TaxTMI 
TaxTMI 
2026 (7) TMI 1877
X X X X Extracts X X X X
X X X X Extracts X X X X
....urisdiction, void ab initio and liable to be quashed being barred by limitation under provisions of section 144C read with section 153 of the Act. 2. On the facts and in the circumstances of the case and in law, the Dispute Resolution Panel ('DRP') / learned Assessing Officer ('AO') erred in treating the Network Fee of INR 1,17,62,93,747 earned during the year by the Appellant, as fees for technical services under the Income-tax Act, 1961 ('Act'). 3. On the facts and in the circumstances of the case and in law, the DRP/ learned AO erred in treating, the Network Fee of INR 1,17,62,93,747 earned during the year by the Appellant, as fees for technical services under Article 13 of the India- Denmark Double Tax Avoidance Agreement ('DTAA'). 4. On the facts and in the circumstances of the case and in law, the learned AO erred in computing tax on income tax refund @20% under section 115A(1)(a)(ii) of the Act (plus applicable surcharge and cess) instead of beneficial rate of 15% as per Article 12(2) of India Denmark DTAA while computing total tax liability in computation attached with Assessment Order. 5. On the facts and ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....s i.e. (i) ITA No. 4345/MUM/2023 and 4325/MUM/2023 dated 14.08.2024 or the AY 2021-22; (ii) ITA No. 909 & 937/MUM/2023 dated 19.06.2023 for AY 2017-18 and 2020-21; (iii) ITA No. 545/MUM/2022 & ITA No. 2240/MUM/2022 dated 31.03.2023 for AY 2018-19 and 2019-20; (iv) ITA No. 7447/MUM/2017 dated 22.08.2022 for AY 2013-14; (v) ITA No. 933/MUM/2017 & ITA No. 6465/MUM/2017 dated 20.07.2020 for AY 2012-13 and 2013-14 and (vi) ITA No. 1329/MUM/2025 dated 29.09.2025 for AY 2022-23. Since the facts are similar, the Ld. AR requested to delete the addition and allow the grounds of appeal. 5. On the other hand, the Ld. CIT DR supported the order of AO and DRP. 6. We have heard both sides and perused the materials on record. We have also deliberated on the decisions relied upon by the Ld. AR. We find that this is a recurring issue and the Tribunal has decided the issue in favour of the appellant in appellant's own case for different assessment years. The decisions of the Tribunal for AYs. 2021-22 in ITA No. 4345/Mum/2023 (supra) is reproduced below for ready reference: "9. We have given a thoughtful consideration to the orders of the authorities below. The Co-ordinate Bench in ITA ....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... Damco International AS, a Danish entity. Both the agreements i.e. agreement between Damco International AS -Damco India and assessee - Damco India are stated to be similar. A perusal of the directions of DRP dated 11/09/2017 would show that the DRP has placed heavy reliance on the directions of the DRP for assessment year 2012-13, wherein instead of present assessee, Damco International AS, a Danish entity was the assessee. In para 4.2 of the DRP directions, the DRP has categorically mentioned that the only change in the impugned assessment year is that instead of Damco International AS, the Damco India has entered into new agreement w.e.f. 01/01/2013 with Damco International BV (the assessee). Thereafter, the DRP has listed the general/ specific obligations of the assessee and Damco India as per the Network agreement. In the assessment order for assessment year 2013- 14 the Assessing Officer while passing the final assessment order reiterated the observations made by the DRP. The Assessing Officer has made no observation that the facts or the agreement in the impugned assessment year are in any manner at variance with the facts of the earlier agreement between the assessee and Da....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ive from INTERNATIONAL a payment as compensation for damages for not having been able to obtain the committed results. By virtue of the foregoing, if the calculation of Network Fee is negative, INTERNATIONAL shall pay compensation as indemnity for damages to Company. Such compensation is valued in advance by the parties, as penalty clause, in an amount such as to enable the Company to obtain EBT based on Cost Company, equivalent to the agreed Mark Up, as defined in the Network Agreement." From above clauses in the Network Agreement it is ambiguously clear that Damco India remunerates the assessee only in the event of surplus profits. In the event of insufficient receipts Damco India is entitled to retain "Cost + 10% Mark Up". In the impugned assessment year Damco India had surplus that was shared with the assessee in accordance with the terms and conditions of agreement. We observe that the entire risk is borne by the assessee and Damco India is insulated from the risk. It has been contended that the obligation under both the agreements i.e. agreement between Damco International AS and Damco India as was applicable in the assessment year 2012-13 and 2013-14 (from ....
X X X X Extracts X X X X
X X X X Extracts X X X X
...., sub-clause (b) to clause (5) refers to "make available" condition. In the present case nothing has been brought on record by the Revenue to substantiate that any technical knowhow has been "made available" to Damco India by the assessee. 10. Thus, in view of our above observations we hold that network fee received by the assessee from Damco India is neither in the nature of Royalty nor FTS. Consequently, the aforesaid amount received by the assessee is not eligible to tax under the provisions of the Act or India - Netherlands DTAA." 10. The learned DR could not show us any reason to deviate from the aforesaid decision rendered in assessee's own case and no change in facts and law was alleged in the relevant assessment year. Thus, respectfully following the order passed by the coordinate bench of the Tribunal in assessee's own case cited supra, we uphold the plea of the assessee and direct the AO to delete the impugned addition on account of receipt of network fees from Damco India Private Ltd. As a result, grounds no. 1-3 raised in assessee's appeal are allowed." 10. Respectfully following the order of the Co-ordinate Bench (supra), we direc....