COMMISSIONER OF INCOME TAX (INTERNATIONAL TAXATION)-2 vs. M/S MITSUI AND CO.

PDF · subscribers
ITA/38/2023HC DelhiDLHC01000919202231 January 2023Bench: HON'BLE MR. JUSTICE RAJIV SHAKDHER,HON'BLE MS. JUSTICE TARA VITASTA GANJU3 pages
AI SummaryDismissed

What did the High Court hold?

The High Court noted that the appeal emerged from cross-objections by the respondent-assessee and that the sole issue before the Tribunal was whether the assessee had a Dependent Agency Permanent Establishment (DAPE) in India. The revenue, through its counsel, did not wish to press proposed questions A and E, which related to off-shore supplies and the basis of taxation (cash vs. mercantile). Consequently, only questions B, C, and D, concerning the existence of a PE and DAPE in India, were considered for adjudication. The revenue conceded that these remaining questions were covered by a coordinate bench's judgment in ITA 321/2018, titled The Commissioner of Income Tax-International Tax v. Mitsui & Company Ltd. Therefore, the High Court concluded that no substantial questions of law arose for its consideration and closed the appeal.

What were the facts?

This appeal by the Commissioner of Income Tax (International Taxation)-2 concerns Assessment Year 2009-2010 and challenges an order dated 04.01.2022 passed by the Income Tax Appellate Tribunal (Tribunal). The appeal arises from cross-objections raised by the respondent-assessee, M/s Mitsui and Co. The primary issue before the Tribunal was whether the assessee had a Dependent Agency Permanent Establishment (DAPE) in India. The revenue proposed several questions of law, but the High Court noted that only questions pertaining to the existence of a PE and DAPE in India were relevant to the present appeal.

What were the issues?

The Tribunal had to decide the following questions of law: 1. Whether the amount received by the assessee on account of off-shore supplies for Teesta and Purulia projects is taxable under Section 44BBB of the Income Tax Act, 1961. 2. Whether the Liaison Office of the assessee constituted a Permanent Establishment (PE) liable to tax in India, considering it was a fixed place and its activities were not preparatory or auxiliary. 3. Whether the Liaison Office of the assessee constituted a PE in India. 4. Whether the assessee's income from Teesta and Purulia Projects should be taxed on a cash basis instead of a mercantile basis. The revenue contended that the Liaison Office was a fixed place and its activities were not preparatory or auxiliary, thus constituting a PE. The revenue also argued that the Liaison Office constituted a Dependent Agency Permanent Establishment (DAPE). The assessee's arguments are not explicitly detailed in the provided text, but the appeal arises from their cross-objections.

Which sections of the Income-tax Act were involved?

Section 44BBB

AI-generated summary — verify with the full judgment below

$~5 * IN THE HIGH COURT OF DELHI AT NEW DELHI + ITA 38/2023 COMMISSIONER OF INCOME TAX (INTERNATIONAL TAXATION)-2

..... Appellant Through: Mr Sanjay Kumar, Sr. Standing Counsel.

versus

M/S MITSUI AND CO.

..... Respondent Through: Mr Ved Jain with Mr Nischay Kantoor, Advocates.

CORAM:

HON'BLE MR JUSTICE RAJIV SHAKDHER

HON'BLE MS JUSTICE TARA VITASTA GANJU

O R D E R %

31.01.2023 [Physical Hearing/Hybrid Hearing (as per request)] 1. This appeal concerns Assessment Year (AY) 2009-2010, and is directed against the order dated 04.01.2022 passed by the Income Tax Appellate Tribunal [in short “Tribunal”]. 2. The appellant/revenue has proposed the following questions of law.

“A. Whether on the facts and circumstance of the case and in law, the Ld. ITAT erred in holding that the amount received to assessee on account of off-shore supplies in respect of Teesta and Purulia projects are not taxable under the provisions of Section 44BBB of the Act? B. Whether on the facts and circumstance of the case and in law, the Ld. ITAT erred in holding that the Liaison Office of the assessee did not constitute a Permanent Establishment, liable to tax in India when the said office was clearly a fixed ITA 38/2023

page 1 of 3 This is a digitally signed order. The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 29/05/2026 at 15:53:54

place and the activities carried out could not be said to be preparatory or auxiliary in nature? C. Whether on the facts and circumstance of the case and in law, the Ld. ITAT erred in holding that Liaison Office of the assessee does not constitute a PE in India? D. Whether on the facts and circumstance of the case and in law, the Ld. ITAT has erred in holding that no income is liable to be attributed in India as Mitsui India Pvt. Ltd. (MIPL), the liaison office of the assessee, do not constitute a Dependent Agency Permanent Establishment (DAPE) of the assessee in India? E. Whether on the facts and circumstance of the case and in law, the Ld. ITAT erred in holding that the assessee's income from Teesta and Purulia Projects should be taxed on cash basis instead of Mercantile basis?”

3.

To be noted, this appeal emerges out of the cross objections raised on behalf of the respondent/assessee. There is no dispute, that the only issue which arose for consideration before the Tribunal concerned the following aspect i.e., whether or not the respondent/assessee had a Dependent Agency Permanent Establishment (DAPE) in India. Therefore, the questions of law, as noticed above, have been proposed in the appeal. 4. Clearly, only questions shown as B, C and D arise for consideration in the present appeal. 5. Mr Sanjay Kumar, learned senior standing counsel, who appears on behalf of the appellant/revenue, does not dispute this position. Therefore, Mr Kumar says that he does not wish to press the proposed questions, shown as A and E in the instant appeal. 6. Insofar as the remaining questions are concerned i.e., those shown as B, C and D, they are covered, even according to Mr Sanjay Kumar, by the ITA 38/2023

page 2 of 3 This is a digitally signed order. The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 29/05/2026 at 15:53:54

judgment of the coordinate bench dated 09.11.2022 passed in ITA 321/2018 titled The Commissioner of Income Tax-International Tax v. Mitsui & Company Ltd. 7. Accordingly, this appeal is closed, as no substantial questions of law arise for our consideration.

RAJIV SHAKDHER, J

TARA VITASTA GANJU, J

JANUARY 31, 2023 / tr

Click here to check corrigendum, if any

ITA 38/2023

page 3 of 3 This is a digitally signed order. The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 29/05/2026 at 15:53:54

More judgments on Section 44BBB

All 65 judgments and leading authorities on Section 44BBB →

Recent GST High Court judgments

Search GST case law →