RAYTHEON EBASCO OVERSEAS LTD,BANGALORE vs. DDIT (IT) 2(1), MUMBAI

At the very outset, it was submitted by the ld. Authorized Representative (AR), the assessee’s counsel, Shri Dinesh Bafna, that the matter stands since settled in the assessee’s favour in-as-much as the Tribunal has, accepting the assessee’s case that the impugned receipt, i.e., against the services rendered, is not a fees for included services (FIS) as per the provisions of Article 12 of Double Taxation Avoidance (A.Y. 1998-99) Raytheon Ebasco Overseas Ltd. vs. Dy. DIT (IT) Agreement (DTAA) between India and USA, held that the same was not FTS, being linked inextricably to the setting up of the (power) project, and essentially in the nature of start-up services and sale of equipment. The twin test required to satisfy the condition of ‘make available’ specified in Article 12 afore-referred, as laid down in the decision in CIT vs. De Beers India Minerals (P.) Ltd. [2012] 346 ITR 467 (Kar), is not met. The impugned receipt is accordingly not taxable. Toward this, he would take us to the relevant part (para 6 onwards) of the tribunal’s order, placing a copy of the same on record (in dated 11.3.2016). The appeal of the assessee having been allowed by the tribunal thus, the penalty would not survive. The ld. DR conceded to this being the position.

We have heard the parties, and perused the material on record. Without doubt, the assessee’s appeal agitating its’ assessment having been since allowed by the tribunal, no question of penalty u/s. 271(1)(c) of the Act survives. The impugned order is accordingly set aside, deleting the penalty. We may though clarify that if any subsequent stage the tribunal’s order, being appealable, is reversed or modified – to any extent, the Revenue shall; we having not decided the appeal on merits, be at liberty to move the tribunal for the restoration of the instant appeal for a decision on merits. We decide accordingly.

In the result, the assessee’s appeal is allowed. प�रणामतः �नधा�रती क� अपील �वीकृत क� जाती है । Order pronounced in the open court on May 02, 2016