LINKLATERS LLP,LONDON vs. ASSISTANT COMMISSIONER OF INCOME TAX (INTERNATIONAL TAXATION), CIRCLE (3)(1)(2), MUMBAI, MUMBAI

Grounds taken by the assessee are reproduced as under: 1. The learned Hon'ble Dispute Resolution Panel ('Panel) erred in relying on its finding for the AY 2016 17. 2. The learned AO erred in computing the total income of the appellant at Rs 1,36,88,625

The learned AD erred in not appreciating the facts of the appellant's case for the captioned year and proceeded with the assessment merely based on surmises and conjectures

The learned AO erred in making certain observations at the following paras of the order without any basis/evidence.

The learned AO erred in taking the below contradictory positions in the above order.

The learned AO erred in holding that the appellant is not entitled to the benefits of India-UK DTAA

The learned AO erred in holding that the appellant cannot be treated as resident of the UK within the meaning of Article 4(1) of the India-UK DTAA

The learned AO ought to have appreciated that income of the appellant is subject to UK laws and therefore the appellant is "liable to taxation" in the UK

The learned AD erred in holding that the fees earned by the appellant is in the nature of "fees for technical services as defined under section (1)(vii) of the Act.

The learned AD ought to have appreciated that the income earned by the appellant is covered by the provisions of section 9(1)(1) of the Act

Without prejudice to the above, the learned AD ought to have appreciated that in view of the specific provisions of section 9(1)(vii)(c) and also the fact that the services rendered by the appellant were not utilised by the clients in India, the appellant's entire income cannot be considered as deemed to accrue or anise in India

The leamed AO erred in rejecting the appellant arguments on utilisation of services, by referring to the retrospective amendment to Section 9 of the Act.

The learned AO also ought to have appreciated that the said amendment does not apply to income covered under clause (i) of Section 9(1)

The learned AO erred in holding that the appellant's income is considered a technical service rendered through a permanent establishment without any basis or evidence.

The learned AO ought to have held that the appellant does not have a permanent establishment in India as defined in Article 5 of the India-UK DTAA

The learned AO ought to have appreciated that the personnel of the appellant have furnished services in India only for 4 days during any twelve month period relevant to the financial year 2021-22 and hence as per Article 5(2)(k) of the DTAA the appellant does not have permanent establishment in India

The leamed AO ought to have appreciated that in the absence of permanent establishment in India as per Article 7(1) of the DTAA the income earned by the appellant is not liable to tax in India.

Without prejudice, the learned AD ought to have allowed deduction for entire expenditure instead of restricting to 5% of the total income

The leamed AO erred in holding that the income of the appellant is in the nature of "lees for technica services as defined under Article 13(4)(c) of the DTAA

The learned AO ought to have appreciated that the services rendered by the assessee did not make available technical knowledge, experience, skill, know- how or process and hence fees earned by the appellant is not covered by the Article 13 of the DTAA

The learned AO ought to have appreciated that merely because the services to be rendered include the technical input does not per se mean that the technology is made available

The learned AO erred in observing that reliance cannot be placed on the Memorandum of Understanding to the India-USA Tax Treaty for the explanation of the term 'make available

The learned AO ought to have appreciated that the definition of "fees for technical services as provided in Article 13(4) of the DTAA is much narrower than the definition provided in section 9(1)(vi) of the Income-tax Act

Without prejudice to the above the learned AD erred in holding that entire receipt is liable to tax in India under Article 13 of the DTAA. The learned AO ought to have appreciated that as per Article 13(2) read with Article 13(7) only fees arising or deemed to arising in India can be subject to tax in Article 13 of the DTAA

The learned AO ought to have appreciated that the DTAA has different provisions for taxing fees for technical services and fees for professional income and that the taxability of fees earned by the appellant is governed by the provision of Article 7 le business profits of the DTAA

The learned AO ought to have appreciated that in absence of permanent establishment in India and as per Article 7(1) of the DTAA no part of the income shall be taxable in India.

The learned AO erred in holding that the entire income earned by the appellant is taxable under the DTAA which has been held in the appellant's own case. The appellant submits that in its own case for the AY 2011-12, the Tribunal has held that if there is a PE only income in respect of services rendered in India are liable to tax in India as income attributable to the PE

Without prejudice the learned AO ought to have allowed deduction for expenses incurred outside India relating to services rendered.

The learned AO erred in observing that amount representing reimbursement of expenditure is also a part of gross receipt. The appellant submits that reimbursement of expenditure is not income and therefore the same cannot be brought to tax

The learned AO erred in not providing an opportunity of being heard before taxing the disbursements

Without prejudice to the above, the learned AO ought to have allowed deduction for expenditure incurred for such disbursements.

Without prejudice ought to have allowed deduction for entre expenses instead of restricting to 5% of the income

The leamed AD erred in holding that the appellant was liable to tax in India under Article 15 of the india UK DTAA The learned AD ought to have appreciated that Article 15 was applicable only to individuals and was not applicable to the case of the appellant

Without prejudice to the above, in terms of Article 15(1) the learned AD ought to have taxed income only in respect of services rendered in India

The learned AO erred in holding that appellant's partners and staff, use the hotels or the places provided by clients as an office or place of work and from such premises the appellant provides services to its client

The learned AO erred in applying tax rate of 42. 43% on the gross fees including disbursement earned by the appellant.

Without prejudice to the claim that no income is liable to tax in India, since the learned AD has held the appellant's income as technical services taxable under the Act, the learned AO ought to have considered tax rate at 10% (plus surcharge and cess) being beneficial rate provided under section 115A of the Act for fees for technical services.

The learned AO has erred in levying interest under section 2348 of the Act at Rs. 18,20,907. The appellant denies liability for the interest levied under section 2348

The learned AO erred in initiating penalty proceedings under section 270A.

Brief facts of the case are that assessee filed its return of income on 03.10.2022 reporting total income at nil. From the submissions made by the assessee in the course of assessment proceedings, it is noted that assessee is a limited liability partnership incorporated under the laws of United Kingdom. According to it, as per section 2(17) of the Act, the status claimed by it that of a company. assessee provides legal services to various clients all over the world, including India. assessee is registered with the