TaxTMI 
TaxTMI 
2026 (7) TMI 1635
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....o. 1 Erroneous conclusion of the Appellant constituting a 'Business Connection' under Section 9(1)(i) of the Income-tax Act, 1961 (the 'Act') and Permanent Establishment ('PE') under Article 5 of the India-Singapore Tax Treaty ('Tax Treaty') in India 1.1 On the facts and circumstances of the case and in law, the Assessing Officer ('AO') erred in concluding and the Dispute Resolution Panel ('DRP') erred in confirming that the Appellant has a Business Connection under Section 9(1)(1) of the Act and PE under Article 5 of the Tax Treaty in India due to the activities of UPS SCS (India) Private Limited ('USIPL') without appreciating that the Appellant operates entirely outside India and does not have any presence in India/carry out any operations in India. 1.2 The Appellant prays that the conclusion of Appellant having a Business Connection under Section 9(1)(i) of the Act and PE under Article 5 of the Tax Treaty is erroneous, unwarranted and should be deleted. Ground No. 2 - Erroneous attribution of taxable income of Rs. 4,13,14,903 to the alleged Business Connection under Section 9(1)(i) of the Act/PE u....
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....that all the above grounds are recurring issues which have already been adjudicated by Hon'ble ITAT, Mumbai Bench in various assessment years in its own case and decided in its favour. It is stated that ground no.1 and 2 are squarely covered by ITA Nos.717/ Mum/2017,7319/Mum/ 2018 and 6631/ Mum/2019 etc. It is stated that the AO wrongly Indian entity as PE and Dependent agent. In so far as the ground no.3 is concerned, it is again stated that the ground is covered by ITAT order in ITA No.4797/Mum/ 2023 dated 28.10.2024 for AY 2021 -22. The ld.DR did not controvert the above claim of the ld.AR. 5. On careful consideration of all relevant facts of the case and the past precedents arising from the appellate orders passed by the coordinate bench of ITAT Mumbai( supra) in assessee's own cases for last several years, we find that all the above grounds have already been adjudicated at length and stand decided in favour of the assessee. In this connection, we refer to its recently passed appellate order by the ITAT in AY 2021 -22 in ITA No.4797/Mum/2023where on identical facts and the circumstances, all the above grounds have been adjudicated in favour of the assessee. Relevant parts of....
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....nnection / PE of the Appellant in India is erroneous, unwarranted and should be deleted Ground No. 3 - Erroneous taxation of interest on Income-tax Income und of Rs. 51,46,211 as per the provisions of the Act refund 3.1 On the facts and circumstances of the case and in law, the AO erred in concluding and the DRP erred in confirming that the Income tax refund is taxable as per the normal interest on Income-tax provisions of the Act instead of Article 11(2)(b) of the Tax Treaty without appreciating that the interest on Income tax refund is Income-tax attributable to the Appellant and not to the alleged PE in India. 2. Briefly stated facts of the case are that the assessee is a company incorporated under the laws of Singapore and is engaged in the business of provision of supply chain management, including the provision of freight forwarding and logistics services. For the year under consideration, the assessee filed return of income on 15.03.2022 declaring total income at Rs. 52,93,600/-.The return of income filed by the assessee was selected for scrutiny assessment and statutory notices under the Act were issued and complied with. The assessee had entered ....
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.... relation to attribution of the profit to the he assessee has been held in favour of the assessee by the Tribunal in earlier years and therefore the issue of whether there is permanent establishment of the assessee in India, India is merely academic. 4. We have heard rival submission of the parties and perused the relevant materials on record. The ld DR has referred to slight change in the service agreement in the year under consideration but, in our opinion that might be relevant for determination of existence of PE, but as far as issue of attribution of the profit in case of assessee is concerned same is not relevant, because the AO has treated the Indian AE as an dependable agent permanent establishment (DAPE)and said agent has been remunerated on arm's length value and no adjustment had been made by the TPO in the case of DAPE, then no further attribution of the profit is required in the case of the assessee. This principle has been followed in the case of the assessee by the Tribunal in ITA No. 7171/Mum/2017, 7319/Mum/2018 and 6631/Mum/2019 for assessment nt years 2013-14 2013 hereafter in ITA No. to 2015-16. Thereafter 2017 18 and in ITA No. 2243 1220/Mum/2021 fo....
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....dinate ordinate Bench Tribunal in the case of Dy. CIT v.139 taxmann.com 367 (Mumbai-Marubeni Corporation [2022] 139 (Mumbai Trib.). 5.2 We have heard rival submission of the parties and perused the relevant material on record. The issue of interest arising from the Income-tax tax refund has been dealt by the Co ordinate Bench of the Co-ordinate Tribunal in the case of the Clough Engineering Ltd. (supra) and held that such interest was not effectively connected with the PE either on the basis of asset test or activities test and therefore, it was taxable under paragraph 2 of the Article 11 of the DTAA. The relevant finding of the tribunal is reproduced as under: "11.4 Thus, we are again left with the fundamental question as to whether the debt claim in this case can be said to be effectively debt-claim connected with the PE. We have already held that the claim is connected with the PE in the sense that it has arisen on account of tax the deduction at source from the receipts of the PE. However, it is also a fact that payment of tax is the responsibility of the foreign company.The same is determined after computation of its income and the tax forms not an expenditur....