INSPECTORATE (SINGAPORE) PTE. LTD,KOLKATA vs. ACIT,INTERNATIONAL TAXATION, CIRCLE-2(1)(1), NEW DELHI

IN THE INCOME TAX APPELLATE TRIBUNAL, DELHI BENCH: ‘D’ NEW DELHI

BEFORE SHRI SAKTIJIT DEY, JUDICIAL MEMBER AND DR. B.R.R. KUMAR, ACCOUNTANT MEMBER

ITA No.6361/Del/2017 Assessment Year: 2014-15 And ITA No.7392/Del/2019 Assessment Year: 2015-16

Inspectorate (Singapore) Pte. Vs. ACIT, Ltd., International Taxation, C/o- Deloitte Haskins & Sells Circle -2(1)(1), LLP, Bengal Intelligent Park, New Delhi Building Omega, 14th Floor, Block EP & GP, Salt Lake Electronics Complex, Kolkata PAN :AACCI3245C (Appellant) (Respondent)

Appellant by None Department by Sh. Vizay Vasanta, CIT (DR)

Date of hearing 18.04.2023 Date of pronouncement 27.04.2023

ORDER PER SAKTIJIT DEY, JM: Captioned appeals have been filed by the assessee

challenging the final assessment order for the assessment year

2014-15 and the order of learned Commissioner of Income Tax

(Appeals) in assessment year 2015-16.

ITA Nos.6361/Del/2017 & 7392/Del/2019 AYs: 2014-15 & 2015-16

the assessee. Even, there is no applicable by the assessee seeking

adjournment.

hearing notices issued to the assessee, there is no response from

assessee’s side. Having failed in the attempt to serve hearing

notices through postal authorities several attempts were made to

serve notice through email in the email ID provided in Form 36 for

assessment year 2015-16. Though, the notices sent through mail

have been delivered to assessee’s email ID, still, there is no

response from the assessee. These facts clearly reveal complete

lack of interest of the assessee in prosecuting the present appeals.

Since, sufficient opportunity of hearing has already been afforded

to the assessee and the appeals are pending for past so many

years, we deem it appropriate to dispose of them ex parte qua the

assessee after hearing learned Departmental Representative and

based on materials available on record.

15 is concerned, the solitary issue arising for consideration is

whether the amount received by the assessee from Indian

customer is in the nature of Fee for Technical Services (FTS) 2 | P a g e

ITA Nos.6361/Del/2017 & 7392/Del/2019 AYs: 2014-15 & 2015-16

under the domestic law as well as under Article 12 of India –

Singapore Double Taxation Avoidance Agreement (DTAA).

company and a tax resident of Singapore. As stated, the assessee

provides inspection and testing services in various sectors,

namely, energy projects, metals and minerals, oil and petroleum,

petrochemicals, agriculture, consumer projects, pre-shipment

inspection and marine. In the year under consideration, assessee

had provided such services to various clients/customers in India

and earned revenue of Rs.1,39,71,569/-. In course of assessment

proceeding, the Assessing Officer called upon the assessee to

show-cause as to why the receipt should not be treated as FTS,

both under the Act and the tax treaty. In response, the assessee

furnished a detailed reply stating that the amount cannot be

treated as FTS, since while providing such services, the assessee

has not made available technical knowledge, experience, know-

how etc. which can enable the person acquiring such services to

apply the technology contained therein independently without the

aid and assistance of the assessee. The Assessing Officer,

however, did not find merit in the submission of the assessee.

Accordingly, he treated the receipts as FTS and brought it to tax. 3 | P a g e

ITA Nos.6361/Del/2017 & 7392/Del/2019 AYs: 2014-15 & 2015-16

Against the draft assessment order, the assessee raised objection

before learned DRP. However, learned DRP upheld the decision of

the Assessing Officer.

perused the materials on record. The only reason on which the

assessee has objected taxability of the receipts as FTS is that the

make available condition in terms of Article 12 of India –

Singapore DTAA is not fulfilled. However, from the observations of

learned DRP, it is noticed that similar addition made in the

preceding assessment year was not challenged by the assessee.

Learned DRP has further observed that the assessee has failed to

file a copy of the agreement with the recipient of services to

ascertain the exact nature of the payment received. Before us as

well, the assessee has not furnished any material to rebut the

finding of the departmental authorities. In such a scenario, we do

not find any reason to interfere with the decision of departmental

authorities. Accordingly, grounds are dismissed. Appeal is

dismissed.

16 is concerned, the issue is more or less identical. The only

factual difference being, in this year the assessee has received 4 | P a g e

ITA Nos.6361/Del/2017 & 7392/Del/2019 AYs: 2014-15 & 2015-16

consultancy fee of Rs.3,53,31,200/- from a related party in India,

viz, Inspectorate Griffith India Pvt. Ltd., which has been treated

as royalty/FTS. In course of assessment proceeding, the

Assessing Officer noticed that the assessee had received an

amount of Rs.3,53,31,200/- from its Indian AE. Though, the

assessee claimed that the amount neither being in the nature of

royalty or FTS is not taxable in India, however, the Assessing

Officer was not convinced. He treated the amount received as

royalty/FTS and brought to tax at the hands of the assessee.

While considering the issue in appeal, learned Commissioner

(Appeals) held that the amount received is in the nature of royalty

in terms of Article 12(3) of India - Singapore DTAA. From the

observations of learned Commissioner (Appeals), it is noticed that

while coming to such conclusion, learned Commissioner (Appeals)

has recorded a finding of fact that Indian AE has treated it as

technical know-how fee given to the assessee. In this context,

learned Commissioner (Appeals) has also referred to the

description of fee in Form 26AS. The assessee had not brought

any material on record to controvert the aforesaid finding. In view

of the above, we uphold the decision of learned Commissioner

(Appeals) on this issue. 5 | P a g e

ITA Nos.6361/Del/2017 & 7392/Del/2019 AYs: 2014-15 & 2015-16

Order pronounced in the open court on 27th April, 2023

Sd/- Sd/- (DR. B.R.R. KUMAR) (SAKTIJIT DEY) ACCOUNTANT MEMBER JUDICIAL MEMBER Dated: 27th April, 2023. RK/- Copy forwarded to: 1. Appellant 2. Respondent 3. CIT 4. CIT(A) 5. DR Asst. Registrar, ITAT, New Delhi

6 | P a g e