ACIT,NEW DELHI vs. M/S DSD NOELL GMBH, NEW DELHI

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ITA 562/DEL/2015Status: DisposedITAT Delhi26 June 2018AY 2008-094 pages

In favour of the assessee: the Revenue's appeal was dismissed. From the AI summary of this appeal.

AI SummaryDismissed

What did the Tribunal hold?

The Tribunal upheld the CIT(A)'s decision, following the precedent set by the Tribunal and confirmed by the jurisdictional High Court in the assessee's own case for earlier assessment years. The income was held to be governed by Section 44BBB(1) of the Act.

What were the facts?

The assessee, a non-resident German company, entered into contracts with NHPC for hydro mechanical works. The Assessing Officer (AO) denied the application of Section 44BBB and assessed income based on accounts at a higher profit rate, deviating from the assessee's declared income under the presumptive taxation scheme.

What were the issues?

Whether the assessee's income from the NHPC contract is taxable under the presumptive taxation scheme of Section 44BBB(1) or to be assessed based on its accounts. Whether the AO can deviate from the presumptive rate when accounts are maintained.

Which sections of the Income-tax Act were involved?

Section 44BBB

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, DELHI BENCH: ‘B’ NEW DELHI

Before: SHRI R.S. SYAL & SHRI K.NARASIMHA CHARY

For Appellant: Ms. Rachna Singh, CIT DR
Hearing: 25.06.2018Pronounced: 26.06.2018

ORDER PER K. NARASIMHA CHARY, J.M. This is an appeal by the Revenue against the orders dated 24.11.2014 in Appeal No. 08/2011-12 passed by the Ld. Commissioner of Income- tax (Appeals)-42, New Delhi (for short hereinafter called “Ld. CITA”).

2.

Assessee is a non-resident company incorporated under the laws of Germany. The Company had entered into agreements with M/s National Hydroelectric Power Corporation (NHPC) for the execution of Hydro mechanical works of Dhauliganga HE Project Stage-1 in Uttar Pradesh. The said contracts involved supply of plant and equipment, and provisioning of installation and other 2 services. For executing the above contract, the Company opened its project office in India in 2002.

3.

Assessee filed its return of Income for the AY declaring an income of Rs.40,57,862/- based on gross receipts of Rs.4,05,78,619/- as per provisions of Section 44BBB of the Income-tax Act, 1961(“the Act). During assessment proceedings, the A.O. denied the application of Section 44BBB relying on assessment orders of earlier AYs, on the ground that as the assessee had maintained accounts of the Project Office for the purpose of compliances under the Companies Act, 1956 and therefore its income was to be assessed, on the basis of such accounts, under sub-section (2) of Section 44BBB of the Act. The AO applied average rate of profit of 49% and computed taxable income at Rs.1,98,83,514/- in assessment order dated 28.02.2011. 4. When the assessee carried the matter in appeal, learned CIT(A) followed the order of the Tribunal for the Asstt. Years 2004-05 to 2006-07 in assessee’s own case, as confirmed by the jurisdictional High Court and decided the appeal in favour of the assessee. Challenging the relief granted by the learned CIT(A) to the assessee, Revenue preferred this appeal. 5. Learned DR argued that even when the assessee was maintaining the proper accounts in the earlier years, learned CIT(A) ought not to have found that the income of the assessee shall be assessed u/s 44BBB of the Act or the that the same should be assessed at presumptive rate of 10%. 6. Learned AR submitted as the issue involved in this matter is no longer res integra and in assessee’s own case for the Asstt. Years 2004-05 to 2006-07, a coordinate bench of this Tribunal held that the income derived from the relevant contract with National Hydroelectric Power Corporation (NHPC) is governed by

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