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Income Tax Appellate Tribunal, DELHI BENCH ‘D’, NEW DELHI
Before: SH. N. K. BILLAIYA & MS. ASTHA CHANDRA
PER N. K. BILLAIYA, AM:
This appeal filed by the assessee is preferred against the order of the CIT(A)-42, New Delhi dated 13.08.2018 for A.Y. 2014-15.
Ground No.1 is of general in nature and needs no adjudication.
Ground No.2 is, as stated, is academic in nature and on such statement we do not find it necessary to adjudicate the form ground for academic interest and the same stand dismissed. 4. The substantive grievance of the assessee relates the treatment of Bombardier Transportation India Ltd. (BTIN) as the “Fixed Place Permanent Establishment” (“Fixed Place PE”) of the assessee in India. 5. The under lying facts in this issue are that the assessee company is registered and incorporated under the laws of Sweden. The assessee, is a tax resident of Sweden in terms of Article 4 of India Sweden Tax treat. It is engaged in the business of manufacturing of train control and signaling systems for mass transit system. 6. The assessee entered into two contracts BS-02 and CS-01 with Delhi Metro Rail Corporation Limited (“DMRC”) and Bombardier Transportation India Limited (“BTIN”). Taking leaf out of the assessment proceedings for A.Y.2011-12 the AO observed as under :-
“8.6 Though facts of the case for this year are slightly different from those of earlier years as this year there are two contracts namely BS-02 and CS-01 as compared to only one contract in earlier years. However, in sum and substance these are similar. Therefore, conclusions drawn in earlier years on the basis of analysis of BS-02 contract may apply to both the contracts for this year. On the basis of discussion made in earlier paragraphs and in view of the findings of the DRP in the AY-2011-12 as reproduced above, it is held that BTTN is the PE of the assessee in India in respect of contract BS02 as well as CS-01 with the DMRC. Accordingly, income in respect of the DMRC contract BS02 and CS-01 needs to be attributed to the PE in India.”
Having held as above the AO proceeded by attributing profits to assess’s PE in India and accordingly made the attribution.
Assessee carried the matter before the CIT(A). After considering the facts and the detailed submissions the CIT(A) also followed the findings given in A.Y.2011-12 and the same read as under :-
“7.6 The AO took note of the DRP observations regarding the existence of PE in the AY 2011-12 in the assesee’s case and accordingly, held that BTIN is the PE of the assessee in India in respect of contract BS02 & CS01 with the DMRC. Hence, the AO concluded that the income in respect of the DMRC contract BS02 & CS 01 needs to be attributed to the PE in India.”
The CIT(A) further extracted the findings of the DRP for A.Y.2011-12 based on the contract between the assessee and DMRC at para-7.7 of his order and concluded as under :-
Representatives of both the sides were heard at length. Case record carefully perused.
A perusal of the assessment order and the order of the CIT(A) was show that both the authorities have followed the assessment order and the order of the first appellate authority for A.Y.2011-12. This Tribunal in A.Y.2011-12 in order dated 29.10.2020 decided the issue. The relevant findings of the Tribunal read as under :-
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On finding parity on facts, respectfully following the decision of the Coordinate Bench we direct the AO to delete the impugned additions. Ground No.3 with all its sub grounds are allowed.
Other grounds are consequential in nature and need no separate adjudication.
In the result, the appeal filed by the assessee is allowed.
The order is pronounced in the open court on 10.02.2022 in the presence of both the rival representatives.