BURO HAPPPOLD LIMITED ,MUMBAI vs. DEPUTY COMMISSIONER OF INCOME TAX, INTERNATIONAL TAXATION -1(3)(2) , MUMBAI

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ITA 4350/MUM/2023Status: DisposedITAT Mumbai20 January 2025AY 2021-22Bench: SHRI SANDEEP GOSAIN (Judicial Member), SHRI OMKARESHWAR CHIDARA ( (Accountant Member)18 pages
AI SummaryPartly Allowed

What did the Tribunal hold?

The Tribunal followed its own earlier decisions for the assessee's own case, allowing the taxability of consulting engineering services and management fees/cost recharge as FTS and Royalty. Consequently, the ground related to the rate of tax became infructuous, and the ground related to interest was considered consequential.

What were the facts?

The assessee received amounts for consulting engineering services and management fees/cost recharge. The tax authorities treated these as Fees for Technical Services (FTS) and Royalty, respectively. The assessee argued that these were covered by earlier ITAT decisions in its favor for previous assessment years.

What were the issues?

Whether amounts received for consulting engineering services and management fees/cost recharge are taxable as FTS and Royalty, and the consequential impact on interest levy.

Which sections of the Income-tax Act were involved?

Section 9(1)(vi),Section 9(1)(vii),Section 234B

AI-generated summary — verify with the full judgment below

Cases cited in this judgment(1)Show list

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Income Tax Appellate Tribunal, MUMBAI BENCH “I” MUMBAI

Before: SHRI SANDEEP GOSAIN & SHRI OMKARESHWAR CHIDARA

For Appellant: Shri Vijay Mehta/ Nishit Parikh
For Respondent: Shri S. G. Menon, Sr. DR
Hearing: 24/10/2024Pronounced: 20/01/2025

This appeal is filed by the above captioned appellant company against the order of Ld. CIT(DRP-1), Mumbai-1 (herein after in short ‘Ld. DRP’) dated 26/09/2023 ‘Ld. DRP’) dated 26/09/2023 for the assessment year 2022 the assessment year 2022-23 passed u/s. 144C(5) of I.T. Act 1961 (in short ‘the Act’) passed u/s. 144C(5) of I.T. Act 1961 (in short ‘the Act’) passed u/s. 144C(5) of I.T. Act 1961 (in short ‘the Act’).

2. The appellant company raised the following grounds in its The appellant company raised the following grounds in its The appellant company raised the following grounds in its appeal.

“1. Ground No. 1- - Taxability of amount received for Consulting Taxability of amount received for Consulting Engineering Services as Fees for Technical Services (FTS), Engineering Services as Fees for Technical Services (FTS), 1.1 On the facts and in the circumstances of the case and in law, the On the facts and in the circumstances of the case and in law, the On the facts and in the circumstances of the case and in law, the learned DRP (Dispute Resolution Panel') and DCIT have erred in learned DRP (Dispute Resolution Panel') and DCIT have erred in learned DRP (Dispute Resolution Panel') and DCIT have erred in considering income from consulting engineering services amounti considering income from consulting engineering services amounti considering income from consulting engineering services amounting to INR 43,26,520/- as Fees for Technical Services ('FTS') as per Section as Fees for Technical Services ('FTS') as per Section as Fees for Technical Services ('FTS') as per Section 9(1)(vii) of the Act and Article 13 of India 9(1)(vii) of the Act and Article 13 of India-UK Double Taxation Avoidance UK Double Taxation Avoidance Agreement ('DTAA).

2. Ground No. II - Taxability of amount received as management fees & Taxability of amount received as management fees & Taxability of amount received as management fees & cost recharge as both Royalty and Fees for technical services (FTS). both Royalty and Fees for technical services (FTS). both Royalty and Fees for technical services (FTS). 2.1 On the facts and in the circumstances of the case and in law, the On the facts and in the circumstances of the case and in law, the On the facts and in the circumstances of the case and in law, the learned DRP ('Dispute Resolution Panel') and DCIT have erred in learned DRP ('Dispute Resolution Panel') and DCIT have erred in learned DRP ('Dispute Resolution Panel') and DCIT have erred in considering management fees & common cost recharge amounting to considering management fees & common cost recharge amounting to considering management fees & common cost recharge amounting to INR 6,31,27,797/- as both Royalty and Fees for Technical Services as both Royalty and Fees for Technical Services as both Royalty and Fees for Technical Services ('FTS') as per Section 9(1)(vi) and 9(1)(vii) of the Act and Article 13 of ('FTS') as per Section 9(1)(vi) and 9(1)(vii) of the Act and Article 13 of ('FTS') as per Section 9(1)(vi) and 9(1)(vii) of the Act and Article 13 of India-UK Double Taxation Avoidance Agreement ('DTAA'). UK Double Taxation Avoidance Agreement ('DTAA').

3. Ground No. III - Erroneous rate of tax applied while computing Erroneous rate of tax applied while computing Erroneous rate of tax applied while computing tax payable. 3.1 Without prejudice to the above grounds, on the facts and in the Without prejudice to the above grounds, on the facts and in the Without prejudice to the above grounds, on the facts and in the circumstances of the case and in law, the learned DCIT has erroneously circumstances of the case and in law, the learned DCIT has erroneously circumstances of the case and in law, the learned DCIT has erroneously applied a tax rate of 15% as per India applied a tax rate of 15% as per India-UK DTAA instead of applying a UK DTAA instead of applying a beneficial rate of 10.608% under beneficial rate of 10.608% under the Act while computing the amount of the Act while computing the amount of tax payable by the Appellant. tax payable by the Appellant.

4. Ground No. IV - Erroneous levy of consequential interest under section Erroneous levy of consequential interest under section Erroneous levy of consequential interest under section 234A and 234B of the Act. 234A and 234B of the Act. 4.1 On the facts and in the circumstances of the case and in law, the On the facts and in the circumstances of the case and in law, the On the facts and in the circumstances of the case and in law, the learned DCIT has erred in levying consequential interest under section erred in levying consequential interest under section erred in levying consequential interest under section 234A and 234B of the Act, amounting to Rs. 14,30,428/ 234A and 234B of the Act, amounting to Rs. 14,30,428/- The appellant craves leave to add, alter, amend, modify or amplify any The appellant craves leave to add, alter, amend, modify or amplify any The appellant craves leave to add, alter, amend, modify or amplify any of the above stated Grounds of Appeal. of the above stated Grounds of Appeal.”

3. At the outset, the Ld. AR of appella At the outset, the Ld. AR of appellant Company brought to the nt Company brought to the notice of Bench that all the above mentioned issues were covered in notice of Bench that all the above mentioned issues were covered in notice of Bench that all the above mentioned issues were covered in their favour by the orders of Hon’ble ITAT in earlier years from A.Y. their favour by the orders of Hon’ble ITAT in earlier years from A.Y. their favour by the orders of Hon’ble ITAT in earlier years from A.Y. 2012-13 onwards till A.Y. 2020 13 onwards till A.Y. 2020-21. The lead order was pronouced 21. The lead order was pronouced by the Hon’ble Bench in A.Y. by the Hon’ble Bench in A.Y. 2012-13 and the same was followed in 13 and the same was followed in all subsequent years as there is no change in all subsequent years as there is no change in all subsequent years as there is no change in facts and circumstances. Hence, it was submitted that the earlier decisions of circumstances. Hence, it was submitted that the earlier decisions of circumstances. Hence, it was submitted that the earlier decisions of Hon’ble ITAT Mumbai may be followed in the current year also. Hon’ble ITAT Mumbai may be followed in the current year also. Hon’ble ITAT Mumbai may be followed in the current year also.

4. Ld. DR relied on the orders of Ld. DR relied on the orders of lower authorities and it was lower authorities and it was submitted that issues are pending before Hon’ble Bombay H.C. for submitted that issues are pending before Hon’ble Bombay H.C. for submitted that issues are pending before Hon’ble Bombay H.C. for adjudication as the Revenue is in appeal is all these years from A.Y. adjudication as the Revenue is in appeal is all these years from A.Y. adjudication as the Revenue is in appeal is all these years from A.Y. 2012-13 onwards.

5. After considering the rival submissions, After considering the rival submissions, it is observed from the t is observed from the paper book filed by Ld. AR of appellant company, the above issues filed by Ld. AR of appellant company, the above issues filed by Ld. AR of appellant company, the above issues mentioned in the Grounds of Appeal are covered in favour of mentioned in the Grounds of Appeal are covered in favour of mentioned in the Grounds of Appeal are covered in favour of assessee in its own case for the A.Y. 2012 assessee in its own case for the A.Y. 2012-13 where detailed 13 where detailed reasoning was given and the relevant portion of ITAT order is reasoning was given and the relevant portion of ITAT order is reasoning was given and the relevant portion of ITAT order is reproduced as under : er :

“14. We have considered rival submissions and perused material on record. We We have considered rival submissions and perused material on record. We We have considered rival submissions and perused material on record. We have also applied our mind to the decisions relied upon by both the parties. The have also applied our mind to the decisions relied upon by both the parties. The have also applied our mind to the decisions relied upon by both the parties. The core issue which needs to be addressed is, whether the amount received by the core issue which needs to be addressed is, whether the amount received by the core issue which needs to be addressed is, whether the amount received by the assessee towards supply of technical designs, drawings, plans, etc., under the ds supply of technical designs, drawings, plans, etc., under the ds supply of technical designs, drawings, plans, etc., under the consulting engineering services is to be treated as fees for technical services consulting engineering services is to be treated as fees for technical services consulting engineering services is to be treated as fees for technical services under the India-UK tax treaty. Once this issue is decided, the issue whether cost UK tax treaty. Once this issue is decided, the issue whether cost UK tax treaty. Once this issue is decided, the issue whether cost recharge is in the nature of fees for technical services will automatically get recharge is in the nature of fees for technical services will automatically get resolved since both the Assessing Officer and learned Commissioner (Appeals) resolved since both the Assessing Officer and learned Commissioner (Appeals) resolved since both the Assessing Officer and learned Commissioner (Appeals) have treated it as fees for technical services on the reasoning that such cost have treated it as fees for technical services on the reasoning that such cost recharge is ancillary and incidental to consulting engineering services. recharge is ancillary and incidental to consultin g engineering services.

15.

There is no dispute between the parties that the assessee being a tax There is no dispute between the parties that the assessee being a tax There is no dispute between the parties that the assessee being a tax resident of UK is governed under India-UK tax treaty and If the treaty provisions resident of UK is governed under India UK tax treaty and If the treaty provisions are more beneficial, they will apply to the assessee in terms with section are more beneficial, they will apply to the assessee in terms with section are more beneficial, they will apply to the assessee in terms with section 90(2) of the Act. From the assessment stage itself, the assessee has pleaded that since the Act. From the assessment stage itself, the assessee has pleaded that since the Act. From the assessment stage itself, the assessee has pleaded that since the supply of technical design/ drawings/plans by it to the Indian entity does the supply of technical design/ drawings/plans by it to the Indian entity does the supply of technical design/ drawings/plans by it to the Indian entity does not make available any technical knowledge, knowhow, process, etc., it cannot not make available any technical knowledge, knowhow, process, etc., it cannot not make available any technical knowledge, knowhow, process, etc., it cannot be treated as fees for technical services under Article as fees for technical services under Article-13(4)(c) India 13(4)(c) India-UK tax treaty. Whereas, the Assessing Officer has rebutted such contention of the treaty. Whereas, the Assessing Officer has rebutted such contention of the treaty. Whereas, the Assessing Officer has rebutted such contention of the assessee on the reasoning that as per the second limb of Article assessee on the reasoning that as per the second limb of Article assessee on the reasoning that as per the second limb of Article-13(4)(c) of the India-UK tax treaty, amount recei UK tax treaty, amount received towards development and transfer of a ved towards development and transfer of a technical plan or technical design, by itself, is in the nature of fees for technical technical plan or technical design, by itself, is in the nature of fees for technical technical plan or technical design, by itself, is in the nature of fees for technical services and there is no necessity of fulfilling the condition of "make available". services and there is no necessity of fulfilling the condition of "make available". services and there is no necessity of fulfilling the condition of "make available". The learned Commissioner (Appeals) while agreeing with the aforesaid The learned Commissioner (Appeals) while agr eeing with the aforesaid reasoning of the Assessing Officer has further supplemented it by observing that reasoning of the Assessing Officer has further supplemented it by observing that reasoning of the Assessing Officer has further supplemented it by observing that through the provision of technical drawing and design and consultancy services through the provision of technical drawing and design and consultancy services through the provision of technical drawing and design and consultancy services provided through personnel at the site, the assessee has made available provided through personnel at the site, the assessee has made available provided through personnel at the site, the assessee has made available technical knowledge, experience, skill, knowhow or processes to the Indian technical knowledge, experience, skill, knowhow or processes to the Indian technical knowledge, experience, skill, knowhow or processes to the Indian entity, hence, the amount received is in the nature of fees for technical services. entity, hence, the amount received is in the nature of fees for technical services. entity, hence, the amount received is in the nature of fees for technical services.

16.

For a better understanding of the dispute, it is necessary to look into the For a better understanding of the dispute, it is necessary to look into the For a better understanding of the dispute, it is necessary to look into the scope of work to be undertaken by the assessee under the relevant agreements. to be undertaken by the assessee under the relevant agreements. to be undertaken by the assessee under the relevant agreements. On a perusal of the sample copies of the agreements, it is noticed that the On a perusal of the sample copies of the agreements, it is noticed that the On a perusal of the sample copies of the agreements, it is noticed that the assessee was entrusted the work of providing consulting services for a twin city assessee was entrusted the work of providing consulting services for a twin city assessee was entrusted the work of providing consulting services for a twin city project by the Pune Municipality as well as other building projects in Mumbai. project by the Pune Municipality as well as other building projects in Mumbai. Further, on perusal of the sample copies of the agreement filed in the paper Further, on perusal of the sample copies of the agreement filed in the paper Further, on perusal of the sample copies of the agreement filed in the paper book, it is seen that the work of the assessee is basically to provide consultancy book, it is seen that the work of the assessee is basically to provide consultancy book, it is seen that the work of the assessee is basically to provide consultancy services relating to the projects and in that context to provide technical services relating to the projects and in that contex t to provide technical designs/drawings/plans. designs/drawings/plans. designs/drawings/plans. It It It is is is a a a fact fact fact on on on record record record that that that technical technical technical designs/drawings/plans supplied by the assessee under contract are project designs/drawings/plans supplied by the assessee under contract are project designs/drawings/plans supplied by the assessee under contract are project specific.

17.

Keeping in view the aforesaid factual position, we need to examine the Keeping in view the aforesaid factual position, we need to examine the Keeping in view the aforesaid factual position, we need to examine the taxability of the amount received by the assessee under the India taxability of the amount received by the assessee under the India taxability of the amount received by the assessee under the India-UK tax treaty. As per Article-13 of the India 13 of the India-UK tax treaty, royalty and fees for technical UK tax treaty, royalty and fees for technical services arising in a contracting State and paid to a resident of other contracting services arising in a contracting State and paid to a resident of other contracting services arising in a contracting State and paid to a resident of other contracting State may be taxed in that other State. However, such royalty and fees for axed in that other State. However, such royalty and fees for axed in that other State. However, such royalty and fees for technical services can also be taxed in the contracting State in which they arise technical services can also be taxed in the contracting State in which they arise technical services can also be taxed in the contracting State in which they arise subject to certain restrictions and conditions as enumerated in Article subject to certain restrictions and conditions as enumerated in Article subject to certain restrictions and conditions as enumerated in Article-13(2) of the India-UK tax treaty. Since, UK tax treaty. Since, in the present appeal in the present appeal the departmental authorities have treated the amount received by the assessee as fees for authorities have treated the amount received by the assessee as fees for authorities have treated the amount received by the assessee as fees for technical services, we have to look to the meaning of fees for technical services technical services, we have to look to the meaning of fees for technical services technical services, we have to look to the meaning of fees for technical services under India-UK tax treaty. Article13(4) of the India UK tax treaty. Article13(4) of the India-U.K. tax U.K. tax treaty defines fees for technical services as under:- for technical services as under: "4. For the purposes of paragraph 2 of this Article, and subject to "4. For the purposes of paragraph 2 of this Article, and subject to "4. For the purposes of paragraph 2 of this Article, and subject to paragraph 5, of this Article, the term "fees for technical services" means paragraph 5, of this Article, the term "fees for technical services" means paragraph 5, of this Article, the term "fees for technical services" means payments of any kind of any person in consideration for the payments of any kind of any person in consideration for the payments of any kind of any person in consideration for the rendering of any technical or consultancy services (including the provision of services of any technical or consultancy services (including the provision of services of any technical or consultancy services (including the provision of services of a technical or other personnel) which: a technical or other personnel) which:

(a) are ancillary and subsidiary to the application or enjoyment of the right, (a) are ancillary and subsidiary to the application or enjoyment of the right, (a) are ancillary and subsidiary to the application or enjoyment of the right, property or information for which a payment d property or information for which a payment described in paragraph 3(a) of escribed in paragraph 3(a) of this article is received or this article is received or (b) are ancillary and subsidiary to the enjoyment of the property for which (b) are ancillary and subsidiary to the enjoyment of the property for which (b) are ancillary and subsidiary to the enjoyment of the property for which a payment described in paragraph 3(b) of this Article is received; or a payment described in paragraph 3(b) of this Article is received; or a payment described in paragraph 3(b) of this Article is received; or (c) make available technical knowledge, experience (c) make available technical knowledge, experience, skill know , skill know-how or processes, or consist of the development and transfer of a technical plan or processes, or consist of the development and transfer of a technical plan or processes, or consist of the development and transfer of a technical plan or technical design." technical design."

18.

Since, the conditions of Article Since, the conditions of Article-13(5) of the India-UK tax treaty are not UK tax treaty are not applicable in the present case, it is not relevant for our purpose. Undisputedly, applicable in the present case, it is not relevant for our p urpose. Undisputedly, both the departmental authorities and the assessee are in agreement that if, at both the departmental authorities and the assessee are in agreement that if, at both the departmental authorities and the assessee are in agreement that if, at all, the amount received by the assessee is treated as fees for technical services, all, the amount received by the assessee is treated as fees for technical services, all, the amount received by the assessee is treated as fees for technical services, it will come within Article-13(4)(c) of the India-UK tax treaty. There it will come within Article UK tax treaty. Therefore, the following two issues arise for our consideration viz., following two issues arise for our consideration viz., (i) Whether development and transfer of a technical plan or technical Whether development and transfer of a technical plan or technical Whether development and transfer of a technical plan or technical design design design simplicitor simplicitor simplicitor without without without making making making available available available technical technical technical knowledge, knowledge, knowledge, experience, skill, knowhow or processes, etc., would be experience, skill, knowhow or processes, etc., would be experience, skill, knowhow or processes, etc., would be in the nature of fees for technical services; and fees for technical services; and (ii) In the event, it is held that development and transfer of a technical In the event, it is held that development and transfer of a technical In the event, it is held that development and transfer of a technical plan or a technical design also requires making available technical plan or a technical design also requires making available technical plan or a technical design also requires making available technical knowledge, experience, skill, knowhow or processes, etc., wh knowledge, experience, skill, knowhow or processes, etc., wh knowledge, experience, skill, knowhow or processes, etc., whether in the present case such condition is satisfied." present case such condition is satisfied."

19.

Undisputedly, in the present case, the amount received by the assessee, Undisputedly, in the present case, the amount received by the assessee, Undisputedly, in the present case, the amount received by the assessee, which has been treated as fees for technical services is towards supply of which has been treated as fees for technical services is towards supply of which has been treated as fees for technical services is towards supply of technical drawings/designs/plans. On a careful reading of Article technical drawings/designs/plans. On a careful reading of Article-13(4)(c) of the India-UK tax treaty it becomes clear that the words "or consists of the UK tax treaty it becomes clear that the words "or consists of the UK tax treaty it becomes clear that the words "or consists of the development and transfer of a technical plan or technical design", appearing in development and transfer of a technical plan or technical design", appearing in development and transfer of a technical plan or technical design", appearing in the second limb has to be read in conjunction with "make available te the second limb has to be read in conjunction with "make available te the second limb has to be read in conjunction with "make available technical knowledge, experience, skill, knowhow or processes". The reasoning of the knowledge, experience, skill, knowhow or processes". The reasoning of the knowledge, experience, skill, knowhow or processes". The reasoning of the Assessing Officer that the second limb of Article-13(4)(c) of the India Assessing Officer that the second limb of Article 13(4)(c) of the India-UK tax treaty has to be read independently, in our view, cannot be the correct treaty has to be read independently, in our view, cannot be the correct treaty has to be read independently, in our view, cannot be the correct interpretation of the said Article. As per the rule of ejusdem generis, the words interpretation of the s aid Article. As per the rule of ejusdem generis, the words "or consists of the development and transfer of a technical plan or technical "or consists of the development and transfer of a technical plan or technical "or consists of the development and transfer of a technical plan or technical design" will take colour from "make available technical knowledge, experience, design" will take colour from "make available technical knowledge, experience, design" will take colour from "make available technical knowledge, experience, skill, knowhow or processes". skill, knowhow or processes".

20.

Having held so, now it is necessary to examine whether by supply of ng held so, now it is necessary to examine whether by supply of ng held so, now it is necessary to examine whether by supply of technical, designs, drawing, plans, the assessee has made available technical technical, designs, drawing, plans, the assessee has made available technical technical, designs, drawing, plans, the assessee has made available technical knowledge, experience, skill, knowhow or processes. As per the settled principle knowledge, experience, skill, knowhow or processes. As per the settled principle knowledge, experience, skill, knowhow or processes. As per the settled principle of law, technology is considered to have been made available when the recipient of law, technology is considered to have been made available when the recipient of such technology is competent and authorised to apply the technology of such technology is competent and authorised to apply the technology of such technology is competent and authorised to apply the technology contained therein independently as an owner without depending upon the contained therein independently as an owner without depending upon the contained therein independently as an owner without depending upon the service provider. The recipient of technology should be able to mak service provider. The recipient of technology should be able to mak service provider. The recipient of technology should be able to make use of technical knowledge, experience, skill, knowhow or processes by himself in his technical knowledge, experience, skill, knowhow or processes by himself in his technical knowledge, experience, skill, knowhow or processes by himself in his business or for his own benefit and without recourse to the service provider in business or for his own benefit and without recourse to the service provider in business or for his own benefit and without recourse to the service provider in future and for this purpose a transmission of the technical knowledge, future and for this purpose a transmission of the technical knowledge, future and for this purpose a transmission of the technical knowledge, experience, skill, knowhow or processes, from the service provider to the service , knowhow or processes, from the service provider to the service , knowhow or processes, from the service provider to the service recipient is necessary. In other words, the technical knowledge, experience, skill, recipient is necessary. In other words, the technical knowledge, experience, skill, recipient is necessary. In other words, the technical knowledge, experience, skill, knowhow or processes, must remain with the service recipient even after knowhow or processes, must remain with the service recipient even after knowhow or processes, must remain with the service recipient even after rendering of the services has come to an end. The service recipient must be at rendering of the services has come to an end. The service recipient must be at liberty to use the technical knowledge, experience, skill, knowhow or processes liberty to use the technical knowledge, experience, skill, knowhow or processes liberty to use the technical knowledge, experience, skill, knowhow or processes in his own right. Undisputedly, in the present case, as revealed from the in his own right. Undisputedly, in the present case, as revealed from the in his own right. Undisputedly, in the present case, as revealed from the material on record, the technical design/drawings/plans su material on record, the technical design/drawings/plans su material on record, the technical design/drawings/plans supplied by the assessee to the Indian entity are project specific, hence, cannot be used by the assessee to the Indian entity are project specific, hence, cannot be used by the assessee to the Indian entity are project specific, hence, cannot be used by the Indian entity in any other project in future. Therefore, the claim of the assessee Indian entity in any other project in future. Therefore, the claim of the assessee Indian entity in any other project in future. Therefore, the claim of the assessee that it has not made available any technical knowledge, experience, skill, that it has not made available any technical knowledge, experience, skill, that it has not made available any technical knowledge, experience, skill, knowhow or processes while developing and supplying the technical whow or processes while developing and supplying the technical whow or processes while developing and supplying the technical drawings/designs/plans has to be accepted. If the Department is of the view drawings/designs/plans has to be accepted. If the Department is of the view drawings/designs/plans has to be accepted. If the Department is of the view that through development and supply of technical designs/drawings/plans the development and supply of technical designs/drawings/plans the development and supply of technical designs/drawings/plans the assessee has made available technical knowledge, experience, skill, knowhow assessee has made available technical kno wledge, experience, skill, knowhow or processes, it is for the Department to establish such fact through proper or processes, it is for the Department to establish such fact through proper or processes, it is for the Department to establish such fact through proper evidence. The assessee certainly cannot be asked to prove the negative. It is evidence. The assessee certainly cannot be asked to prove the negative. It is evidence. The assessee certainly cannot be asked to prove the negative. It is worth mentioning, while deciding a dispute of identical nature con worth mentioning, while deciding a dispute of identical nature con worth mentioning, while deciding a dispute of identical nature concerning fees for technical services as per India- USA tax treaty under which definition of fess for technical services as per India USA tax treaty under which definition of fess for included services as per Article-12(4)(b) is identically worded like Article for included services as per Article 12(4)(b) is identically worded like Article 13(4)(c) of the India-UK tax treaty, the Tribunal, Pune Bench, in Gera 13(4)(c) of the India UK tax treaty, the Tribunal, Pune Bench, in Gera Developments Pvt. Ltd. v/s DCIT, [2016] 160 ITD 439 (Pune), has held that mere ents Pvt. Ltd. v/s DCIT, [2016] 160 ITD 439 (Pune), has held that mere ents Pvt. Ltd. v/s DCIT, [2016] 160 ITD 439 (Pune), has held that mere passing off project specific architectural, drawings and designs with passing off project specific architectural, drawings and designs with passing off project specific architectural, drawings and designs with measurements does not amount to making available technical knowledge, measurements does not amount to making available technical knowledge, measurements does not amount to making available technical knowledge, experience, skill, knowhow or processes. The Tribunal held that unless there is experience, skill, knowhow or processes. The Tribunal held that unless there is transfer of technical expertise skill or knowledge along with drawings and transfer of technical expertise skill or knowledge along with drawings and transfer of technical expertise skill or knowledge along with drawings and designs and if the assessee cannot independently use the drawings and designs and if the assessee cannot independently use the drawings and designs and if the assessee cannot independently use the drawings and designs in any manner whatsoever for commercial purpose, the payment designs in any manner whatsoever for commercial purpose, the payment designs in any manner whatsoever for commercial purpose, the payment received cannot be treated as fees for technical services. Though, we have taken d cannot be treated as fees for technical services. Though, we have taken d cannot be treated as fees for technical services. Though, we have taken note of other decisions cited by the learned Authorised Representative we do not note of other decisions cited by the learned Authorised Representative we do not note of other decisions cited by the learned Authorised Representative we do not intend to deliberate further on them. As regards the decisions cited by the intend to deliberate further on them. As regards the decisions cited by the intend to deliberate further on them. As regards the decisions cited by the learned Departmental Representative, we find them to factually distinguishable, learned Departmental Repr esentative, we find them to factually distinguishable, hence, not applicable to the present appeal. In any case of the matter, the hence, not applicable to the present appeal. In any case of the matter, the hence, not applicable to the present appeal. In any case of the matter, the Department has failed to establish on record that through development and Department has failed to establish on record that through development and Department has failed to establish on record that through development and supply of technical designs / drawings / plans the assessee has made supply of technical designs / drawings / plans the assessee has made available technical knowledge, experience, skill, knowhow or processes to the available technical knowledge, experience, skill, knowhow or processes to the available technical knowledge, experience, skill, knowhow or processes to the service recipient so as to bring the amount received within the meaning of fees service recipient so as to bring the amount received within the meaning of fees service recipient so as to bring the amount received within the meaning of fees for technical services under Article 13(4)(c) of the India-UK Tax Treaty. Theref for technical services under Article 13(4)(c) of the India UK Tax Treaty. Therefore, in our considered opinion, the amount received by the assessee has to be in our considered opinion, the amount received by the assessee has to be in our considered opinion, the amount received by the assessee has to be treated as business profit and in the absence of a PE in India, it cannot be treated as business profit and in the absence of a PE in India, it cannot be treated as business profit and in the absence of a PE in India, it cannot be brought to tax in India. brought to tax in India.

21.

Since, we have held the amount received towards consulting engineering Since, we have held the amount received towards consulting engineering Since, we have held the amount received towards consulting engineering services to be not in the nature of fees for technical services, the reasoning of the services to be not in the nature of fees for technical services, the reasoning of the services to be not in the nature of fees for technical services, the reasoning of the departmental authorities with regard to cost recharge would also fail, since, they departmental authorities with regard to cost recharge would also fail, since, they departmental authorities with regard to cost recharge would also fail, since, they have treated it as ancillary and incidental to consulting engineering services. have treated it as ancillary and incidental to consulting engineering services. have treated it as ancillary and incidental to consulting engineering services. The, contention of the learned Departmental Representative that the cost ontention of the learned Departmental Representative that the cost ontention of the learned Departmental Representative that the cost recharge fails various tests, such as, need test, benefit test etc. is unacceptable, recharge fails various tests, such as, need test, benefit test etc. is unacceptable, recharge fails various tests, such as, need test, benefit test etc. is unacceptable, it is contrary to the finding of the Departmental Authorities. Once, the it is contrary to the finding of the Departmental Authorities. Once, the it is contrary to the finding of the Departmental Authorities. Once, the Departmental Authorities have treated the amount received towards cost Departmental Authorities have t reated the amount received towards cost recharge to be in the nature fees for technical services, it implies rendering of recharge to be in the nature fees for technical services, it implies rendering of service by the assessee. Therefore, applying the very same reason on the basis service by the assessee. Therefore, applying the very same reason on the basis service by the assessee. Therefore, applying the very same reason on the basis of which we have held the amount received towards consu of which we have held the amount received towards consu of which we have held the amount received towards consulting engineering services to be not in the nature of fees for technical services as discussed above, services to be not in the nature of fees for technical services as discussed above, services to be not in the nature of fees for technical services as discussed above, we hold that the amount received towards cost recharge cannot be brought to we hold that the amount received towards cost recharge cannot be brought to we hold that the amount received towards cost recharge cannot be brought to tax in India in the absence of PE. Therefore, the additions made by the tax in India in the absence of PE. Therefore, the additions made by the tax in India in the absence of PE. Therefore, the additions made by the Assessing Officer are hereby deleted. The assessee succeeds in both the ing Officer are hereby deleted. The assessee succeeds in both the ing Officer are hereby deleted. The assessee succeeds in both the grounds.

22.

In the result, assessee's appeal is allowed."” In the result, assessee's appeal is allowed."” 6. Further, it is observed that in the appellant company’s own Further, it is observed that in the appellant company’s own Further, it is observed that in the appellant company’s own case, case, case, in in in ITA ITA ITA No. No. No. 1006/Mum/2023, 1006/Mum/2023, 1006/Mum/2023, A.Y. A.Y. A.Y. 2020 2020 2020-21, dated 13/07/2023, under similar facts and circumstances, took the 13/07/2023, under similar facts and circumstances, took the 13/07/2023, under similar facts and circumstances, took the decision, following the decision of co decision, following the decision of co-ordinate Bench for A.Y. 2012 ordinate Bench for A.Y. 2012- 13 observed as under : nder :

“2. The assessee has raised the following grounds of appeal before us: 2. The assessee has raised the following grounds of appeal before us: 2. The assessee has raised the following grounds of appeal before us:-

Ground No. I- Taxability of amount received for Consulting and Engineering Taxability of amount received for Consulting and Engineering services as Fees for technical services (FTS) services as Fees for technical services (FTS)

1.1. On the facts and in the circumstances of the ca On the facts and in the circumstances of the ca On the facts and in the circumstances of the case and in law the learned DRP (Dispute Resolution Panel) and DCIT have erred in considering learned DRP (Dispute Resolution Panel) and DCIT have erred in considering learned DRP (Dispute Resolution Panel) and DCIT have erred in considering income from consulting and engineering services amounting to INR 15 18 income from consulting and engineering services amounting to INR 15 18 income from consulting and engineering services amounting to INR 15 18 250/- as Fees for technical services (FTS) as per Article 13 of India as Fees for technical services (FTS) as per Article 13 of India as Fees for technical services (FTS) as per Article 13 of India-UK Double Taxation Avoi Double Taxation Avoidance Agreement (DTAA)

2.

Ground No. II Ground No. II- Taxability of amount received as management fees & Taxability of amount received as management fees & common cost recharge as Royalty and Fees for technical services (FTS) common cost recharge as Royalty and Fees for technical services (FTS) common cost recharge as Royalty and Fees for technical services (FTS)

2.1 On the facts and in the circumstances of the case and in law, the On the facts and in the circumstances of the case and in law, the On the facts and in the circumstances of the case and in law, the learned DRP (Dispute R learned DRP (Dispute Resolution Panel) and DCIT have erred in considering esolution Panel) and DCIT have erred in considering management fees & common cost management fees & common cost recharge amounting to INR 5,67 recharge amounting to INR 5,67 33.937/-as Royalty and Fees for technical services (FTS) as per Article 13 as Royalty and Fees for technical services (FTS) as per Article 13 as Royalty and Fees for technical services (FTS) as per Article 13 of India-UK Double Taxation Avoidance Agreement (DTAA) UK Double Taxation Avoidance Agreement (DTAA) UK Double Taxation Avoidance Agreement (DTAA)

3. Ground No Ground No. III-Erroneous rate of tax applied while computing tax Erroneous rate of tax applied while computing tax payable

3.1. Without prejudice to the above grounds on facts and circumstances Without prejudice to the above grounds on facts and circumstances Without prejudice to the above grounds on facts and circumstances of the case and in law, the learned DCIT has erroneously applied a tax of the case and in law, the learned DCIT has erroneously applied a tax of the case and in law, the learned DCIT has erroneously applied a tax rate of 15% as per India rate of 15% as per India-UK DTAA Instead of applying a beneficial rate of ing a beneficial rate of 10 92% under the Act while computing the amount of tax payable by the 10 92% under the Act while computing the amount of tax payable by the 10 92% under the Act while computing the amount of tax payable by the Appellant.

4. Ground No. IV Ground No. IV-Erroneous levy of consequential interest under Erroneous levy of consequential interest under section 2348.

4.1. On facts and circumstances of the case and in law, the learned DCI 4.1. On facts and circumstances of the case and in law, the learned DCI 4.1. On facts and circumstances of the case and in law, the learned DCIT has erred in levying consequential interest under Section 234B of the Act has erred in levying consequential interest under Section 234B of the Act has erred in levying consequential interest under Section 234B of the Act amounting to INR 32,32,988/ amounting to INR 32,32,988/-

The appellant craves leave to add alter amend modify or amplify any of the The appellant craves leave to add alter amend modify or amplify any of the The appellant craves leave to add alter amend modify or amplify any of the above stated Grounds of Appeal above stated Grounds of Appeal

3.

We have heard the rival submissions and p We have heard the rival submissions and perused the materials available erused the materials available on record. The assessee is a company registered in the United Kingdom and is a on record. The assessee is a company registered in the United Kingdom and is a on record. The assessee is a company registered in the United Kingdom and is a tax resident of that State. The assessee is an international, integrated tax resident of that State. The assessee is an international, integrated tax resident of that State. The assessee is an international, integrated engineering and consultancy company. The assessee is engaged in the busin engineering and consultancy company. The assessee is engaged in the busin engineering and consultancy company. The assessee is engaged in the business of providing structural and MEP (Mechanical, Electrical and Public Healthy) of providing structural and MEP (Mechanical, Electrical and Public Healthy) of providing structural and MEP (Mechanical, Electrical and Public Healthy) Engineering and consultation services for various buildings & projects in India. Engineering and consultation services for various buildings & projects in India. Engineering and consultation services for various buildings & projects in India. During the year under consideration, the assessee has received amounts from During the year under consideration, the assessee has received amounts from During the year under consideration, the assessee has received amounts from India from the following streams: owing streams:-

a) Consulting Engineering Services - Rs 15,18,250/- a) Consulting Engineering Services This amount is received from Buro Happold Engineers India Pvt Ltd (Buro India). This amount is received from Buro Happold Engineers India Pvt Ltd (Buro India). This amount is received from Buro Happold Engineers India Pvt Ltd (Buro India). The assessee provides structural and MEP engineering and consultancy services The assessee provides structural and MEP engineering and consultancy services The assessee provides structural and MEP engineering and consultancy services for various buildings and projects in India to Buro India and other clients. Buro for various buildings and proj ects in India to Buro India and other clients. Buro India enters into agreements with various Indian clients for design and India enters into agreements with various Indian clients for design and India enters into agreements with various Indian clients for design and consultancy services in relation to various projects. Typically, Buro India renders consultancy services in relation to various projects. Typically, Buro India renders consultancy services in relation to various projects. Typically, Buro India renders designing and engineering services to its client. However, wherever it does not designing and engineering services to its client . However, wherever it does not have the requisite expertise or requires highly specialized services like master have the requisite expertise or requires highly specialized services like master have the requisite expertise or requires highly specialized services like master planning, Acoustics Engineering, Environmental Engineering etc, then the said planning, Acoustics Engineering, Environmental Engineering etc, then the said planning, Acoustics Engineering, Environmental Engineering etc, then the said services are availed from the assessee company. Since these are s services are availed from the assessee company. Since these are s services are availed from the assessee company. Since these are specialized services and Buro India is not in a position to provide these services services and Buro India is not in a position to provide these services services and Buro India is not in a position to provide these services independently, hence on a year on year basis, they avail services from the independently, hence on a year on year basis, they avail services from the assessee to different projects/buildings. Typically, for each of the project of Buro assessee to different projects/buildings. Typically, for each of the project of Buro assessee to different projects/buildings. Typically, for each of the project of Buro India, It enters into a specific agreement with assessee, based on the services rs into a specific agreement with assessee, based on the services rs into a specific agreement with assessee, based on the services required. It was submitted that services provided by assessee to Buro India required. It was submitted that services provided by assessee to Buro India required. It was submitted that services provided by assessee to Buro India does not make available any technical knowledge or skill etc and accordingly does not make available any technical knowledge or skill etc and accordingly does not make available any technical knowledge or skill etc and accordingly the services would not qualify as fees for technical services under the India the services would not qualify as fee s for technical services under the India-UK Tax Treaty (DTAA In short) and the same should be characterized as Business Tax Treaty (DTAA In short) and the same should be characterized as Business Tax Treaty (DTAA In short) and the same should be characterized as Business Income falling under Article 7 of the DTAA. Such business income shall not be Income falling under Article 7 of the DTAA. Such business income shall not be Income falling under Article 7 of the DTAA. Such business income shall not be taxable in India in the absence of Permanent Establishment taxable in India in the absence of Permanent Establishment taxable in India in the absence of Permanent Establishment (PE) of the assessee in India. The assessee also submitted that similar issue was decided in in India. The assessee also submitted that similar issue was decided in in India. The assessee also submitted that similar issue was decided in assessee's favour for the AY 2012-13 by this tribunal. assessee's favour for the AY 2012

The Id. AO observed that the decision of this tribunal in AY 2012 The Id. AO observed that the decision of this tribunal in AY 2012 The Id. AO observed that the decision of this tribunal in AY 2012-13 has not been accepted by the revenue and an appeal against the same could not be not been accepted by the revenue a nd an appeal against the same could not be preferred before the Hon'ble High Court due to low tax effect. Accordingly, the Id. preferred before the Hon'ble High Court due to low tax effect. Accordingly, the Id. preferred before the Hon'ble High Court due to low tax effect. Accordingly, the Id. AO observed that the amount of Rs 15,18,250/- received by the assessee is in AO observed that the amount of Rs 15,18,250/ received by the assessee is in the nature of Fee for Technical Services (FTS) and brought to tax the same as per the nature of Fee for Technical Services (FTS) and b rought to tax the same as per Article 13(2)(a)(ii) of the India UK DTAA in the hands of the assessee. Article 13(2)(a)(ii) of the India UK DTAA in the hands of the assessee. Article 13(2)(a)(ii) of the India UK DTAA in the hands of the assessee. b) Management Fees & Common Cost recharge Rs5,67,33,937/ b) Management Fees & Common Cost recharge Rs5,67,33,937/ b) Management Fees & Common Cost recharge Rs5,67,33,937/- This is the amount charged to Buro India towards various costs incurred. The This is the amount charged to Buro India towards various costs incurred. The This is the amount charged to Buro India towards various costs incurred. The same has not been offered to tax by the assessee on the contention that these same has not been o ffered to tax by the assessee on the contention that these being management cost recharges does not make available any knowledge, being management cost recharges does not make available any knowledge, being management cost recharges does not make available any knowledge, skill, process, know-how and experience to Buro India as per the terms of the skill, process, know how and experience to Buro India as per the terms of the India UK DTAA. The assessee made the following submissions before the Id. India UK DTAA. The assessee made the followin ubmissions before the Id. AO:-

The Assessee has incurred certain common expenses in relation to Information The Assessee has incurred certain common expenses in relation to Information The Assessee has incurred certain common expenses in relation to Information Technology Business Development, Finance, Human Resource Management etc. Technology Business Development, Finance, Human Resource Management etc. Technology Business Development, Finance, Human Resource Management etc. for the Buro Group entities and the cost for the same is charged to various for the Buro Group entities and the cost for the same is charged to various for the Buro Group entities and the cost for the same is charged to various Buro Group entities based on a predetermined cost allocation/apportionment key Group entities based on a predetermined cost allocation/apportionment key Group entities based on a predetermined cost allocation/apportionment key (including Buro India) along with 5% mark- up. The sample copies of the invoices (including Buro India) along with 5% mark up. The sample copies of the invoices pertaining to cost recharge raised by the assessee during the year is attached pertaining to cost recharge raised by the assessee during the year is attached pertaining to cost recharge raised by the assessee during the year is attached for your reference The broad functions performed by the assessee for the Buro group (including The broad functions performed by the assessee for the Buro group (including The broad functions performed by the assessee for the Buro group (including Buro India) includes following Buro India) includes following • IT Functions: The central IT team which is based in UK manages the entire IT Functions: The central IT team which is based in UK manages the entire IT Functions: The central IT team which is based in UK manages the entire group-wide IT systems. The functions of this wide IT systems. The functions of this team involves managing team involves managing general subscriptions, hardware and practice management systems. subscriptions, hardware and practice management systems. subscriptions, hardware and practice management systems. • Business Development: This involves management of the Business Development: This involves management of the Business Development: This involves management of the Buro Happold Brand name and performing marketing function. Brand name and performing marketing function. • Finance. This team works on international finance matters which affect the Finance. This team works on international finance matters which affect the Finance. This team works on international finance matters which affect the group as a whole Their functions broadly comprise of preparation of up as a whole Their functions broadly comprise of preparation of up as a whole Their functions broadly comprise of preparation of management accounts, group reporting for statutory accounts purposes, management accounts, group reporting for statutory accounts purposes, management accounts, group reporting for statutory accounts purposes, strategic finance initiatives affecting the whole group, including managing the strategic finance initiatives affecting the whole group, including managing the strategic finance initiatives affecting the whole group, including managing the international tax position and managing the financial position at the group level international tax position and managing t he financial position at the group level • Human Resource Management The team based in UK provides support to Human Resource Management The team based in UK provides support to Human Resource Management The team based in UK provides support to the HR teams of group entities in the following gtanner the HR teams of group entities in the following gtanner o providing consultancy when required providing consultancy when required o setting developing and monitoring HR policies, and setting developing and monitoring HR policies, and o assisting with performance and disciplinary issues. sting with performance and disciplinary issues. • Corporate and Commercial Services: The central legal team assists the Corporate and Commercial Services: The central legal team assists the Corporate and Commercial Services: The central legal team assists the worldwide group entities by dealing with specific legal issues, reviewing worldwide group entities by dealing with specific legal issues, reviewing worldwide group entities by dealing with specific legal issues, reviewing compliance with legal regulations, and dealing with employment a compliance with legal regulations, and dealing with employment a compliance with legal regulations, and dealing with employment and property law matters • Operations. This team is engaged in performing the strategic and Operations. This team is engaged in performing the strategic and Operations. This team is engaged in performing the strategic and operational management function at the group level operational management function at the group level • Project Management Function. These functions benefit the group as a Project Management Function. These functions benefit the group as a Project Management Function. These functions benefit the group as a whole. These includes project management IT systems, quality assurance etc. whole. These includes project management IT syst ems, quality assurance etc.

The above services would qualify as managerial services. However, we would The above services would qualify as managerial services. However, we would The above services would qualify as managerial services. However, we would like to highlight that Article 13 of India-UK DTAA covers only technical and like to highlight that Article 13 of India UK DTAA covers only technical and consultancy services and hence the above services would be qualified as consultancy services and hence the above services would be qualified as consultancy services and hence the above services would be qualified as business income and in the absence of Permanent Establishment (PE) of the ness income and in the absence of Permanent Establishment (PE) of the ness income and in the absence of Permanent Establishment (PE) of the assessee in India, the said income shall not be considered as taxable in India as assessee in India, the said income shall not be considered as taxable in India as assessee in India, the said income shall not be considered as taxable in India as per India-UK DTAA UK DTAA Further, even where it considered that few of the services may be considered as Further, even where it considered that few of the services may be considered as Further, even where it considered that few of the services may be considered as technical or consultancy services, the same would still be not taxable under cal or consultancy services, the same would still be not taxable under cal or consultancy services, the same would still be not taxable under Article 13(4)(c) of the India-UK DTAA as these services does not make available Article 13(4)(c) of the India UK DTAA as these services does not make available any technical knowledge, experience, skill knowhow or processes, etc. to the any technical knowledge, experience, skill knowhow or processes, etc. to the any technical knowledge, experience, skill knowhow or processes, etc. to the recipient of the service. The said position is also confirmed by the Hon'ble ITAT recipient of the service. Th e said position is also confirmed by the Hon'ble ITAT in Assessee's own case during AY 2012-13" in Assessee's own case during AY 2012 The Id. AO concluded that the payment received under the head 'Cost Recharge' The Id. AO concluded that the payment received under the head 'Cost Recharge' The Id. AO concluded that the payment received under the head 'Cost Recharge' would be Royalty as per the Act as well as per India UK DTAA as it is received would be Royalty as per the Act as well as per India UK DTAA as it is received would be Royalty as per the Act as well as per India UK DTAA as it is received as consideration for the use of, or the right to use the trademark or brand name consideration for the use of, or the right to use the trademark or brand name consideration for the use of, or the right to use the trademark or brand name 'Buro Happold' owned by it. He also observed that description of the services 'Buro Happold' owned by it. He also observed that description of the services 'Buro Happold' owned by it. He also observed that description of the services under all heads as per the agreement mentioned earlier clearly shows that the under all heads as per the agreement mentioned earlier clearly shows that the under all heads as per the agreement mentioned earlier clearly shows that the assessee is charging Buro India for the use of, or the right to use the information assessee is charging B uro India for the use of, or the right to use the information concerning industrial, commercial or scientific experience. Therefore, the amount concerning industrial, commercial or scientific experience. Therefore, the amount concerning industrial, commercial or scientific experience. Therefore, the amount of Rs 5,67,33,937/- received by the assessee under the head 'Cost Recharge' of Rs 5,67,33,937/ received by the assessee under the head 'Cost Recharge' was treated by the Id. AO as Royalty u/s 9(1)(vi) of the Act as well as under was treated by the Id. AO as Royalty u/s 9(1)(vi) of the Act as well as under Article 13 of India UK DTAA. Article 13 of India UK DTAA.

The Id. AO also held the said receipt to be Fee for Technical Services taxable u/s The Id. AO also held the said receipt to be Fee for Technical Services taxable u/s The Id. AO also held the said receipt to be Fee for Technical Services taxable u/s 9(1)(vii) of the Act as well as under Article 13 of India UK DTAA as consultancy 9(1)(vii) of the Act as well as under Article 13 of India UK DTAA as consultancy 9(1)(vii) of the Act as well as under Article 13 of India UK DTAA as consultancy services.

4.

The Id. DRP relied on the findings given by it in assessee's own case for DRP relied on the findings given by it in assessee's own case for DRP relied on the findings given by it in assessee's own case for the AY 2015-16 and decided the issues against the assessee. The Id. DRP in 16 and decided the issues against the assessee. The Id. DRP in 16 and decided the issues against the assessee. The Id. DRP in Para 6.4. of its directions had also addressed the aspect of the impugned issues Para 6.4. of its directions had also addressed the aspect of the impugned issues Para 6.4. of its directions had also addressed the aspect of the impugned issues already decided in favour of assessee by this tribunal in Asst Year 2012 already decided in favour of asse ssee by this tribunal in Asst Year 2012-13 by stating that the accepting the tribunal order in the year under consideration stating that the accepting the tribunal order in the year under consideration stating that the accepting the tribunal order in the year under consideration would result in closure to the issues involved in view of the fact that the would result in closure to the issues involved in view of the fact that the would result in closure to the issues involved in view of the fact that the department cannot challenge the order of DRP in an appeal. On this ground, the department cannot challenge the order of DRP in an appea l. On this ground, the Id. DRP upheld the action of the Id. AO in the draft assessment order. Id. DRP upheld the action of the Id. AO in the draft assessment order. Id. DRP upheld the action of the Id. AO in the draft assessment order.

5.

Pursuant to the directions of the Id. DRP, the Id. AO passed the final Pursuant to the directions of the Id. DRP, the Id. AO passed the final Pursuant to the directions of the Id. DRP, the Id. AO passed the final assessment order u/s 143(3) rws 144C(13) of the Act on 27/04/2022. assessment order u/s 143(3) rws 144C(13) of the Act on 27/04/2022. assessment order u/s 143(3) rws 144C(13) of the Act on 27/04/2022.

Aggrieved, the assessee is in appeal before us. assessee is in appeal before us.

6.

At the outset, we find that the issue in dispute is squarely covered in At the outset, we find that the issue in dispute is squarely covered in At the outset, we find that the issue in dispute is squarely covered in favour of the assessee by the order of this tribunal in AY 2012 favour of the assessee by the order of this tribunal in AY 2012 favour of the assessee by the order of this tribunal in AY 2012-13 in dated 15/02/2019 wherein it was held as under: 1296/Mum/2017 dated 15/02/2019 wherein it was held as under: 1296/Mum/2017 dated 15/02/2019 wherein it was held as under: -

14.

........

15. ........

16. ........

17. ........

18. ........

19. .........

20. .........

21. .........

22. .........

6.1. We find that this tribunal for the AY 2014 We find that this tribunal for the AY 2014-15 in 15 in dated 13/11/2019 and for the AY 2015-16 in ITA No. 834/Mum/201 dated 13/11/2019 and for the AY 2015 16 in ITA No. 834/Mum/2019 dated 30/12/2020 had restored the issues to the file of Id. AO in view of the fact that 30/12/2020 had restored the issues to the file of Id. AO in view of the fact that 30/12/2020 had restored the issues to the file of Id. AO in view of the fact that the assessee had actually offered the receipts as its income in the return of the assessee had actually offered the receipts as its income in the return of the assessee had actually offered the receipts as its income in the return of income but by way of additional ground claimed to be not taxable in India as per income but by way of additional ground claimed to be not taxable in India as per income but by way of additional ground claimed to be not taxable in India as per the Act and as well as per the Treaty. In view of this fact, the tribunal restored and as well as per the Treaty. In view of this fact, the tribunal restored and as well as per the Treaty. In view of this fact, the tribunal restored the issue to the file of Id. AO. Whereas, for the AY 2017- 18 i.e the year under the issue to the file of Id. AO. Whereas, for the AY 2017 18 i.e the year under consideration before us, the assessee had claimed the subject mentioned consideration before us, the assessee had claimed the subject mentioned consideration before us, the assessee had claimed the subject mentioned receipts as not chargeable to tax in India in the return of income itself. Hence we receipts as not chargeable to tax in India in the return of income itself. Hence we hold that the decision of this tribunal for AY 2014-15 and 2015 hold that the decision of this tribunal for AY 2014 15 and 2015-16 would not be applicable here and the decision of this tribunal for AY 2012 applicable here and the decision of this tribunal for AY 2012 applicable here and the decision of this tribunal for AY 2012-13 dated 15/02/2019 would be applicable here in view of same facts. Hence respectfully 15/02/2019 would be applicable here in view of s ame facts. Hence respectfully following the decision of this tribunal in AY 2012-13 referred supra, the Ground following the decision of this tribunal in AY 2012 13 referred supra, the Ground Nos. 1 and 2 raised by the assessee are allowed. Nos. 1 and 2 raised by the assessee are allowed.

7. In view of our decision rendered hereinabove for Ground Nos. 1 & 2, the In view of our decision rendered hereinabove for Ground Nos. 1 & 2, the In view of our decision rendered hereinabove for Ground Nos. 1 & 2, the adjudication of Ground No. 3 would become infructuous as it only pertains to the adjudication of Groun d No. 3 would become infructuous as it only pertains to the rate of tax if the aforesaid receipts were treated as income of the assessee. rate of tax if the aforesaid receipts were treated as income of the assessee. Hence the Ground No. 3 is hereby dismissed as infructuous. Hence the Ground No. 3 is hereby dismissed as infructuous. Hence the Ground No. 3 is hereby dismissed as infructuous.

8. The Ground No. 4 is challenging the levy of interest u/ The Ground No. 4 is challenging the levy of interest u/ The Ground No. 4 is challenging the levy of interest u/s 234B of the Act which is consequential in nature and does not require any specific adjudication. which is consequential in nature and does not require any specific adjudication. which is consequential in nature and does not require any specific adjudication.

9.

In the result, the appeal of the assessee is partly allowed." In the result, the appeal of the assessee is partly allowed." In the result, the appeal of the assessee is partly allowed."

7.

Since the issues are exactly similar and grounds as well as the Since the issues are exactly similar and grounds as well as the Since the issues are exactly similar and grounds as well as the facts are also identical, respectfully following the above decision in are also identical, respectfully following the above decision in are also identical, respectfully following the above decision in assessee's own case for the A.Y. 2019 assessee's own case for the A.Y. 2019-20 and A.Y. 2012 20 and A.Y. 2012-13 and also following the principle of consistency, we allow the appeal filed by following the principle of consistency, we allow the appeal filed by following the principle of consistency, we allow the appeal filed by the assessee. Grounds raised by the assessee are allowe the assessee. Grounds raised by the assessee are allowe the assessee. Grounds raised by the assessee are allowed.

8.

In the result, appeal filed by the assessee is allowed. In the result, appeal filed by the assessee is allowed. In the result, appeal filed by the assessee is allowed.

Order pronounced in the open Court on Order pronounced in the open Court on 20/01 /01/2025.

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