ACIT CENTRAL CIRCLE-2(2)(2), INTERNATIONAL TAXATION, NEW DELHI vs. NATIONAL PETROLEUM CONSTRUCTION COMPANY, ABU DHABI

PER N. K. BILLAIYA, AM:

2. Whether on the facts and in the circumstances of the case, the Ld.CIT(A) has erred in holding that the activity of Project Office of the assessee were ‘preparatory and auxiliary’ in nature in terms of the Article 5(3)(e) of the Double Taxation Avoidance Agreement between India and UAE.

3. Whether on the facts and in the circumstances of the case, the Ld.CIT(A) has erred in holding that the assessee did not have an Installation Permanent Establishment under Article 5(2)(h) of the Double Taxation Avoidance Agreement between India and UAE.

4. Whether on the facts and in the circumstances of the case, the Ld.CIT(A) has erred in holding that M/s Arcadia Shipping Ltd was not a Dependent Agent Permanent Establishment of the assessee under Article 5(4) of the Double Taxation Avoidance Agreement between India and UAE.

5. Whether on the facts and in the circumstances of the case, the Ld.CIT(A) has erred in holding that no income of the assessee can be attributed to the assessee’s Permanent Establishment in India based on the finding of the AO.

6. Whether on the facts and in the circumstances of the case, the Ld.CIT(A) has erred in holding that the profits attributable to the assessee’s PE at 10% of its total receipts as per the provision of section 44BB of the Income Tax Act, 1961, were not taxable in India.

7. Whether on the facts and in the circumstances of the case, the Ld.CIT(A) has erred in holding that the interest income received from income tax refunds and from deposits is liable to be taxed as per Article 11 of the Double Taxation Avoidance Agreement between India and UAE and not as per Article 7 inspite of being effectively connected with the PE of the assessee.

The assessments for the preceding assessment years i.e. AY 2010- 11, 2011-12, 2012-13, 013-14, 2014-15, 2015-16, 2016-17, 2017- 18, 2018-19 and 2019-20 have also been completed in the almost identical manner wherein it was held that the project office of the assessee constituted a P.E. and profits were computed arising out of the offshore and onshore activities. The nature of activities for the current assessment year under consideration i.e. AY 2020-21 is identical to that of the earlier years, as mentioned above and being so, the facts of the case as far as existence of PE is concerned remain the same as in earlier years. During the course of assessment of the Assessee for earlier assessment years (i.e. AY 2007-08 to AY 2019-20), the aspect of PE of the Assessee and its taxability were examined in detail and discussed. ThereT1 being no material change in the business model and nature of projects executed by the Assessee with ONGC/L&T in India, facts mentioned in the relevant para of the assessment order for AYV 2007-08 to 2019-20 are also being relied upon in the present case.

7. Before us, both, learned counsel appearing for the assessee as well as learned Departmental Representative have fairly submitted that the issues arising in the appeals are squarely covered by the decisions of the Hon'ble High Court and Tribunal in assessee’s own case in the preceding assessment years. 8. Having considered the submissions of the parties, it is observed issues relating to existence of PE through the project office came up for consideration before Hon'ble jurisdictional High Court in assessment years 2007-08 and 2008-09. While deciding the issue, Hon’ble High Court held that assessee didn’t have either fixed place PE or installation PE or dependent agent PE in terms with Article 5 of India-UAE DTAA. Following the aforesaid decision of the Hon’ble jurisdictional High Court, the Tribunal in assessment year 2013-14 to 2015-16 has consistently held that assessee didn’t have any PE in India. Thus, respectfully following the consistent view of the coordinate Benches, as well as, Hon’ble Jurisdictional High court in the past assessment years, we uphold the decision of learned Commissioner (Appeals) on the issue. Grounds raised are dismissed.