TaxTMI 
TaxTMI 
2024 (2) TMI 833
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....lhi ("Ld. AO") under section 143(3) read with section 144C of the Income tax Act, 1961 ("Act") pursuant to the directions issued by the Learned Dispute Resolution Panel ("Ld. DRP") is bad in law and liable to be quashed. 2. On the facts and circumstances of the case & in law, the Impugned Order, giving effect to the directions of the Hon'ble DRP dated August 8, 2023 is bad in law and barred by limitation in view of the provisions of Section 153 of the Act. Grounds relating to the taxability of Appellant in India under the Act and the Tax Treaty. 3. On the facts and circumstances of the case & in law, the Ld. AO/ DRP grossly erred in holding that the receipts from offshore supply of parts is taxable in India both under section 9(1)(i) of the Act and Article 5 read with Article 7 of India-USA Double Taxation Avoidance Agreement ("Tax Treaty"). 4. On the facts and circumstances of the case & in law, Ld. AO/ DRP erred in holding that the Appellant has a business connection in India under section 9(1)(i) of the Act without appreciating that the Appellant is governed by the beneficial provisions of DTAA in view of section 90 of the Act. 5.....
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....sation paid to the Indian affiliate of the Appellant, in respect of marketing and sales support provided to the Appellant. (b) the Ld. AO erred in not following the directions of the Ld. DRP and incorrectly computed the total receipts from offshore supply for the concerned year as INR 1,24,96,28,023, in place of INR 1,18,26,08,690. (c) the Ld. AO/ DRP erred in changing the attribution rate as compared to the earlier assessment years and accordingly grossly erred in violating the principles of Article 7(5) of Tax Treaty. Other grounds. 9. On the facts and circumstances of the case & in law, the Ld. AO has erred in determining the tax payable by the Appellant as INR 6,79,49,370 without providing any computation. 10. That on the facts of the case and in law, the Ld. AO erred in levying interest under section 234A and 244B of the Act. 11. That on the facts of the case and in law, the Ld. AO erred in initiating penalty under section 270A of the Act. That the above grounds of appeal are without prejudice to each other and the Appellant reserves its right to add, alter, amend or withdraw any ground of appeal either before or a....
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....ly before the Assessing Officer, but even before learned DRP, the assessees have vehemently urged that since the factual position in the impugned assessment years have substantially changed, the decision taken in past assessment years cannot be followed blindly. It was the case of assessees before the departmental authorities that as per the facts of the impugned assessment years, the assessees had no PE in India as the AIFACS building considered as the PE of the assessees was vacated by GEIOC on 01.05.2012. It was pleaded by the assessee that in these years, no expatriates have visited in India. As it appears, the departmental authorities have turned a blind eye to all the submissions and facts brought on record by the assessee. Merely following the decision taken by the appellate authorities and Hon'ble High Court in past assessment years, the departmental authorities have concluded the existence of PE without looking into or examining the facts and evidences brought on record, which are very much relevant for deciding the existence of PE in the impugned assessment years. It is observed, while deciding identical issue in case of Nuovo Pignone International SRL Vs. DCIT (supra) in....
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....oblivious to such facts and materials brought on record and proceeded to conclude existence of PE merely relying upon the past orders passed by them and higher appellate authorities. It is trite law, the existence or otherwise of PE has to be determined on year to year basis, as the existence of PE has to be decided based on the definition of PE in the relevant tax treaty. Merely because in one year, the assessee had a PE in India, that by itself cannot lead to the conclusion that the assessee must be having a PE in subsequent assessment year, without looking into the relevant facts. In this context, we refer to the decision in the case of M/s. Bentley Nevada Inc. (supra). Further, in case of E-Funds IT Solution Inc. (supra), Hon'ble Supreme Court has very clearly and categorically held that the onus is entirely on the Revenue to establish existence of PE. 13. Adverting to the facts of the present appeal, undisputedly, the assessee brought on record all material and evidences to establish that it does not have any PE in India. As it appears from the respective orders of the departmental authorities, without dealing with the submissions of the assessee and evidences brought....