TaxTMI 
TaxTMI 
TaxTMI 
2023 (11) TMI 192
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....f receipts from engineering services as royalty. 3. Briefly, the facts are, the assessee, earlier known as Bombardier Transportation Signal (Thailand) Limited, is a non-resident corporate entity, incorporated under the laws of Thailand and a tax resident of Thailand. As stated by the Assessing Officer, the assessee is engaged in the business of manufacturing of train control and signalling systems for mass transit system. The assessee formed a consortium with Bombardier Transportation India Limited (BTIN) and entered into a contract with Delhi Metro Rail Corporation (DMRC) on 05.09.2013 for design, manufacture, supply, installation, testing and commissioning of train control and signalling system. In terms with the contract, the assessee made offshore supply of goods and equipments to DMRC from outside India. During the year under consideration, the assessee had received an amount of Rs. 21,02,08,336/- on such supply. The assessee did not offer such receipts to tax in India claiming that the transfer of title in goods have passed to DMRC outside India and the assessee had no PE in India. The Assessing Officer, however, was not convinced to the submissions of the assessee. He obser....
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....tended the assessment proceedings from time to time and filed necessary information and details. Written submissions and documents were considered. The case was discussed with the authorised representatives of the assessee. 2. The assessee company is registered and incorporated under the laws of Thailand and engaged in the business of manufacturing and supply of train signaling systems. Assessee's receipts from services provided by it in India and its taxability was examined in the light of provisions of the Act and India-Thailand DTAA. After considering replies and documents filed by the assessee its income as shown in the revised return of income is accepted. 3. Assessment is, accordingly made on Nil income. Credit for prepaid taxes is allowed after due verification. Detail of computation of tax and interest charged as provisions of law is given in the enclosed ITNS- 150 which is part of this order. Issue necessary forms." Assessment Year : 2014-15 : "M/s Bombardier Transportation Signal (Thailand) Ltd. (hereinafter referred to as the assessee') e-filed its return of income on 28.11.2014 declaring Nil income. The case was selected for scrutiny under CASS and a not....
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....e had entered into an agreement namely CS03" with Delhi Metro Rail Corporation (DMRC) wherein BT-Thailand along with the other members of the consortium would design manufacture, supply, install, test and commission train control & signaling system. During the year under consideration, BT-Thailand made offshore supplies to DMRC. The transfer of ownership/title to DMRC in respect of all supply transaction has taken place outside India. Accordingly, the income accruing by virtue of these offshore supply transactions is not taxable in India. After considering replies and documents filed by the assessee, its income as shown in the return of income is accepted." Assessment Year : 2017-18 : M/s Bombardier Transportation Signal (Thailand) Ltd (hereinafter referred to as "assessee") has e-filed its return of income for Assessment Year 2017-18 on 29.11.2017 declaring total income of Nil. The case was selected for scrutiny under CASS. The scrutiny CASS selection reason is- High ratio of refund to TDS relating to section 195A notice u/s 143(2) of the Income Tax Act, 1961 ("the Act") was issued on 27.08.2018 to the assessee. Further a notice u/s 142(1) of the Act along with detailed questi....
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....for the assessment years 2016-17, 2018-19 and 2019-20 for one reason or the other, which, in our view, is not justified. The ratio of the decision of the Hon'ble Supreme Court in the case of Radhasoami Satsang Vs. CIT (supra) wherein the apex court rejected the plea of the Revenue that res judicata does not apply to tax matters and held that where the facts are identical there is no change in law, the judicial authorities are bound by the decision of the previous year applies to the present case. Therefore, on this ground alone we direct the Assessing Officer to delete the addition made towards off shore supplies and also for providing engineering services accepting the stand of the assessee that they are not taxable under DTAA between India and Thailand. 11. Even on merits the case of the appellant is covered by the decision of the Tribunal in assessee's group company, namely, Bombardier Transportation Sweden AB Vs. DCIT [(2021) 125 taxmann.com 277] wherein the Delhi Tribunal held as under:- "27. Ground Nos. 7 to 15 relate to existence of Permanent Establishment [PE]. 28. This grievance relates to the fact that the DRP has enhanced the income of the appellant on account of P....
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.... employee of Bombardier Transportation Sweden who has been seconded to Bombardier India and is overall responsible for entire delivery including mechanical and electrical equipment and commissioning of the train and ensuring BT standard in all testing activities prior delivery of train in connection 13 with the contract with DMRC. The ld. DR rested his submissions on the following findings of the DRP: "1. There is a Expat employee who is being paid a very high salary of Rs. 7,35,26,751. This shows that his job is of paramount importance for the contract with DMRC and his job responsibilities as defined in the appointment letter include coordination with DMRC engineers for completion of contract. 2. He has overall technical responsibility for the entire scope of delivery including electrical and mechanical equipments. 3. He is also required to provide Technical support during train commissioning in New Delhi, ensure BT standards in all testing activities prior to the delivery of the trains to the customer. 4. The contractor is responsible for shipment of goods to India. 5. The contractor is responsible for all legal requirements, duties,- dues, taxes, and other such requir....
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....ia International Inc & Ors 386 ITR 0353. 36. We have also considered the agreement between the appellant and BTIN. We find that as per this MOU, scope of work between eh appellant and BTIN are clearly bifurcated. The relevant part reads as under: "WHEREAS BT Sweden, BT India and their subsidiaries/affiliates as a fully integrated group are desirous and possess full capability to effectively execute the Project. WHEREAS in view of the prescribed 'eligibility criteria as detailed in Clause A 5.2 (b) of Instructions to Tenderers('ITT) of DMRC Tender BS02 document, BTSweden has been selected as the Lead Member for the above Project ofDMRC and BT India has been designated to act as the local Indiah member of the consortium - *Now MoU will cover the following: Purpose/ Area of the MoU 1.1 The purpose, of the MoU (hereinafter referred to as the 'Purpose') Is to provide as follows: » BT Sweden willgetas the Lead Member. *BT India will ptiis a local Indian member * Broadly identify parts of the Project to be undertaken by BT Sweden as the lead member under the Eligibility Criteria and those to be undertaken by BT India as local Indian member. 2. Scope....
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....ces is defined after taking into consideration each entities' experience ond capabilities while considering the requirement of the tender document of DMRC and in particular the need to involve suitable local partners. 14. The date of letter of acceptance is 17-09-2007 while the MoU is dated 11-10-2007. Thus, the MoU between B T Sweden and BUN has been signed after the contract has been accepted. 37. As mentioned elsewhere, the appellant does not have any place of business in India and all business activities with respect to offshore supplies are carried outside India. The equipment supply has been manufactured at overseas manufacturing facility of the appellant and sale of equipment has occurred outside India and payment has also been received by the appellant and outside India. 38. We find that during the DRP proceedings, the DRP was misdirected in considering the contract RS 02. This contract is between BTIN Bombardier Transportation, Germany and DMRC and for this contract, Bombardier Transportation Germany has raised invoices on BTIN for offshore manufacture and supply of equipment whereas the 20 contract under consideration is between DMRC and Consortium the appellant and....