SIEMENS AKTIENGESELLSCHAFT,MUMBAI vs. DEPUTY CIT-TAX (INT TAX)-4(2)(1), MUMBAI

Per Smt. Beena Pillai, JM: The aforesaid appeals have been filed by the assessee against the final assessment orders passed u/s 143(3) r.w.s. 144C(13) of the Act, in pursuance of the directions issued by the Ld. DRP for the respective assessment years under consideration. The details

3 I.T.A. No. 5803/Mum/2025 & I.T.A. No. 5804/Mum/2025 of the final assessment orders passed by the Ld. AO for each assessment year are tabulated as under:

Sr. No. Assessment Year Date of Final Assessment Order 1. 2012-13 31/01/2017 2. 2012-13 30/06/2017 3. 2014-15 23/10/2018 4. 2015-16 25/09/2019 5. 2016-17 30/04/2021

Since common issues are involved in all these appeals, they were heard together and are being disposed of by way of this consolidated order for the sake of convenience.

• I.T.A. No. 1615/Mum/2022 (A.Y. 2017–18) & I.T.A. No. 2259/Mum/2022 (A.Y. 2018–19), order dated 22/09/2025;

• I.T.A. No. 4713/Mum/2023 (A.Y. 2021–22), order dated 27/02/2025;

• I.T.A. No. 7779/Mum/2012 (A.Y. 2008–09), order dated 16/06/2025.

2.1. It was further submitted that the issues involved in all these years are identical and arise on similar facts and circumstances. In particular, it was pointed out that the issues have been dealt

4 I.T.A. No. 5803/Mum/2025 & I.T.A. No. 5804/Mum/2025 with in detail by the Coordinate Bench in assessee’s own case for I.T.A. Nos. 2153/Mum/2014 & 2179/Mum/2014 (A.Y. 2009–10), order dated 07/06/2024.

2.2. It was thus jointly agreed that the findings rendered by the Coordinate Bench for A.Y. 2009–10 may be followed and applied mutatis mutandis to the other assessment years under consideration, as the facts, issues, and findings of the authorities below remain identical.

AY 2012– AY 2013– AY 2014– AY 2015– AY 2016– Issue Nature of Issue 13 14 15 16 17 1 General Ground 1 1 1 1 1 2 Cash vs Accrual 2 2 2 2 2 3 Software Royalty 3–5 3–5 3–5 3–5 3–5 AOP issue (not adjudicated by 4 6–10 6–10 6–10 6–10 6–10 DRP) 5 Offshore Supply 11 11 11 11 11 6 Offshore Services 12–13 NA NA NA NA 7 TP Grounds 13–21 15–20 15–20 13–21 13–21 8 Interest from NTPC NA 13–14 13–14 NA NA 9 TDS on accrual basis NA 12 12 NA NA 10 Interest u/s 234B NA 21 21 NA NA 11 Penalty u/s 271(1)(c) 20 22 22 22 22 12 Penalty u/s 271G 21 23 23 NA NA Additional Ground (Limitation) Addl. Addl. Addl. Addl. Addl. 13 Ground Ground Ground Ground Ground

We have heard the submissions advanced by both sides and perused the records placed before this Tribunal.

5 I.T.A. No. 5803/Mum/2025 & I.T.A. No. 5804/Mum/2025 The grounds raised under this issue are general in nature and do not call for any specific adjudication. Accordingly, the same are treated as not requiring separate consideration. 5. Issue No. 2: Taxability on Cash vs. Accrual Basis We have perused the submissions advanced by both sides in light of the records placed before this Tribunal. This issue pertains to the taxability of income on cash basis vis-à-vis accrual basis. It is observed that the Coordinate Bench in assessee’s own case for A.Y. 2009–10 has dealt with this issue in detail. The relevant findings of the Tribunal are as under:-

“77. Ground No.1 of Revenue’s appeal refers to direction of the ld. DRP to tax royalty in FTS on receipt basis which according to department shall be on accrual basis. 78. The assessee is a non-resident Company, incorporated in Germany, having taxable income in India. With regard to FTS and royalty is has shown income on receipt basis as per the India Germany DTAA. The issue before us is, whether the income of the assessee is to be taxed on receipt basis as against accrual basis. The ld. AO has relied upon the judgment of Hon'ble Madras High Court in the case of Standard Triumph Motors Ltd. (119 ITR 573) which has held that in case of non-resident, Section 5(2)(a) of the Income tax Act i.e., will have no application and taxability will be determined only under Section 5(2)(b) of the Income Tax Act, i.e., by accrual. Subsequently, the Supreme Court in the case of Standard Triumph Motor Co Ltd. v. CIT [1993] 201 ITR 391 (SC) held that in the particular case, the credit entry to the account of the assessee non- resident in the books of Indian company amounted to receipt by the non- resident. Further, in the case of the assessee this issue has been settled by the Tribunal right from A.Yrs.1990-91,1991-92,1994-95,1996- 97,1997-98,2001-02,2002-03 and 2003-04. The ld. AO has not accepted the decision of the Tribunal stating that Revenue has preferred an appeal before the Hon’ble Bombay High Court. 79. The ld. DRP held that Hon’ble Bombay High Court in assessee’s own case has accepted the contentions of the assessee in A.Y.1986-87 to 1992-93, 1996-97, 1997-98 and 2001-02 wherein the Hon'ble Bombay High Court has considered the various ITAT decisions in assessee's own case and the stand of the assessee has been upheld that the receipt is to be taxed on actual receipts. Therefore, the AO is directed not to bring tax the income on account of royalty and FTS on accrual basis but to tax the same on receipt basis. After considering the submissions and decisions of the Tribunal and the Hon’ble Bombay High Court in the case of the

6 I.T.A. No. 5803/Mum/2025 & I.T.A. No. 5804/Mum/2025 Tribunal, this issue is decided in favour of the assessee that income on account of Royalty and FTS can be taxed only on receipt basis. 80. Even otherwise Article-12 of India-German tax treaty used the word “paid, payments of any kind received and payments of any amount”. The Article 12 of India-Germany Tax Treaty which has been reproduced below:- “ARTICLE 12-Royalties and fees for technical services :- 1. Royalties and fees for technical services arising in a Contracting State and paid to a resident of the other Contracting State may be taxed in that other State. 2…… 2. The tem “royalties’ as used in this Article means payments of any kind received as a consideration for the use………………….. 3. The term "fees for technical services" as used in this Article means payments of any amount inconsideration and so on 5…. 6….. 7….. (emphasis supplied) 81. Thus, as per the tax treaty, Royalty and fees for technical services income should be taxable only upon payment i.e. on receipt basis. If this position has been accepted by the Tribunal in assessee’s own case for the earlier years and also by the Hon’ble Bombay High Court, the details of which are as under:-

Sr. Assessment Year ITA No. Date of Order No.

1986–87 to 1992– 2356, 2357, 2384, 2386, 2387, 5. 07/03/2013 93 2428, 2429 of 2011

Sr. Assessment Year ITA No. Date of Order No.

7 I.T.A. No. 5803/Mum/2025 & I.T.A. No. 5804/Mum/2025 Sr. Assessment Year ITA No. Date of Order No.

1998–99 & 1999– 6133/Mum/2002 & 4. 07/12/2009 00 7589/Mum/2003

1990–91 & 1991– 6. 1499/Mum/1998 04/07/2005 92

Respectfully following the aforesaid decision of the Coordinate Bench in assessee’s own case, wherein the issue has been examined in detail after considering the relevant statutory provisions, judicial precedents and the factual matrix, we find no reason to deviate from the view already taken. Since the facts and circumstances in the year under consideration are identical, and no distinguishing feature has been brought to our notice by either side, the findings and directions contained in the said order are squarely applicable to the present assessment year. Accordingly, this issue is decided in terms of the directions contained therein, and the Assessing Officer is directed to give effect to the same.

8 I.T.A. No. 5803/Mum/2025 & I.T.A. No. 5804/Mum/2025 We have perused the submissions advanced by both sides in light of the records placed before this Tribunal. The issue relates to characterization of receipts from software as royalty. The Coordinate Bench in assessee’s own case for A.Y. 2009–10 has elaborately adjudicated this issue and observed as under:-

• Firstly, the software provided are standard off-the-shelf software. • Secondly, the assessee grants a non-exclusive and non-transferable license to its customers, allowing them to copy the software for single user use only on their equipment. • Thirdly, the end-user license agreement includes several restrictions, prohibiting the use of the software for purposes other than those specified in the agreement or the creation of copies for commercial exploitation. • Fourthly, even in cases where the relevant hardware and software are itemized separately on the same invoice, or when separate invoices are issued, or when updates to the software are supplied, or additional features are validated at a later date, such distinctions should not affect the stance. These software products are exclusively compatible with the equipment manufactured by the assessee and hold no utility on similar equipment produced by its competitors. • Lastly, the software supplied by the assessee, as delineated in the three invoices mentioned in the DRP's directions, is exclusively designed for utilization with the Medical Diagnosis Devices manufactured by the assessee.

10.1 Apart from that, we find that this issue stands covered by the decision of the Tribunal in assessee’s own case in various assessment years details of which are as under:-

Sr. No. Assessment Year ITA No. Date of Order 1. 2006–07 8094/Mum/2010 06/05/2014 2. 2005–06 1174/Mum/2010 20/05/2014 3. 2004–05 4502/Mum/2009 18/05/2012 4. 2003–04 2520/Mum/2008 09/07/2010 5. 2002–03 2099/Mum/2007 10/12/2008 6. 2001–02 1957/Mum/2007 08/12/2008

“6. We have heard the rival submissions and perused the relevant material on record. There is no dispute on the fact that the assessee had not separately sold software but it was part and parcel of the equipment supplies to M/s Siemens Limited. The case of the assessee is that it should be taken at "Business Profits as per Article 7 to DTAA between India and Germany. On the other hand the Department wants it to be considered as falling under Article 13, being the royalty. We have to decide whether the sum of Rs.5.29 crores is to be considered as

9 I.T.A. No. 5803/Mum/2025 & I.T.A. No. 5804/Mum/2025 "Business profits" or "royalty. The Special Bench of the Tribunal in the case of Motorola Inc. Vs. DCIT (2005) 95 ITD 269 (Delhi)(SB) has considered this aspect and held that "the payment made to the assessee for use of software in the equipment did not amount to royalty either under the Income-tax Act or the DTAA." The facts involved in the instant case are akin to those considered by the Special Bench in the afore-noted case. The Learned Department Representative could not point out any distinguishing feature in the facts of the instant case vis-a-vis that decided by the Special Bench. Respectfully following the view taken by the Special Bench in this aspect of the matter, we are of the considered opinion that the amount received by the assessee towards supply of software cannot be segregated from the supply of equipment and hence that portion cannot be considered as "royalty". We, therefore, approve the view taken by the learned CIT(A) on this issue.”

“6. During the year under consideration, the assessee had supplied equipment to the various parties in India. The software required for the said equipment was also supplied by the assessee to its Indian customers. During the course of assessment proceedings, the A.O. verified the relevant invoices and found on such verification that the software in some cases was supplied by the assessee independently without any reference to the supply of corresponding equipment. He therefore treated the income earned by the assessee from the supply of software as in the nature of royalty and the same was brought to tax in the hands of the assessee as income from royalty. On appeal, the ld. CIT(A) held that the value of software could not be taxed as royalty in the hands of the assessee following the decision of the Tribunal in assessee's own case on similar issue for the earlier years i.e. 2001-02 & 2002-03. He also took note of the fact that a similar issue was decided by his predecessor in favour of the assessee in assessment years 2003-04 & 2004-05.”

• The first category deals with cases in which computer software is purchased directly by an end-user, resident in India, from a foreign, non-resident supplier or manufacturer. • The second category of cases deals with resident Indian companies that act as distributors or resellers, by purchasing computer software from foreign, non-resident suppliers or manufacturers and then reselling the same to resident Indian end- users. • The third category concerns cases wherein the distributor happens to be a foreign, non-resident vendor, who, after purchasing software from a foreign, non-resident seller, resells the same to resident Indian distributors or end-users. • The fourth category includes cases wherein computer software is affixed onto hardware and is sold as an integrated unit/equipment by foreign, non-resident suppliers to resident Indian distributors or end-users.

10 I.T.A. No. 5803/Mum/2025 & I.T.A. No. 5804/Mum/2025 15. Before us comparison between facts of the case and the terms and conditions which have been submitted to the ld. AO during the assessment proceedings for later assessment years vis-à-vis the conclusions outlined by Supreme Court in the case of Engineering Analysis Centre of Excellence (P) Ltd. has been given in the following manner:-

Facts in Engineering Analysis Centre Facts in the case of Assessee of Excellence (P.) Ltd. 1. GRANT OF LICENCE: Samsung grants a limited non-exclusive license to install, use, The Purchaser shall have the perpetual access, display and run one copy of the and non-exclusive right to use the Samsung Software on a single Samsung Software Product on the devices for Mobile Device, local hard disk(s) or other which it is intended, whereby each permanent storage media of one computer Software Product may only be used on and prohibits making the software one device at any given time. available over a network for use by multiple computers. 2. You may make one copy of the Samsung Software in machine readable form for The Purchaser may make up to three backup purposes only, provided that such copies of the Software Product to be used copy includes all copyright or proprietary for back-up purposes only. notices contained on the original. 3. LIMTIATIONS ON END USER RIGHTS The Purchaser shall not change, reverse You shall not, and shall not enable or engineer or reverse compile the Software permit others to, copy, reverse engineer, Products and shall not extract any parts decompile, disassemble, or otherwise thereof. Furthermore, the Purchaser attempt to discover the source code or shall not remove any alphanumeric algorithms of the Software (except as identifiers, markings and Copyright permitted by law), or modify, disable notices from the data carriers and shall features, or create derivative works. You copy such in their unchanged form. The may not rent, lease, lend, sublicense or above provisions shall apply provide commercial hosting services with analogously to all associated the Software. documentation. 4. The Supplier shall grant the Purchaser You may not transfer this EULA or the the right to transfer the right to use rights to the Samsung Software to any third granted to it to a third party. In such party except along with the sale of the case, an agreement is to be concluded device, and such transfer must include all with the third party by which the third components, without retaining copies. The party shall not be granted any rights of transferee must agree to all EULA terms. use over and above those granted by the Supplier to the Purchaser. 5. 2.License Grant

"The Program is owned by IBM or an IBM supplier, and is copyrighted and licensed, The Purchaser shall not change, reverse not sold. Licensee receives a license to the engineer or reverse compile the Software Programs from Assimil8 Limited through a Products and shall not extract any parts sublicensing agreement between IBM and thereof. Furthermore, the Purchaser Assimil8 Limited. Assimil8 Limited grants shall not remove any alphanumeric Licensee a non-exclusive license to (1) use identifiers, markings and Copyright the Program up to the Authorized Use notices from the data carriers and shall specified in the PoE (2) make and install copy such in their unchanged form. The copies to support such Authorized Use, and above provisions shall apply (3) make a backup copy, all provided that analogously to all associated (a) Licensee has lawfully obtained the documentation. Program and complies with the terms of the Agreement; (b) The backup copy does not execute unless the backed-up Program

11 I.T.A. No. 5803/Mum/2025 & I.T.A. No. 5804/Mum/2025 Facts in Engineering Analysis Centre Facts in the case of Assessee of Excellence (P.) Ltd. cannot execute (c) Licensee reproduces all copyright notices and other legends of ownership on each copy, or partial copy of the Program; (d) ……….. (e) Licensee does not: (1) use, copy, modify, or distribute the Program except as expressly permitted in this agreement; (2) reverse assemble, reverse compile, otherwise translate, or reverse engineer the program, except as expressly permitted by law without the possibility of contractual waiver; (3) use any of the Program's components, files, modules, audiovisual content, or related licensed materials separately from that program; or (4) sublicense, rent, or lease the Program."

Thus, the ratio and principle laid down by the Hon’ble Supreme Court is clearly applicable on the facts of the assessee’s case and accordingly we hold that consideration received for supply of software cannot be taxed as royalty under India German DTAA.

Thus, the ratio and principle laid down by the Hon’ble Supreme Court is clearly applicable on the facts of the assessee’s case and accordingly we hold that consideration received for supply of software cannot be taxed as royalty under India German DTAA.

Accordingly, we hold that this issue is covered in favour of the assessee not only in its own case as well as by the judgment of the Hon’ble Supreme Court and therefore, we hold that income derived by the assessee from supply of software cannot be subject to taxation as royalty either under Income Tax Act or under the treaty. Thus, ground Nos. 2-5 raised by the assessee are allowed.”

6.1. Respectfully following the aforesaid decision of the Coordinate Bench in assessee’s own case, wherein the issue has been examined in detail after considering the relevant statutory provisions, judicial precedents and the factual matrix, we find no reason to deviate from the view already taken. Since the facts and circumstances in the year under consideration are identical, and

12 I.T.A. No. 5803/Mum/2025 & I.T.A. No. 5804/Mum/2025 no distinguishing feature has been brought to our notice by either side, the findings and directions contained in the said order are squarely applicable to the present assessment year. Accordingly, this issue is decided in terms of the directions contained therein, and the Assessing Officer is directed to give effect to the same.

We have perused the submissions advanced by both sides in light of the records placed before this Tribunal. This issue pertains to the existence of an Association of Persons (AOP) and its taxability. It is noted that the Coordinate Bench in A.Y. 2009–10 has elaborately adjudicated this issue and observed as under:-

“17. Ground Nos. 6-8 of assessee’s appeal and ground No.2-3 of Revenue’s appeal regarding Constitution of AOP which has been argued at length by both the parties. 18. The brief facts qua the issue are that the assessee, Siemens AG has received payments from various entities like Delhi Metro Rail Corporatin (DMRC), Reliance Industries Ltd, MCC PTA India Corp. Pvt. Ltd. Tata Power Ltd. Chemtrois Engineering Ltd. etc. in respect of off-shore supplies of electrical equipments etc., as well as services. During the year under consideration DMRC project itself involves 75.81% of the total turnover of off-shore supplies and 96.13% of the turnover of off-shore services and the controversy revolves around this contract, whether the project done by Siemens Ltd. Seimens AG constitue AOP a separate tax entity. 19. Delhi Metro Rail Corporation Limited ('DMRC') sought to extend Line-3 in Phase-II of the Mass Rapid Transport Systems for Delhi under the Japanese Yen Credit Loan. In this regard, it had inter alia invited tenders for design, manufacture, supply, installation, testing and commissioning of train control and signaling system on the extensions, integration with existing Line- 3 systems for the BS03 project. Considering the terms and conditions of the tender documents, the assessee, Seimens AG and Siemens Limited desired to participate in the project and mutually agreed to work together in good faith on an exclusive basis during

13 I.T.A. No. 5803/Mum/2025 & I.T.A. No. 5804/Mum/2025 the preparation and submission of the tender proposal for the project and to execute the project in their respective and independent scope of work if the tender proposal was accepted. For this purpose, a Memorandum of Understanding dated 11.09.2006 (MOU) was entered into between the assessee and Siemens Limited. The relevant MoU has been filed in the paper book from pages 540-562. The clauses therein, as may be relevant to adjudicate the issues under consideration, are as under: i. That the said arrangement was established only for the limited purpose of representation and dealings with DMRC with independent and separate scope of work as set-forth therein. That the parties shall be liable jointly and severally vis-à-vis DMRC for the obligations of the project in accordance with the terms and conditions of the tender documents. However, such joint and several liability shall not extend to any third party other than DMRC, nor for any purpose other than the project and each party shall be liable in respect of its separate and independent scope of work set forth therein (refer clause 1.2) ii. Nothing in the BS03 contract shall be deemed to constitute, create, give effect to or otherwise recognize a corporation, association, partnership, joint venture or formal or informal business entity of any kind. It shall also not be construed as providing for common management, capital contribution and sharing of profit and losses arising out of the project. (refer clause 1.3)

iii. The scope of work to be carried out by Siemens Limited was as specified in MOU (refer Clause 5) and such scope of work to be carried out by the assessee was as specified in the MOU (refer Clause 6) iv. Each party shall be solely and entirely responsible to the other party for the performance of the contract in respect of its scope of work and for any or all liabilities arising in connection therewith. In this regard, each party would indemnify and hold harmless the other party from all costs, claims, actions, expenses or liabilities incurred by or imposed upon the other party as result of or in connection with its failure, breach, delay or any other default in the performance of its obligations (refer clause 9.1) v. The payment terms were as agreed in Clause 10 thereof entitling Siemens Limited to invoice and receive payment from DMRC for the scope of its work as set out in clause 5, while Siemens AG to invoice and receive payment from DMRC for the scope of its work as set out in clause 6. 20. Before us, Ld. Sr. Counsel Mr, Pardiwala submitted that the scope of work to be carried out by each of the parties to the

14 I.T.A. No. 5803/Mum/2025 & I.T.A. No. 5804/Mum/2025 agreement was separate and identifiable. Since, each party had to independently carry out the work falling within its respective scope there was no joint management and control except for co- ordination required for smooth execution of the project. Though, they were jointly and severally liable to DMRC, they have agreed to indemnify the other party for loss suffered by them in view of any default by either party. That the arrangement was to directly receive consideration relating to the individual scope of work carried out by the respective parties and there was no sharing of profits or losses. Theoretically, it was possible that one of the parties may make a profit while the other may make a loss. It has been submitted that, a bare perusal of the MOU shows that no Association of Person ('AOP') came into existence Limited) between the assessee and Siemens Limited 21. Since, the assessee, Seimens AG and Siemens Limited were successful in the tender, the project was awarded to them, and a contract dated 08 10.2007 was entered into between DMRC on one side (as the Employer) and the assessee and Siemens Limited on the other side (as the Contractor/s). Relevant contract has been placed before us at pages 510 to 582 of the Paper-book. 22. It has been pointed out from the contract of DMRC and as from the MoU, that there were four streams of income which has arisen from the execution of the said project being income from: (a) offshore supply of equipment, (ii) offshore rendering of services, (iii) onshore supply equipment and (iv) onshore rendering of services. Of the above, the assessee had to perform the former two activities and Siemens Limited had to perform the later two. In respect of individual work to be carried out by each of the parties they have raised their respective invoices and received payments in respect thereof. Siemens Limited has offered the income arising to them from the onshore supply of equipment and the onshore rendering of services which position

stands accepted in the assessment order passed in their case on a substantive basis. Similarly, the income arising from offshore rendering of services has been offered for tax by the assessee herein which has been accepted by the AO in the assessment order passed by him. 23. Thus, the issue arising in the grounds before us is, whether the said arrangement will constitute AoP between the assessee, Seimens AG and Siemens Ltd. 24. In the draft assessment order, the ld. AO has alleged that the income earned by the assessee from BS03 contract is in the nature of composite contract and the income therefrom is subject to

15 I.T.A. No. 5803/Mum/2025 & I.T.A. No. 5804/Mum/2025 tax on account by and large on the following observations made by him:- - The BS 03 Contract is a singular one even with a lump-sum payment for all services and supplies. - The BS 03 Contract is an indivisible one having closely inter- related elements of on-shore as well as off-shore supplies as well as services. - In sum and substance, the BS 03 contract is a composite one with no specific assignment or distribution of scope of work. Even para 5 and 6 of the MoU merely fixes the responsibility by making one of the parties as 'member-in- charge' and the paras do not specify that the relevant works have to be performed by the designated members only - On a reading of the contract entered into in the context of the object sought to be achieved by the contract, the conclusion is inevitable that it is a contract for installation and commissioning of equipment(s) which the tenderer itself has supplied and has been commissioned through an associated enterprise upon association and assignment by the tenderer. Hence, it is an indivisible and composite contract. - Through the cross-fall breach clause enshrined in Clause 9, the very nature of the contract becomes singular and composite. Any claims for an artificial division of the contract can be ignored. - In performance of the Contract, the assessee along with, Siemens Limited (SL), India, entered into an 'Consortium' arrangement (The term 'arrangement' is used as no 'Agreement" in that respect has been furnished by the Assessee) in respect of which no detail has been furnished. Hence, such an consortium arrangement appears to be informal but binding due to associated nature of the 2 parties. In such a scenario, association of 2 persons, viz., Siemens AG and Siemens Limited (India) has been formed to undertake the contract. - It is noteworthy that despite consortium of part of the contract, Siemens AG was to be solely bound by the terms of the tender and was to be liable to the Consortium Leader/lead partner for the performance of all obligations under the contract

- The Permanent Establishment of Siemens AG in this case, Siemens Limited (India), is directly involved in the relevant contract as an 'associate of parts of the contract and directly stands to profit from the involve transaction.

16 I.T.A. No. 5803/Mum/2025 & I.T.A. No. 5804/Mum/2025 25. Based on the above finding, the AO has alleged the existence of an AOP between the Seimens AG and Siemens Limited and held that the income from offshore supplies should be taxed in the hands of the said AOP. Accordingly, the AO proposed that the income arising from offshore supplies was taxed in the hands of the AOP on substantive basis and in assessee's hand only on protective basis. 26. The ld. DRP vide its directions held that the issue relating to constitution of the AOP cannot been gone into and the issue relating to taxability of offshore supply of equipment is considered on the basis as if a substantive assessment thereof has been made in the assessee's hands. The ld.DRP relied upon the judgment of the Hon’ble Supreme Court in the case of Ishikawajma-Harima Heavy Industries Limited (2007) 158 Тахman 259 (SC) and the tax Treaty between India and Germany including the protocol thereto and concluded that the income arising from the offshore supply of equipment is not chargeable to tax in India. The DRP has also followed the judgment of the Hon'ble Bombay High Court in the assessee's own case in ITA No.1033 of 2010 for the AY 1997-98 and ITA No.5591 of 2010 for AY 1999-00 which is to the same effect. 27. However, pursuant to ld. DRP’s direction, the ld. AO while passing the final assessment order replicated the entire text from the draft assessment order and followed the DRP directions of non- taxability of offshore supplies in the hands of assessee. While the DRP's directions regarding the non-taxability of income from offshore equipment supply thus remain unchallenged by the Revenue before this Tribunal. Hence, the matter concerning the constitution of an AOP is the only issue for adjudication before this Tribunal. 28. We have heard both the parties and also perused the observation and the findings of the ld. AO whether the contract receipts from DMRC would be taxed as AOP of Siemens AG and Siemens Ltd. The term AOP has not been defined under the provisions of the Income-tax Act, 1961 ('the Act'). However as per Section 2(31) of the Act while defining "person' includes under clause (v) "an association of persons or body of individuals whether incorporated or not." The explanation to Section 2(31) of the Act clarifies that an AOP shall be deemed to be a person whether or not such association was formed, with the object of deriving income, profits or gains.

17 I.T.A. No. 5803/Mum/2025 & I.T.A. No. 5804/Mum/2025

Court decisions on the subject. The Supreme Court in the case of CIT v. Indira Balkrishna [1960] 39 ITR 546 (SC) has held that to constitute an AOP, earning of income by joining together in a venture and sharing of profits or loss is essential. Further the Supreme Court in the case of G. Murugesan & Bros. v. CIT [1973] 88 ITR 432 (SC) held that the finding members "joined for common purpose or common action" or they helped in producing income to form an AOP is essential. Thus, it is evident that there must be a common design to produce income and in the absence of such a common design, there cannot be an association. Mere existence of common interest or the fact that the persons receive income jointly or that they are joint owners of the income yielding property is not enough. 30. From the above-mentioned decisions, it can be concluded that the following are the essential ingredients of an AOP: - joining together by two or more persons, - volition or will to come together, - for the purpose of producing income, - common management of affairs, and - sharing of profit or loss between the members of AOP. These ingredients are cumulative and not exclusive. All of them must be present for an entity to constitute an AOP. Even if one of the ingredients is absent, then such an association cannot be assessed in the status of a ΛΟΡ.

18 I.T.A. No. 5803/Mum/2025 & I.T.A. No. 5804/Mum/2025 submitted similarities between assessee’s case and the case of CIT vs. Linde AG, Linde Engineering Division vs. DDIT in the following manner:-

Factual Position Points in the considere contract Points for d by Delhi under No. considera High considera tion Court in tion case of (DMRC- Linde AG BS03 Contract)

ONGC DMRC Petro floated a Additions tender Limited notice (OPAL), inviting floated a bids for tender executing notice the work inviting (including bids for undertakin executing g all the work activities (including and undertakin rendering g all all activities services) and for the rendering design and all constructio services) n of a rail- for the based Facts of 1 design, mass the case engineerin transport g, system. procureme SAG and nt, SL entered constructio into a MOU n, whereby installation both the , parties commissio agreed to ning and form a handing consortium over of a , for jointly plant. The submitting project a bid to was to be secure the executed contract. on turnkey The said basis. MOU also Linde AG segregates and the scope Samsung of

19 I.T.A. No. 5803/Mum/2025 & I.T.A. No. 5804/Mum/2025 Factual Position Points in the considere contract Points for d by Delhi under considera High No. considera tion Court in tion case of (DMRC- Linde AG BS03 Contract)

Engineerin responsibil g Company ities Ltd. between (Samsung) consortium entered a members. Memorand The um of contract Understan was ding (MOU) awarded whereby to the both the consortium parties . agreed to form a consortium , for jointly submitting a bid to secure the contract for execution of the aforesaid project. An internal MOU was also executed between the two parties to segregate the scope of responsibil ities between them. The contract was awarded to the consortium .

Whether Issues 2 — the under consortium

20 I.T.A. No. 5803/Mum/2025 & I.T.A. No. 5804/Mum/2025 Factual Position Points in the considere contract Points for d by Delhi under considera High No. considera tion Court in tion case of (DMRC- Linde AG BS03 Contract)

considerat could be ion treated as an AOP?

Clause 1.2 of the MOU forming part of the Contract states as Clause 4.8 under; of the MOU "…the expressly Parties provided mutually that "the agree and CONSORTI confirm UM shall … that they the Parties shall mutually constitute constitute an an unincorpor unincorpor ated ated arrangeme arrangeme nt nt Contractu establishe establishe al d for the 3 d for the document limited limited s specify purpose of purpose of representa representa tions and tions and dealing dealing with with DMRC ONGC/OP with AL with independe independe nt and nt and separate separate scope vis- scope of a-vis work as DMRC for set forth in the the MOU obligations (Para 38)" of the Project in accordanc e with the terms and conditions

21 I.T.A. No. 5803/Mum/2025 & I.T.A. No. 5804/Mum/2025 Factual Position Points in the considere contract Points for d by Delhi under considera High No. considera tion Court in tion case of (DMRC- Linde AG BS03 Contract)

of the Tender document. Such Joint and Several Liability shall not extend to any third party other than the Project and each one will be liable in respect of its separate and independe nt scope of work set forth herein." Clause 1.3 of the MOU forming part of the Contract states as under: "…Nothing in the BS03 Contract Agreement shall be deemed to constitute, create, give effect to, or otherwise recognize a cooperatio n, associatio

22 I.T.A. No. 5803/Mum/2025 & I.T.A. No. 5804/Mum/2025 Factual Position Points in the considere contract Points for d by Delhi under considera High No. considera tion Court in tion case of (DMRC- Linde AG BS03 Contract)

n, partnershi p, joint venture or formal or informal business entity of any kind (incorporat ed or not incorporat ed)."

Responsibi lities of each Nature of member work were undertake separate n and and capable of independe being nt. Neither executed of the by each Scope of members member is 4 work had any very much specified role to play different with as defined respect to in Clauses the scope 5 and 6 of of work the MOU, which was forming allocated part of the to the other Contract member (Para 39)

The allocation of the work was done in such a 5 — — manner that each member was required to

23 I.T.A. No. 5803/Mum/2025 & I.T.A. No. 5804/Mum/2025 Factual Position Points in the considere contract Points for d by Delhi under considera High No. considera tion Court in tion case of (DMRC- Linde AG BS03 Contract)

perform work which was within its field of expertise and could not be performed by the other party. The work to be performed by both the members was separate, definite & divisible. (Para 40)

The said MOU formed an integral part of the Contract The MOU entered between into SAG and between SL also Linde, forms a Samsung part of the and OPAL 6 — Contract and was which has appended been duly as accepted Annexure J and to the said stamped Contract. by DMRC And, to that extent OPAL also recognized the relationshi p between

24 I.T.A. No. 5803/Mum/2025 & I.T.A. No. 5804/Mum/2025 Factual Position Points in the considere contract Points for d by Delhi under considera High No. considera tion Court in tion case of (DMRC- Linde AG BS03 Contract)

Linde and Samsung.

The annexures to this 7 — agreement included a Gantt Chart wh

25 I.T.A. No. 5803/Mum/2025 & I.T.A. No. 5804/Mum/2025 iii. interchangeability or re-assignment of work and overseeing each other's work was not possible; iv. each party did not act as an agent of the other; v. though the performance guarantee was given by MRMB Consortium, the fact remains that DMRC insisted on a separate guarantee and undertaking from the parent company of each member; vi. above all, there is a specific declaration that "nothing in the agreement is intended or shall be construed as creating a partnership, joint venture or any other legal entity among the parties": vii. the profits and losses are being borne by the individual members themselves and common expenditure not being incurred by them; viii. the joint and several liabilities towards the employer have been apparently introduced as a safeguard to Company to have better hold over the Consortium members.

Points as discuss Factual ed by Points for Position AAR in No. Considerat in the the case ion present of contract Hyunda i Rotem Co.

Nature of Nature of work work undertak undertake en by n and each capable of member being is executed qualitati by each Scope of 1 vely member is work different very much and each different member as defined has in Clause 5 distinct and 6 of skills. the MOU, Work forming assigned part of the

26 I.T.A. No. 5803/Mum/2025 & I.T.A. No. 5804/Mum/2025 Points as discuss Factual ed by Points for Position AAR in Considerat in the No. the case ion present of contract Hyunda i Rotem Co.

to one Contract. party Work cannot assigned be to one undertak party en or re- cannot be allocated undertake to n or re- another allocated member to another member

Evaluation of each member has been done separately. SL is the lead member of Evaluati the on done consortium by DMRC , as Evaluation separate 2 required of members ly in by DMRC, relation only for to each performing member the administra tive and liasioning role on behalf of the consortium .

Clause 10 Each of the MOD forming Payments member part of the in the name does not 3 Contract of act as an provides consortium agent of for the other separate invoicing

27 I.T.A. No. 5803/Mum/2025 & I.T.A. No. 5804/Mum/2025 Points as discuss Factual ed by Points for Position AAR in Considerat in the No. the case ion present of contract Hyunda i Rotem Co.

and payments in respect of the separate scope of work of each consortium member. Each member does not act as an agent of the other.

Clause 9.1 of the MOU forming part of the Contract states as The joint under: "..... and Joint and several several liabilities liability towards means that the the employer members Joint and is a of several safeguar consortium 4 liability d to shall be towards the DMRC to jointly and DMRC have severally better liable to hold over the the Employer consortiu for the m fulfillment members of the . terms of the Contract. However, between the members

28 I.T.A. No. 5803/Mum/2025 & I.T.A. No. 5804/Mum/2025 Points as discuss Factual ed by Points for Position AAR in Considerat in the No. the case ion present of contract Hyunda i Rotem Co.

of the consortium , each Party shall indemnify and hold harmless the other Party to its MOU from all costs, claims, actions, expenses or liabilities incurred by or imposed upon the other Party as a result of or in connection with its failure, breach, delay or other default in the performan ce of its respective obligations under the contract. Thus, the joint and several liability clause imposed by DMRC is only to safeguard itself by having a

29 I.T.A. No. 5803/Mum/2025 & I.T.A. No. 5804/Mum/2025 Points as discuss Factual ed by Points for Position AAR in Considerat in the No. the case ion present of contract Hyunda i Rotem Co.

better hold over the parties for timely and successful completion of the project."

Clause 1.3 of the MOU forming part of the Contract states as Specific under; declarati "Nothing in on in the BS03 SCA that Contract the Agreement members shall be do not deemed to intend or constitute, shall be create, give Contractual construe effect to, or documents d as otherwise 5 specify that creating recognize a there is no partners co- AOP hip, joint operation, venture associatio or any n, other partnershi legal p, joint entity venture or among formal or the informal parties business entity of any kind (incorporat ed or not incorporate d)."

Insurance Profit & The 6 in the joint losses insurance name of borne by qua the

30 I.T.A. No. 5803/Mum/2025 & I.T.A. No. 5804/Mum/2025 Points as discuss Factual ed by Points for Position AAR in Considerat in the No. the case ion present of contract Hyunda i Rotem Co.

DMRC and individu contract consortium al has been members taken by themselv each es and member common separately expendit and not by ure not the being consortium incurred . by them

31 I.T.A. No. 5803/Mum/2025 & I.T.A. No. 5804/Mum/2025 37. Thus, ld. Counsel submitted that the action of the ld. AO bringing to tax other streams of income in the hands of the assessee and Siemens Ltd separately would itself show that no AOP has been constituted between the parties. 38. The case of the AO has been elaborated specifically in paras 11.7 to 11.9 of the final assessment order, whereby the aspects which have been put against the assessee for constitution of an AOP are that, the BS 03 contract between DMRC on the one side and the assessee and Siemens Limited on the other side is a single and composite one, where the contractors are jointly and severally liable to the employer A24 for execution of the contract. In this regard, AO has made reference to ‘Cross Fall Breach Clause’ in the said contract. AO has also made reference to the orders of the Authority for Advance Ruling in the case of Linde AG and Alstom Transport SA which according to the AO, on similar facts and circumstances an AOP has been found to be

constituted. But now this AAR decision has been reversed by the Hon’ble Delhi High Court. 39. On the other hand, ld. DR has filed his written submissions which is reproduced as under:- From perusal of the facts and circumstances of the case, it appears that the arguments of the assessee are not tenable on account of the following broad reasons:

(1) The income of the Assesses is being earned from Indie in respect of a composite contract having significant on-shore elements also. In view of this, the income of the Assessee is taxable in India in terms of Sec. 9(1)() of the Income Tax Act 1961. The assessee has entered into a Consortium arrangement with its Indian A.E. Siemens (India) Limited: The Assessee is having regular income from India from the contract(s); hence the Assessee has a clear-cut business connection in India. In order to appreciate the nature of the contract and the associated income, the details of the contract and related information are discussed in detail below: 7 Scope of Contract The DMRC and Siemens AG Siemens (India) Limited Consortium Contract Agreement (BS 03) dated 08.10.2007 between as per

32 I.T.A. No. 5803/Mum/2025 & I.T.A. No. 5804/Mum/2025 Clause 1 mentions that DMRC agrees to hire and the Contractor agrees to be hired to implement the design, manufacture, supply, install and commission Train Control & Signaling system for Extension of Line 3 of the Mass Rapid Transport System Phase I Project under the terms and conditions specified in this Contract Agreement and the other Contract Documents attached hereto Delhi Metro Rail Corporation, hereinafter referred to as DMRC floated Instruction to Tenderers (ITT) in respect of the relevant Contract BS-03 with the following scope of work "Instructions to Tenderers Volume I The work comprises design, manufacture, supply, installation, testing and commissioning Train Control & Signaling system on the extensions, integration with existing Line systems, supply of spares, and the training of Operation and Maintenance personnel “the Contract has established a consortium in accordance with Indian law and offered a tender for the design and construction of a rail based mass rapid transport system by procuring the design, execution and completion, and remedying any defects in the Works of the design, manufacture, supply, installation and commissioning of Train Control & Signaling system including training of operation and maintenance personnel, supervision of maintenance of Train Control & Signaling system, supply of spares, and Operation and Maintenance Manuals and agrees to undertake performance of work." Clause 2. Obligation of the Contractor

...To design, manufacture, supply, install, test and commission of Train Control & Signaling system, and To supply spares, O&M Manuals, training of 08M personnel, supervision of maintenance, and To provide all equipment, materials, labor and other facilities requisite for or incidental to the successful completion of the Works" In the tender process, the assessee, Siemens AG with its Associated Enterprise Siemens (India) Limited was the successful bidder.

DMRC and the assessee entered into a contract on 08.10.2007. In the contract DMRC has been described as "Employer" and the Consortium comprising of Siemens (India) Limited and the assessee Siemen AG (Transport Systems TS R.A.) has been described as

33 I.T.A. No. 5803/Mum/2025 & I.T.A. No. 5804/Mum/2025 "Contractor". It has been mentioned that Siemens (India) Limited and Siemens AG would be jointly and severally liable for undertaking the contract, and collectively referred to as the Contractor It is relevant to set down the terms of the contract at this stage:

Clause 4 Value of Work and Completion Time

The Employer agrees to pay for the total cost of the Works and the Contractor agrees to accept the sums mentioned below in the Following currencies, to be the total cost for the Work carried out by him. Total Fixed Lump Sum Price.

Foreign Currencies: Euro 23,573, 726 (Euro Twenty Three Million Five Hundred Seventy Three Thousand and Seven Hundred 'Twenty Six only); and In Local Currencies: INR 347,476,911 INR Three Hundred Forty Seven Million Four Hundred Seventy Six Thousand and Nine Hundred Eleven only)

Hence, in this case the Contract document is a singular one even with a lump-sum payment for all services and supplies. 8. Further, the Annexure A to the MoU consists of a list of schedules which only list down the value of activities and does not clearly spell out the recipient of the amounts:

Hence, it is clear that the Contract is an indivisible one having closely inter-related elements of on-shore as well as off-shore supplies as well as services. Apart from the Contract BS-03, another old Contract 3503 has also been awarded to the relevant consortium: The Contract Agreement (3S 03) dated. 10.09.2004 between DMRC and Siemens AG (Transport Systems)-Siemens (India) Limited Consortium as per Clause 1 mentions that: "Clause 1

34 I.T.A. No. 5803/Mum/2025 & I.T.A. No. 5804/Mum/2025 DMRC agrees to hire and the Contractor agrees to be hired to implement the design, manufacture, supply, install and commission Train Control & Signaling and Telecommunication systems 3S03 of the Mass Rapid Transport System - Phase One Project under the terms and conditions specified in this Contract Agreement and the other Contract Documents attached... Hence, the Contract of 3S 03 is akin to the BS 03Contract are described in detail. Therefore, it is clear and evident that in sum and substance, the BS 03 as well as 3S 03 contract is a composite one with no specific assignment or distribution of scope of work. Even the para 5 and 6 of the MoU merely fixes the responsibility by making one of the parties as 'member-in charge' and the paras do not specify that the relevant works have to be performed by the designated members only.

The purpose of the Contract can be laid down to be as under: ".. to implement the design, manufacture, supply, install and commission Train Control & Signaling system for Extension of Line 3 of the Mass Rapid Transport System (MRTS) -Phase I Project..."

However, the purpose for which the tender was invited by DMRC was for commissioning of Train Control & Signaling System. It was not for supply of offshore equipments and training independently of the designing, installation and commissioning project. Nor was it for independent installation and commissioning, divorced from the design and supply of the equipments necessary. Such a contract has necessarily to be read as a whole and is not capable of being split up.

35 I.T.A. No. 5803/Mum/2025 & I.T.A. No. 5804/Mum/2025 On analysis the terms of contract in the context of the tender floated and the purpose sought to be achieved, it is clear that the contract involved herein is a composite contract and it cannot be dissected into parts. Clearly, for the purpose of taxation, the contract can be considered as one, for installation and commissioning of a railway MRTS project in India.

On a reading of the contract entered into in the context of the object sought to be achieved by the contract, the conclusion is inevitable that it is a contract for installation and commissioning of equipment(s) which the tenderer itself has supplied and has been commissioned through an associated enterprise upon association and assignment by the tenderer. Hence, it is an indivisible and composite contract.

The object in floating the tender is to get the MRTS commissioned and installed at sites indicated, in furtherance of Train Control& Signaling system. Hence, on a look at the contract in the light of the objective sought to be achieved, there appears to be no substance in the argument that the contract contains multiple distinct pats and they have to be separated for the purpose of taxation. It cannot be held that both the parties to the contract intended to treat the claimed scopes of work to be treated separately. Thus, on a true construction of the contract in question, it is clear that the income there-under has arisen to the assessee in Indian a composite manner.

"...4. Siemens Limited will be the Consortium Leader with the mandate to sign and submit all documents required to be submitted by the consortium in accordance with the requirement included in the Project Tender documents/bid documents, as well as to act as liaison officer for the consortium members each of whom has independent and defined scope of work under this MOU "

Siemens Limited shall be the member exclusively and independently in charge of the Consortium in so far as the

36 I.T.A. No. 5803/Mum/2025 & I.T.A. No. 5804/Mum/2025 competence limited to onshore activities under the offer is Concerned...

Siemens AG shall be the member in charge of the Consortium in so far as the technical competence in relation to do sign, manufacture, offshore supply of the products and Technical support services in relation there to under the offer are Concerned..." Siemens AG and Siemens Limited agree to co-operate with each other in the Project on an exclusive basis as a consortium members and will be Jointly and Severally liable for the execution of the Contract work...

Liability of Parties: The lead partner in charge shall be authorized to incur liabilities, receive payments and receive instructions for and on behalf of other partner subject to that- Each Party shall be solely and entirely responsible to the other Party for the performance of the Contract in respect of its Scope of Work and for any and all liabilities arising in connection therewith. Each Party shall indemnify and hold harmless the other party from all costs, claims, actions, expenses or liabilities incurred by or imposed upon the Party as a result of or in connection with its failure, breach, delay or other default in the performance of its obligations under the Contract referred to for the purposes of this clause as "default"...

Each Party shall undertake all reasonable efforts to mitigate the loss in the event of the other Party's default under the Contract.

Hence, through the cross-fall breach clause enshrined in Clause 9, the very nature of the contract becomes singular and composite.

Any claims for an artificial division of the contract can be ignored.

In the case of Dongfang Electric Corporation, China V. DDIT (IT)- 1(1), Kolkata, the following has been held: "While one may have legitimate issues as to whether these observations regarding "looking at the transactions as a whole and not adopting dissecting approach" can indeed be applied in all cases in which separate contracts are entered into for offshore

37 I.T.A. No. 5803/Mum/2025 & I.T.A. No. 5804/Mum/2025 supplies and onshore services, in our considered view, these observations are certainly applicable in the cases in which the values assigned to the onshore services are prima facie unreasonable vis-a-vis values assigned to the offshore supplies, which make no economic sense when viewed in isolation with offshore supplies contract. To that limited extent, our views are the same as of the learned Authority for Advance Ruling. In other words, the transactions are to be essentially looked at as a whole, and not on standalone basis, when the overall transaction is split in an unfair and unreasonable manner with a view to evade taxes. In order that such a situation can arise, it is sine qua non that while the assessee submits the bids for different segments (e.g. offshore and onshore in the present case) separately, these bids are considered together, as a single cohesive unit, by the other party, and this fact must be apparent from material on record. On the facts of this particular case, we have also noted that each set of contracts, i.e. offshore supply contract and onshore services and supply contract, has a cross fall breach clause which provides that a breach in one contract will automatically be classified as breach of the other contract. ... While these clauses undoubtedly give an indication that the offshore supplies contract' and 'onshore services and supplies contract' are required to be viewed as an integrated contract, this fact by itself does not indicate that the onshore services and supplies contract is understated so as to avoid tax in the source country...

Hence, it is crystal clear that the Contract can be treated as a single, indivisible, composite Contract, which has been claimed by the assessee to be artificially split into several related and dependent parts.

Hence from the above discussion , it is found that the assessee had entered into a contract with DMRC for off shore supply and services only, that the payment therefore was received outside India and that the transaction of sale was not taxable in India, In such a scenario, the following factors come into play in respect of the taxability of the underlying transaction to the instant contract. 11. Ratio of Roxar Maximum Reservoir Performance WLL: In the recent landmark ruling made by the Hon'ble Authority for Advance Rulings (AAR) In Re Roxar Maximum Reservoir Performance WLL (AAR), it has been held that a composite contract for installation & commissioning cannot be split so as to exempt the profits from offshore supply of goods. It has been held that:

38 I.T.A. No. 5803/Mum/2025 & I.T.A. No. 5804/Mum/2025 Decisions and Rulings relied on by learned counsel of the assessee have now to be considered in the context of the pronouncement of the Supreme Court in Vodafone International Holdings BV Netherlands vs. Union of India and another (345 ITR 1 (SC). In that recent decision, a three judge bench of the Supreme Court has laid down that what is needed is to consider the transaction in its entirety and to look at the transaction as a whole. The Supreme Court has advocated that a transaction must be looked at and not looked through. The learned Chief Justice has held "it is the task of the Revenue / Court to ascertain the legal nature of the transaction and while doing so, it has to look at the transaction as a whole and not adopt a dissecting approach". This injunction has been followed by this Authority in its recent Ruling in AAR 962 of 2010 "

Though in Ishikawajima-Harima, a two judge bench of the Supreme Court had adopted a dissecting approach by dissecting a composite contract into two parts and holding one of the parts not amenable to taxation in India, this cannot be followed in view of the 3 Judge verdict in Vodafone International Holdings vs. UOI 345 ITR 1 (SC) where it has been held that a transaction has to be "looked at and not looked through" and seen as a whole and not by adopting a "dissecting approach". A contract for sale of goods differs from a contract for installation and commissioning of a project. The tests relevant for considering where the title to the equipment, passed would not be relevant while construing the terms of a supply and performance contract. On facts of this case, the contract is for Train Control & Signaling system of rail-based mass rapid transport system and not one for sale of equipment or fitting of the equipment. It is a composite & indivisible contract for supply and erection at sites within the territory of India and cannot be split. The income accrued in India and was assessable as business income.

It has been held by the Hon'ble AAR that:

A contract has to be read as a whole. The purpose for which the contract is entered into by the parties is to be ascertained from the terms of the contract. In the case on hand, ONGC clearly called for a contract for "services for supply, installation and commissioning of 36 manometer gauges". The purpose of the contract is the installation of the gauges at site to enable ONGC to carry out its operations. I have quoted earlier the relevant portion of the contract. On a reading of the same, there cannot be any doubt that the contract in question was for erection and commissioning of 36

39 I.T.A. No. 5803/Mum/2025 & I.T.A. No. 5804/Mum/2025 manometer gauges for the use of ONGC. The contract is clearly not one for sale of equipment. Nor is it one for mere erection of the equipment. It is a composite contract for supply and erection at sites within the territory of India. What is paid for by ONGC is for the supply and erection done in India. The payment is received by the assessee for the performance of the contract as a whole in India. It is therefore clear that the income to the assessee accrued in India.

A contract for sale of goods differs from a contract for installation and commissioning of a project. The tests relevant for considering where the title to the equipment, passed would not be relevant while construing the terms of a supply and erection contract. Therefore the facts relied on by counsel for the assessee to argue that the title to the gauges passed outside the country, are of no avail. 12. Siemens AG and Siemens Ltd. (India) form an A_QP - Ratio of Alstom_T_ransport SA:

In this case for the purpose of obtaining the Contract, the assessee Siemens AG has formed a 'Consortium' with an associate enterprise, Siemens Limited (India), as 'Consortium Partner1 and has shared the responsibilities of the contracts. In performance of the Contract, the assessee along with, Siemens Limited (SL), India, entered into an 'Consortium' arrangement (The term 'arrangement' is used as no Agreement' in that respect has been furnished by the Assessee) in respect of which no detail has been furnished. Hence, such an consortium arrangement appears to be informal but binding due to associated nature of the 2 parties. In such a scenario, association of 2 persons, viz., Siemens AG and Siemens Limited (India) has been formed to undertake the contract. However, it is noteworthy that despite consortium of part of the contract, Siemens AG was to be solely bound by the terms of the tender and was to be liable to the Consortium Leader/lead partner for the performance of all obligations under the Contract. As discussed in the above section, it is clear that the contract was one and indivisible and could not be split up as sought to be done by the assessee. The contract was one for Train Control & Signaling system of rail-based mass rapid transport system in India and the contract cannot be split up since essentially, it was a composite contract for the commissioning of an electrical transmission project. It appears that the contract has been deliberately split through an artificial 'consortium arrangement for no obvious reason of avoiding formation of a Permanent Establishment (At the site of installation and commissioning) in India and avoid taxability in India.

40 I.T.A. No. 5803/Mum/2025 & I.T.A. No. 5804/Mum/2025 Further, clearly, the Members of the Consortium viz. Siemens AG and Siemens Limited (India), who have come forward to execute the Contract, form an 'Association of Persons' (AOP) within the meaning of section 2(31) of the Income Tax Act. The following traits exist in the case of performance of the contract:

(a) There was clearly a common purpose in their coming together and common management. (b) The coming together was with the intention to undertake an activity with a view to earn profits. ( c) They were acting in concert in furtherance of their respective businesses. (d) The association member permitted 'associate' is also the associated enterprise of the assessee. As per proper appreciation of facts, the tender floated by DMRC was a composite tender. The bid submitted by the association of which the Siemens (India) Limited is the leader was for the work tendered. Subsequently, the contract that was entered into by the Consortium with DMRC. The object of the contract and the purpose of the contract were the designing, installation and commissioning of the Train Control & Signaling system. The contract provided for the payment for the work in lump and it cast liability on the Consortium for carrying out the work. A contract has to be read as a whole in the context of the purpose for which it is entered into. A contract for the designing, installation and commissioning of a project like the present one cannot be split up into separate parts as consisting of independent supply or sale of equipments and for designing, installation at the work site, leading to the commissioning and SO on. In the case on hand, on a true construction of the contract between the parties (DMRC- Consortium), it is obvious that it is a contract, the sole purpose of which is installation and commissioning of a Train Control & Signaling system and its delivery to DMRC.

Further, as per recent AAR ruling in case Alstom Transport SA vs. DIT (AAR) (A.A.R. No. 958 of 2010), it has been held that composite contract cannot be split to exempt profits from offshore supply of goods and a joint contract constitutes an AOP.

Hence, it is concluded that the assessee Siemens AG and Siemens Limited (India) form an A.O.P.

41 I.T.A. No. 5803/Mum/2025 & I.T.A. No. 5804/Mum/2025 Siemens (India) Limited and the assessee have got into the contract as Consortium partners.

The assessee and Siemens (India) Limited have come together for executing the project upon acceptance of the tender. The contract was for performing the entire work, and the two associates, Siemens AG & Siemens Limited (SL), India, came together to perform the contract.

The Members of the association were all in business and they came together in pursuance of an intention to promote their businesses.

The common object was to perform the contract and earn income there from.

There was a common object in the coming together. There was a common purpose and there was concerted action. It is a combination of persons formed for the promotion of a joint enterprise banded together, as per the language of the decision in B.N. Elias In re: B. N. Ellas, [1935] 3 I.T.R, 408]. On the facts of this case, it is clear that the assessee, alongwith the other member, formed an Association of Persons liable to be taxed as such.

The coming together of the members of the association is based on the tender floated for a particular work by DMRC. The coming together is to meet the performance obligations to the tenderer arising out of that tender notification. On winning the bid, the contract entered into is for the purpose of performing that obligation. Thus, the tender is the raise and entre and the contract with the tenderer is the foundation for the combination of the associates coming together to perform the obligation there under. After committing themselves to perform the contract in terms of the contract with the tenderer, however the members of the group divide the performance of the obligation that would not affect the nature and content of the obligation undertaken by them jointly. Their arranging the inter se relationship (As the 'Consortium members') while performing then obligation, cannot alter the status they acquire as association members in performing a joint obligation undertaken by the association.

42 I.T.A. No. 5803/Mum/2025 & I.T.A. No. 5804/Mum/2025 The source of the receipt in this case is the contract with DMRC and not the contract inter se or the understanding among the members of the association. Therefore, it is clear that what is relevant in this context is to consider the legal rights and obligations arising out of and undertaken under that composite contact/transaction to determine the status of the association as a person. Hence, the Association Members including the assessee and its related concern Siemens Limited, India, is a resident of India fiscal territory and is liable to be assessed as an Association of Persons and the income from the transaction was chargeable to tax in India.

Gist of Alstom Case (2012-TI-28-ARA-INTL) as applied to the instant Proceedings: In the Alstom case, the following ratio have been laid down which is applicable to the case in hand: As per Ground No. (i), it has been held that though in Ishikawajima- Harima 288 ITR 408 (SC), Hyundai Heavy Industries 291 ITR 482 (SC) & Hyosung Corp 341 ITR 18 (AAR)it was held that that a composite contract was capable of being dissected and it was open to the assessee to raise the contention that parts of the contract should be treated separately for the purpose of deciding whether income from the performance of that part of the contract arose onshore or offshore and that part of the income attributable to offshore transaction cannot be taxed in India; this is no longer good law in view of the larger bench decision of the Hon'ble Apex Court in Vodafone International Holdings BV Netherlands where it has been held that the transaction has to be looked at as a whole and not by adopting a dissecting approach. As per Ground No. (ii), it has been held that, on facts, the contract entered was a composite one for which a lump-sum consideration was paid. Such a contract cannot be split up into separate parts as consisting of independent supply or sale of goods and for installation at the work site, leading to the commissioning and so on. The ratio of Linde AG (AAR 962/2010) & Roxar Maximum (AAR) have been followed in the case.

In Ground No. (iii) it has been enunciated that as the assessee and the others came together for jointly executing the project, they constituted an A.O.P. & were liable to be taxed as such. The fact that between themselves, the members of the Association divide the performance of the obligation does not affect the nature and content of the obligation undertaken by them jointly.

43 I.T.A. No. 5803/Mum/2025 & I.T.A. No. 5804/Mum/2025 Findings of DRP: During the course of the proceedings before DRP , the findings of the DRP is as under:

"In the course of assessment proceedings, the assessing officer has made various additions under the Royalty and FTS on Accrual basis. The Assessing Officer has a/so held that the Income derived by the assessee under the consortium agreement with Delhi Metro Rail Corporation on account of offshore supply and offshore services is also liable to tax in India. In this regard, the AO has held that the income under the consortium agreement is liable to tax in the hands of an AOP consisting of the Assessee and Seimens limited i.e. another group company of the assessee. The AO has held that though the Income is primarily taxable in the hands of the AOP, in the event the income is subsequently held to be liable to be taxed in the hands of the assessee then the income on account of onshore supplies and services should also be considered as assessee's Income for the previous year .In this regard, the AO has estimated 5% of the total supplies as assessee's Income . 40. In rejoinder, ld. Counsel for the assessee submitted that in so far as reliance from the judgment of three Judges of the Hon’ble Supreme Court in the case of Vodafone International Holdings BV Netherlands vs. Union of India and another (supra) which has also been referred in AAr Ruling in the case of Linde AG, Linde Engineering Division, the same is not applicable in the fact of the present case and this has also been overruled by the Hon’ble Delhi High Court in the case of Linde AG, Linde Engineering Division (supra). Further, the Hon’ble Delhi High Court in the case of Nokia Networks OY [2012] 25 taxmann.com 225 which rejected the reliance placed by the Department on Vodafone International Holdings BV considering the same as not relevant and High Court relied on the Supreme Court in the case of Ishikawajima Harima Heavy Industries Ltd, (supra) and held that such contracts cannot be read as one by applying the “look at approach as prescribed in the decision of the Supreme Court in the case of Vodafone International Holdings BV. 41. After considering the aforesaid submissions and the facts as discussed above including the judgment referred and relied upon by both the parties, we find that this case is squarely covered by the decision of the Hon’ble Delhi High Court in the case of Linde AG which has been discussed in detail in the foregoing paragraphs including the judgment of AAR. From the perusal of the MOU dated 11/09/2006, it is clear that the parties had come together only with a view to participate in the tender where the scope of the work to be executed by each of the parties is separate and independent. There is neither any joint management nor any joint execution of

44 I.T.A. No. 5803/Mum/2025 & I.T.A. No. 5804/Mum/2025 the work. Further, there is no sharing of profits and losses between the parties and each of the party is entitled to the gross consideration to be received by them for executing their separate part of the work. Lastly, it has been agreed that though both the parties are jointly and severally liable to DMRC in respect of the entire contract, they have agreed to indemnify each other for losses suffered on account of defaults committed by the other. Thus, in these circumstances, we find that the prerequisite condition for constitution of an AOP being has not been fulfilled. 42. Once there are separate obligations to be performed and there is no overlapping of work and both the parties have their own monies payable under the contract independent of each other, then each party is entitled to raise the bill separately for the work carried out by it and assessee had received consideration separately for the supply carried out by it through offshore, it cannot be inferred that both the parties acted in consort to perform the contract together for the project. The nature of work undertaken is being executed by each member separately which has been clearly defined in Clause 5 and 6 of MOU. Once there is a separate invoicing and payments in respect of separate claim of work, then where is the question of treating them as AOP, because each member does not act as an agent of the other. In so far reliance placed on the ‘joint and several liability’ towards the DMRC as referred in Clause 9.1 has been imposed by DMRC, this was only to safeguard itself by having a better hold over the parties for timely and successful completion of the project which provides between the members of the consortium, each Party shall indemnify and hold harmless the other Party to its MOU from all costs, claims, actions, expenses or liabilities incurred by or imposed upon the other Party as a result of or in connection with its failure, breach, delay or other default in the performance of its respective obligations. 43. Lastly, Clause 1.3 of the MoU is very clear that nothing in the contract agreement shall be deemed to constitute, create, give effect to or otherwise recognize a corporation, association, partnership, joint venture or formal or informal business entity of any kind and the insurance qua the contract has been taken by each member separately and not by the consortium. Thus, we agree with the Ld. Sr. Counsel for the assessee that on these facts it cannot be held that there constitutes of AOP between Siemens AG and Siemens Ltd. Thus, this issue is decided in favour of the assessee and against department.”

7.1. Respectfully following the aforesaid decision of the Coordinate Bench in assessee’s own case, wherein the issue has

45 I.T.A. No. 5803/Mum/2025 & I.T.A. No. 5804/Mum/2025 been examined in detail after considering the relevant statutory provisions, judicial precedents and the factual matrix, we find no reason to deviate from the view already taken. Since the facts and circumstances in the year under consideration are identical, and no distinguishing feature has been brought to our notice by either side, the findings and directions contained in the said order are squarely applicable to the present assessment year. Accordingly, this issue is decided in terms of the directions contained therein, and the Assessing Officer is directed to give effect to the same.

Findings of the AO

8.1. In this connection it is explained by the assessee that it has entered into a consortium agreement for the design, supply, manufacturing, installation, testing and commissioning of the BSO3 project for DMRC on 8o Oct., 2007. In this connection, the assessee and SL have also signed a MOU dated 11/09/2006, regarding the scope of the work, responsibilities and price split for the contract. It is explained that the assessee's scope of work comprises of offshore supply and offshore services whereas SL, which is an Indian company, has to independently undertake the onshore supply and onshore services. The AO has taken a view that the assessee and SL constitute an AOP and the income from this project should be taxed in the hands of the said AOP. He has further held that income from this contract is being taxed in the assessee's hands only on protective basis.

8.1. It is submitted that assessee has no role to play in relation to the onshore supply and onshore services. According to the

46 I.T.A. No. 5803/Mum/2025 & I.T.A. No. 5804/Mum/2025 assessee, the income earned by it on account of offshore supply of goods, is not liable to tax in India as the entire transaction is completed outside the taxable territories. In this connection, the assessee has submitted that the same is not taxable both under the Act as well as the DTAA. On the other hand, Ld.AO considered the contract document as a single contract for a lumpsum payment for all goods and services. The Ld.AO held that since the contract is a single indivisible contract with closely connected elements of offshore and onshore supplies, the entire income arising from the contract is liable to tax in India. The Ld.AO thus proposed to tax the income arising out of the offshore supplies of goods made by the assessee.

8.2. In the course of DRP hearing, the assessee has submitted that though there was a single contract, the role of each of the parties has been clearly specified in the same. It is submitted that the assessee was liable only for the contract pertaining to offshore supply and the assessee did not have any role to play in respect of onshore activities, which are to be performed by SL.

8.3. It was further submitted that the income pertaining to the onshore activities has already been offered to tax by SL in its return of income and the same has been assessed to tax. It is further provided that there is no lump sum payment involved for all the services and supplies and the contract provides for separate consideration for which separate invoices have these raised and payments have been received. The assessee contended that merely because a joint and several liability clause has been incorporated in the agreement, the same cannot render the entire income to be liable to tax in India. The assessee further submitted that contrary

47 I.T.A. No. 5803/Mum/2025 & I.T.A. No. 5804/Mum/2025 to the submission of the Ld.AO that, it artificially divided the contract into parts, there is no such intention by the assessee.

8.4. Besides contending that the impugned amounts on account of offshore supply of goods is not liable to tax under the provisions of the I.T. Act, the assessee submitted that the same is not taxable even under the DTAA. The assessee also submitted that it does not have any PE in India, as the onshore activities has to be performed by an independent company, SL, which is separate and distinct from the assessee company.

8.5. The assessee relied upon the Clause 1(a) of the Protocol to Article 7 of the India-Germany DAA, where it has specifically been provided that in the event of direct supply of equipment by the head office or any other enterprise outside India, profits from the same will not be attributable to the permanent establishment of the same entity in India. Relying on these provisions, the assessee submitted that even if it is presumed that it has a PE in India, which is not so in fact, the profits from the offshore supply of goods and services cannot be attributed to such a PE.

8.6. The assessee's arguments and the contention of the Ld.AO have been examined. As far as taxability in hands of AOP, it is stated by assessee that ultimately no assessment in hands of AOP has been made in this case. Hence, the question of assessee and SL constituting an AOP is not gone into on substantive basis. It is observed that the Ld.AO held the impugned amounts to be liable to taxed in India both under the Act and under DTAA. In this connection, reliance was placed on the decision of the Authority for Advance Ruling(AAR) in the case of Roxar Maximum Reservoir

48 I.T.A. No. 5803/Mum/2025 & I.T.A. No. 5804/Mum/2025 Performance WLL reported in 349 ITR 189. In this said decision, the AAR referred to the decision of the Hon’ble Supreme Court in the case of Vodafone International Holdings BV Netherlands Vs. Union of India reported in in 345 ITR 1 and distinguished the earlier decision of the Hon’ble Supreme Court in the case of Ishikawajima Harima Heavy Industries Ltd., reported in (2007) in 158 Taxmann 259. The Ld.AO held that after the decision of Hon’ble Supreme Court in the case of the Vodafone(supra), the earlier decision of Hon’ble Supreme Court in the case of Ishikawajima Harima Heavy Industries Ltd.(supra), is no longer applicable.

It is noted that the issue involved in present case is considered by Hon’ble Supreme Court in the case of Ishikawajima Harima Heavy Industries Ltd(supra) wherein it is categorically held that income from such offshore supply of goods is not liable to tax in India under the Act. In so far as taxability under the DTAA is concerned, it is observed that the Protocol in the Indo German DTAA specifically deals with the same. Therefore, respectfully following the decision of Hon’ble Supreme Court in the case of Ishikawajima Harima Heavy Industries Ltd., and provisions of the Protocol to Article 7 in the India Germany DTAA, the Ld.AO is directed not to tax the income arising from offshore supply of goods.

As regards the reference to the decision of Hon’ble Supreme Court in the case of Vodafone International Holdings BV(supra), it is held that the observations of Hon’ble Supreme Court on the concept of ‘look-at' and look-through' principles are in an entirely different context. It is also observed in assessee's own case, coordinate bench of this Tribunal and Hon’ble Bombay High Court have decided the issue in its favour. In this connection, decision of Hon’ble

49 I.T.A. No. 5803/Mum/2025 & I.T.A. No. 5804/Mum/2025 Bombay High Court in assessee’s own case of A.Y:1999-2000 in ITA No. 5591 of 2010 A.Y. 1998-99 in ITA No. 5612 of 2010, and for A.Y. 1997-98 in ITA No.1033 of 2010 has been relied by the Ld.AR.

Respectfully following these decisions in assessee's own case and applying the principles laid down by Hon’ble Supreme Court in the case of Ishikawajima Harima Heavy Industries Ltd.(supra), the Ld.AO is directed not to tax the income arising from offshore supply of goods.

It is further noted that for assessment year 2009-10, this Tribunal gave a categorical finding that there is no PE in India. Further while considering Issue 4 herein above, it is held that no AOP is constituted in India due to the agreement between Seimens AG and Seimens Ltd.

Respectfully following the aforesaid decision of the Coordinate Bench in assessee’s own case, wherein the issue has been examined in detail after considering the relevant statutory provisions, judicial precedents and the factual matrix, we find no reason to deviate from the view already taken. Since the facts and circumstances in the year under consideration are identical, and no distinguishing feature has been brought to our notice by either side, the findings and directions contained in the said order are squarely applicable to the present assessment year. Accordingly, this issue is decided in terms of the directions contained therein, and the Assessing Officer is directed to give effect to the same.

50 I.T.A. No. 5803/Mum/2025 & I.T.A. No. 5804/Mum/2025 We have perused the submissions advanced by both sides in light of the records placed before this Tribunal. The issue relates to transfer pricing adjustments. It is noted that Coordinate Bench in A.Y. 2009–10 has adjudicated this issue on identical facts by observing as under:-

“76. We have heard the rival submissions and perused the relevant finding given in the impugned orders. One of the reasons given by the ld. TPO and the ld. DRP is that assessee has been earning to reconcile the value of transaction disclosed by the Indian AEs in the Form 3CEB if the value disclosed by the assessee in its return of income. The assessee had explained that the difference is for the reason that assessee accounts the amount on receipt basis whereas the Indian AE’s reports the transaction on accrual basis and this assessee has been doing in accordance with the provisions of the tax treaty. It is important to note here that, this position has also been upheld by the Hon’ble Bombay High court in assessee’s own case that it should be taxed on receipt basis. It was for this reason amounts recorded by the Indian AE cannot be the same. Apart from that, the assessee reports only those transactions that are subject to tax in India, i.e., element of Fees for Technical Services only, whereas Indian AEs report all the transactions like purchase / sale of goods, provision and availing of services, reimbursement / recovery of expenses whether income/expense. It is thus quite natural that there would be differences in the transactions reported by the assessee and the AE’s. Once this has been brought on records and assessee has given this explanation for reconciliation, then this cannot be the reason or ground for making adhoc adjustment @10% by taking 10% mark-up on the value of international transaction. Such an exercise is completely against the concept of transfer pricing revelation. The ld. TPO was bound to determine the ALP in accordance with the Rules after analyzing the nature of transaction and the arm’s length price after applying method provided under the Rules. If in the case of the Indian AE, the same transaction has been benchmarked and has been accepted to the ALP, then, unless there are different factors which need to be analyzed on the same transaction, it cannot be held that the same ALP cannot be accepted in the case of recipient foreign company. In fact it has been informed that ld. TPO has made adjustment under various heads which also includes payment of royalty. Any further adjustment is not called for in the case of the assessee to adopt a different ALP. Though the true course would have been that ALP of FTS and royalty should have been benchmarked separately as per the Rules, however, when assessee had carried out and furnished TP study report and also relied upon the margins declared by the Indian AEs after carrying out different study report, then without finding any defect in such TP analysis and determination of ALP by the assessee, ld. TPO could not have resorted to adhoc mechanism for adding 10% mark-up on adhoc basis. Thus, in absence of any contrary inference

51 I.T.A. No. 5803/Mum/2025 & I.T.A. No. 5804/Mum/2025 drawn by the ld. TPO on the TP study report of the assessee and at the same time in the case of Indian AE, same transaction has been benchmarked and ALP has been determined then we do not find any reason for taking adhoc 10% mark-up. Accordingly, the same is deleted. In the result, grounds No. 2 to 7 are allowed.” 9.1. Respectfully following the aforesaid decision of the Coordinate Bench in assessee’s own case, wherein the issue has been examined in detail after considering the relevant statutory provisions, judicial precedents and the factual matrix, we find no reason to deviate from the view already taken. Since the facts and circumstances in the year under consideration are identical, and no distinguishing feature has been brought to our notice by either side, the findings and directions contained in the said order are squarely applicable to the present assessment year. Accordingly, this issue is decided in terms of the directions contained therein, and the Assessing Officer is directed to give effect to the same.

We have perused the submissions advanced by both sides in light of the records placed before this Tribunal. This issue pertains to taxability of interest income from NTPC. It is noted that Coordinate Bench in A.Y. 2009–10 has adjudicated this issue on identical facts by observing as under:-

“55. In so far as taxability of principle of arbitration award, the same has not been disputed because the receipt is not chargeable to tax in absence of PE or said income being attributable to PE. Similarly, the interest of arbitration award from NTPC is also in the nature of claim made by the assessee on NTPC and was not the debt claim only the arbitration was awarded. Hence, we hold that interest on arbitration award do not represent income in the current year. This view is also supported by the decision of the Hon'ble Supreme Court in the case of CIT vs. Govinda Choudhury & Sons [1993] 203 ITR 881 (SC) where it was held that interest awarded as a result of an arbitration award following a dispute in relation to a work executed by the assessee was a revenue receipt and

52 I.T.A. No. 5803/Mum/2025 & I.T.A. No. 5804/Mum/2025 incidental to the business carried on by the assessee and thus assessable as a business income and not income from other sources. 56. Further, reference can be made on the decision of Hon'ble Bombay High Court in the case of Islamic Investment Co. v. Union of India |2004) 265 ITR 254 (Bom.) an extract of which is as under:- "However, as observed by the Supreme Court in All India Reporter Ltd. v. Ramchandra D. Datar AIR 1961 SC 943 when such amount becomes part of a judgment debt, it loses its original character and assumes the character of a judgment debt." 57. Accordingly, this issue is decided in favour of the assessee holding that interest of arbitration award is not subject to tax in absence of PE in India.” 10.1. Respectfully following the aforesaid decision of the Coordinate Bench in assessee’s own case, wherein the issue has been examined in detail after considering the relevant statutory provisions, judicial precedents and the factual matrix, we find no reason to deviate from the view already taken. Since the facts and circumstances in the year under consideration are identical, and no distinguishing feature has been brought to our notice by either side, the findings and directions contained in the said order are squarely applicable to the present assessment year. Accordingly, this issue is decided in terms of the directions contained therein, and the Assessing Officer is directed to give effect to the same.

This issue is consequential in nature. The Assessing Officer is directed to give effect in accordance with the findings rendered in the preceding issues.

53 I.T.A. No. 5803/Mum/2025 & I.T.A. No. 5804/Mum/2025 This issue is consequential in nature. The Assessing Officer is directed to recompute interest, if any, in accordance with law while giving effect to this order.

This ground is premature at this stage and does not call for adjudication. The same is accordingly dismissed as infructuous.

This ground is also premature and does not require adjudication at this stage. Accordingly, the same is dismissed.

We have perused the submissions advanced by both sides in light of the records placed before this Tribunal. The issue raised by the assessee is challenging validity of assessment order passed based on the decision of Hon’ble Bombay High Court in case of Shelf Drilling Ron Tappmeyer Ltd. vs. ACIT in WP no. 2340 of 2021.

15.1. It is further noted that by passing of the Finance Act 2026, this issue becomes infructuous by virtue of the amendment introduced by the legislature in section 153B. We therefore, do not find any merit in this ground raised by the assesse and the same is dismissed as infructuous.

Accordingly, Additional ground raised by the assessee stands dismissed as infructuous.

54 I.T.A. No. 5803/Mum/2025 & I.T.A. No. 5804/Mum/2025 the facts, issues, and findings of the authorities below remain identical.

In the result the appeal filed by the assessee for all the years under consideration stands partly allowed.

Order pronounced in the open court on 29/04/2026

Sd/- Sd/-

(PRABHASH SHANKAR) (BEENA PILLAI) Accountant Member Judicial Member Mumbai Dated: 29/04/2026 SC Sr. P.S.

Copy of the order forwarded to:

(1)The Appellant (2) The Respondent (3) The CIT (4) The CIT (Appeals) (5) The DR, I.T.A.T.