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Income Tax Appellate Tribunal, MUMBAI BENCH “I”, MUMBAI
Before: SHRI VIKAS AWASTHY & SHRI G. MANJUNATHA
PER VIKAS AWASTHY, JM:
These appeals have been filed by the assessee for the assessment years 2011-12 & 2012-13 assailing the assessment orders passed by the Assessing Officer under section 143(3) r.w.s. 144C(13) of the Income Tax Act,1961 (in short ‘the Act’) for the respective assessment years. Since the issues involved in these appeals are identical, these appeals are taken up together for adjudication and are disposed of by this composite order.
2 ITA NO.1715/MUM/2015(A.Y.2011-12) ITA NO.2136/MUM/2016(A.Y.2012-13)
A perusal of the appeal files shows that no one is appearing to represent the assessee since 18/07/2018. As is evident from the acknowledgement available on the appeal file, notice of hearing of the appeals were served to the assessee on several occasions. From the records it appear that during pendency of these appeals, the assessee company has gone under liquidation. On 22/7/2019 the notice was issued to the Liquidation Board through the office of Departmental Representative for 27/08/2019. As per the acknowledgment available on record the notice was served on 01/08/2019. Since, the Bench did not function on 27/08/2019, the appeals were adjourned to 09/10/2019. Fresh notice to Liquidation Board was issued through office of Departmental Representative. Despite service of notice, none appeared on behalf of the assessee. It seems that the assessee/Liquidation Board is not keen to pursue the present appeals. Under these circumstances we proceed to decide the appeals of the assessee with the assistance of ld.Departmental Representative and the material available on record.
ITA NO.1715/MUM/2015(A.Y.2011-12)
Shri V. Sreekar representing the Department submitted that the assessee is a foreign company incorporated in Norway. The assessee company entered into an agreement with Aker Borgesrad Operations(ABO), Norway to provide maritime and technical staff for the operation of Floating Production Ships(FPSO) ‘Dhirubhai 1’ given to Reliance Industries Limited(RIL) by Aker Floating Production (Norway)
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(AFO). RIL is operating the Vessel for exploration of oil on India waters. The assessee provided staff of qualified officers and crew for the operation of FPSO ‘Dhirubhai 1’ in India for exploration of oil in Indian waters. ABO paid fixed monthly remuneration for providing services as management fee to the assessee. The issue in the present appeal is whether the amount received by the assessee as compensation for providing crew for the ship constitutes FTS. The DRP and Assessing Officer has held such payments as ‘Fee for Technical Services’ under Article-13 of the Indo-Norway Double Taxation Avoidance Agreement(DTAA).
The ld.Departmental Representative contended that the second issue in appeal is with respect to ‘Permanent Establishment’(PE) of the foreign company in India. The DRP and the Assessing Officer have held that the assessee has PE in India as per provisions of Article-5 of the Indo- Norway DTAA and, hence, the income of the assessee is exigible to tax as ‘business income’ under Article-7 of Indo-Norway DTAA.
The other issues that have emerged in the appeal is applicability of Transfer Pricing (TP) provisions and charging of interest under section 234B of the Act. The ld.Departmental Representative vehemently supported the findings of DRP and Assessing Officer and prayed for dismissing the appeals of the assessee.
We have heard the submissions made by ld.Departmental Representative and have perused the material available on record. The assessee in appeal has primarily raised three issues challenging the
4 ITA NO.1715/MUM/2015(A.Y.2011-12) ITA NO.2136/MUM/2016(A.Y.2012-13)
additions made in assessment order viz; (i) Payments received by assessee for supply of crew held as ‘Fee for Technical Services’; (ii) The assessee is having PE in India, consequently, the income of the assessee is exigible to tax as ‘business income’under Article-7 of Indo-Norway DTAA; and (iii)Charging of interest under section 234B of the Act.
No material has been placed on record before us to show that the findings of Assessing Officer/DRP are perverse. In the absence of any contrary material, we do not find any reason to interfere with the impugned assessment order. Accordingly, the same is upheld.
In the result, appeals of the assessee is dismissed.
ITA NO.2136/MUM/2016(A.Y.2012-13)
In the appeal for assessment year 2012-13 the grounds raised by the assessee are similar. Therefore, the findings given by us while deciding the appeal of assessee for assessment year 2011-12 would mutatis mutandis apply to assessment year 2012-13, as well.
The assessee in assessment year 2012-13 has raised another ground assailing levy of penalty under section 271 and 271BA of the Act. This ground of appeal by the assessee is premature at this stage. Accordingly, the same is dismissed, as such.
5 ITA NO.1715/MUM/2015(A.Y.2011-12) ITA NO.2136/MUM/2016(A.Y.2012-13)
In the result, appeal of the assessee for assessment year 2012-13 is dismissed.
To sum up both the appeals of assessee are dismissed.
Order pronounced in the open court on Thursday, the 12th day of December, 2019.
Sd/- Sd/- (G. MANJUNATHA) (VIKAS AWASTHY) ACCOUNTANT MEMBER JUDICIAL MEMBER Mumbai, Dated 12/12/2019 Vm, Sr. PS(O/S)
Copy of the Order forwarded to : 1. The Appellant , 2. The Respondent. 3. The CIT(A)- 4. CIT 5. DR, ITAT, Mumbai 6. Guard file. BY ORDER, //True Copy// (Dy./Asstt. Registrar) ITAT, Mumbai