The agreement was towards Lincence for manufacture of linear ploythyelene in Assam, India and its sale throughout the world. The agreement categorically stipulated that the assessee had the right to grant licences under patents and rights of valuable confidential information on a process (Innovene Process) for the manufacture of linear polylene and was willing to grant licences and right of BCPL for the design, procurement, construction and operation of the plant in Assam, India for manufacture of linear polythylene and by the aforesaid process. Thus, the assessee, through the agreement, was granting BCPL licences under Licensor Patents. It is mentiond here, that as per paragraph 3(a) of Article 13 of DTAA, which is relevant ....