Referred Sections:
Section 144C(1) of the Act,
IN THE INCOME TAX APPELLATE TRIBUNAL
DELHI BENCH: `E' NEW DELHI
BEFORE SHRI N.K. BILLAIYA, ACCOUNTANT MEMBER
AND
MS SUCHITRA KAMBLE, JUDICIAL MEMBER
I.T.A. No. 4771/DEL/2016
A.Y. 2012-13
ACIT (International Taxation) Vs National Petroleum Construction
Circle- 2(2)(2), Company
E- 2 Block, Dr. S.P.M. Civic Centre, C/o. M/s. Nangia & Co.,
Minto Road, Suite 4A, Plaza, M6, Jasola
New Delhi New Delhi, Pin: 110025
PAN: AAACN7799J
(Appellant) (Respondent)
Appellant by Ms. Pramita M. Biswas, CIT, DR.
Respondent by Amit Arora, CA
Date of Hearing 10.06.2019
Date of Pronouncement 14.06.2019
ORDER
PER SUCHITRA KAMBLE, JM
This appeal is filed against the order dated 28.06.2016 passed
by the CIT(Appeals)-43, New Delhi for AY 2012-13.
2. Grounds of appeal read as under:
"1. Whether on the facts and in the circumstances of the
case, the CIT(A) erred in holding that National Petroleum
Construction Company ("the assessee") did not have a
Permanent Establishment (PE) in India under Article 5 of
the Double Taxation Avoidance Agreement between India
and UAE (DTAA).
A.Y. 2012-
I.T.A. No. 4771/DEL/2016 , A.Y. 2012-13
National Petroleum Construction Company vs. ACIT
2. Whether on the facts and in the circumstances of the
case, the CIT(A) erred in holding that the profits
attributable to the assessee's PE at 3.56% of its offshore
supply segment and 14.69% of its onshore service
segment, were not taxable in India.
3. Whether on the facts and in the circumstances of the
case, the CIT(A) erred in holding that on the given facts,
interest u/s 234B could not be levied.
4. The appellant craves to add, amend, modify or alter any
grounds of appeal at the time or before the hearing of the
appeal."
3. The assessee company is a company incorporated under the
laws of United Arab Emirates ("UAE") and is tax resident thereof.
The principal activities of the assessee company include fabrication
and installation of onshore and offshore platforms, submarine
pipelines and pipeline coating. The return of income for AY 2012-
13 was filed by the assessee on 27.09.2012 declaring an income of
Rs. 44,94,94,943/-. The basis of filing return of income is as
under:
a) The revenue from contractual receipts from work done inside
India were computed at 10% of gross receipts after deducting
the directly attributable expenses; and
b) Revenue from contractual receipts from work done outside
India was computed at 1% of the gross receipts. In
accordance with the principles laid down in the CBDT
Instruction No. 1767.
2
A.Y. 2012-
I.T.A. No. 4771/DEL/2016 , A.Y. 2012-13
National Petroleum Construction Company vs. ACIT
The return of income was subsequently revised by the assessee on
16.12.2013 by declaring nil income. The case of the assessee was
selected for scrutiny and notice was issued u/s 143(2) of the
Income Tax Act, 1961. The assessment was completed u/s 143(3)
of the Act read with section 144C(1) of the Act, vide order dated
22.05.2015 assessing the total income of the assessee at Rs.
102,08,60,371/-. While concluding the assessment, the Assessing
Officer held that the assessee in terms of Article V of the Double
Taxation Avoidance Agreement (DTAA) between India and UAE
held:
a) Fixed placed permanent establishment (PE) in India in the
form of Project Office (PO);
b) Installation PE in India due to installation activities carried
out in India;
c) Dependent Agent PE (DAPE) in India.
While completing the assessment, the Assessing Officer applied the
principles of Rule 10 of the Income Tax Rules, 1962. Consequent to
the same, the AO in its assessment order passed u/s 143(3) read
with section 144C(3) of the Act and made following additions to the
year disclosed by the assessee in its revised return of income:
1) Addition in respect of offshore supply segment at Rs.
45,76,93,763/-;
2) Additions in respect of onshore service segment at Rs.
56,31,66,608/-.
3
A.Y. 2012-
I.T.A. No. 4771/DEL/2016 , A.Y. 2012-13
National Petroleum Construction Company vs. ACIT
4. Being aggrieved by the assessment order, the assessee filed
appeal before the CIT(A). The CIT(A) allowed the appeal of the
assessee.
5. At the time of hearing, the Ld.AR submitted that the issue
contested herein by the Revenue is already decided by the Tribunal
in assessee's own case for AY 2007-08 and 2008-09 as well as
2009-10 and 2010-11. The Ld.AR further submitted that for AY
2007-08 and 2008-09 the Hon'ble Delhi High Court has confirmed
the decision of the Tribunal.
6. The Ld. DR relied upon the Assessment Order but could not
distinguish the decision of the Tribunal and the Hon'ble High Court
in assessee's own case for earlier assessment years.
7. We have heard both the parties and perused all the relevant
material available on record. It is pertinent to note that for
assessment years 2007-09 and 2008-09 the Tribunal held that
there is no PE in India during the relevant assessment year which
was confirmed by the Hon'ble High Court. In the present
assessment year as well the issues are common and the facts
remain identical to that of the earlier assessment year. The CIT(A)
while deciding this issue, relied upon the decision of the Hon'ble
High Court as well as the Tribunal and after taking cognizance of
the decisions of judicial forums decided the appeal in favour of the
assessee. There is no need to interfere with the findings of the
CIT(A) as the matter is covered in favour of the assessee in
assessee's own case for earlier assessment years. Hence, appeal of
4
A.Y. 2012-
I.T.A. No. 4771/DEL/2016 , A.Y. 2012-13
National Petroleum Construction Company vs. ACIT
the Revenue is dismissed.
8. In the result, the appeal of the Revenue is dismissed.
Order pronounced in the Open Court on 14th June, 2019.
Sd/- Sd/-
(N.K. BILLAIYA) (SUCHITRA KAMBLE)
ACCOUNTANT MEMBER JUDICIAL MEMBER
Dated: 14/06/2019
*Kavita Arora
Copy forwarded to:
1. Appellant
2. Respondent
3. CIT
4. CIT(Appeals)
5. DR: ITAT
ASSISTANT REGISTRAR
ITAT NEW DELHI
Date
Draft dictated on 13.6.2019
Draft placed before author 14.6.2019
Draft proposed & placed before the second
member
Draft discussed/approved by Second
Member.
Approved Draft comes to the Sr.PS/PS
Kept for pronouncement on
&
Order uploaded on :
File sent to the Bench Clerk
Date on which file goes to the AR
Date on which file goes to the Head Clerk.
Date of dispatch of Order.
5
|
