DNV GL SE-INDIA BRANCH,MUMBAI vs. DCIT (IT) 2(1)(2), MUMBAI

Brief facts of the case are that the assessee-company is a tax resident of Germany and engaged in the business of inspection and certification services in Marine Industries, filed its return of income on 30.11.2011 declaring total income of Rs. 1,27,75,313/-. The return of income was selected for scrutiny. In the return of income the assessee reported international transaction with IT(TP)A No. 2379 M 17-M/s DNV GL SE-India Branch its associated enterprises (AE). The assessee selected comparable uncontrolled price (CUP) as most appropriate method to conclude the transaction at arm’s length. The assessing officer made reference under section 92CA(1) to transfer pricing officer (TPO) for computation of Arms Length Price (ALP). The learned TPO after granting opportunity to the assessee suggested upward of adjustment of Rs. 2,06,71,083/-. Consequent upon receipt of order of TPO, the assessing officer passed Draft Assessment Order. The Draft Assessment Order was served upon the assessee. The assessee filed objection before the DRP. Before DRP, the assessee made submission that issue is covered by the decision of Tribunal in assessee’s case for Assessment Year 2007-08, however, the ld. CIT(A) rejected the submission of assessee by taking view that the decision of Tribunal is not accepted by department and appeal has been filed before Hon’ble Bombay High Court. Accordingly, the DRP rejected the objection vide its direction dated 18.12.2016. However, the Assessing Officer/TPO was directed to make only one addition of Rs. 20671083. On receipt of order of DRP dated 18.12.2016, the Assessing Officer passed the final assessment order dated 27.01.2017 and made addition of Rs. 20671083/-. Thus, aggrieved by the additions made in pursuance of order of DRP, the assessee has filed the present appeal before Tribunal.

We have heard the submission of learned authorized representative (AR) of the assessee and the learned departmental representative (DR) for the revenue and perused the material available on record. At the outset of hearing the learned AR of the assessee submits that the grounds of appeal are covered in favour of assessee by the decision of Tribunal in assessee’s own case for assessment year 2007-08, 2010-11 & 2011-12, wherein it was held revenue earned by the head office should not be subject to tax in India.

It was submitted that there is no change in the facts for the year under consideration. The learned AR for the assessee also placed on record the copy of decision of Tribunal for Assessment Year 2007-08, 2010-11 & 2011-12 in 3915/Mum/2018 & 3139/Mum/2018 respectively.

On the other hand, the ld. DR for the revenue supported the order of authorities below.

We have noted that in appeal for Assessment Year 2010-11 in dated 25.10.2019, the co-ordinate bench of Tribunal by following the decision of Tribunal in Assessment Year 2007-08 & 2011-12 passed the following order:

Considering the consistent decision of the coordinate bench of tribunal, on identical issues, when no material difference in facts are brought to our notice, therefore, we do not find any merit in making addition/adjustment on account of attribution of head officer share in invoices raised by head office and head office share in invoices raised by Indian branch. Thus the grounds of appeal raised by assessee are allowed in favour of assessee being covered in favour of assessee by the order of Tribunal in earlier years as stated above.

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