SAIC Motor Overseas Intelligent Mobility Technology Co. Ltd. v. ACIT

Case Laws Analysis
REFERRED Amadeus IT Group SA Vaish Associates v. ACIT 2023 TaxPub(DT) 6662 (Del-Trib)
REFERRED EY Global Services Ltd. v. Asstt. CIT & Anr. 2022 TaxPub(DT) 0101 (Del-HC)
REFERRED Engineering Analysis Centre of Excellence (P.) Ltd. v. CIT 2021 TaxPub(DT) 1208 (SC)

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The Tax Publishers2024 TaxPub(DT) 1022 (Del-Trib) IN THE ITAT DELHI BENCH SHAMIM YAHYA, A.M. & ASTHA CHANDRA, J.M. SAIC Motor Overseas Intelligent Mobility Technology Co. Ltd. v. ACIT ITA No. 2194/Del/2023 23 February, 2024 Assessee by: Ajay Vohra, Sr. Advocate, Neeraj Jain, Advocate, Shaily Gupta & Himanshu Goel, CA Department by: Vizay B. Vasanta, Commissioner-Departmental Representative ORDER *Astha Chandra, J.M.* The appeal filed by the assessee is directed against the final assessment order dated 22.06.2023 passed under section 143(3) read with section 144C(13) of the Income Tax Act, 1961 (the Act) in pursuance to the directions of Learned Dispute Resolution Panel (DRP) pertaining to the assessment year (AY) 2020-21. 2. The assessee has raised the following grounds of appeal:- 1. That the assessing officer erred on facts and in law in completing assessment under section 143(3) read with section 144C(13) of the Income-tax Act, 1961 ('the Act') at an income of Rs. 18,79,80,556 as against the returned income of Nil under normal provisions of the Act. Validity of assessment proceedings/order: 2 That on the facts and circumstances of the case and in law, the impugned assessment completed vide order dated 22-6-2023 passed by the assessing officer under section 143(3) read with section 144C of the Act ('impugned order') is illegal, bad-in-law and liable to be quashed since the same is barred by limitation. 3. That on the facts and circumstances of the case and in law, the directions issued by the Learned Dispute Resolution Panel ('DRP') is non-est and invalid in absence of Document Identification Number ('DIN'), though intimated subsequently. 3.1 That on the facts and circumstances of the case and in law, the final assessment order passed in conformity with invalid directions of DRP is, therefore, invalid and barred by limitation. Without prejudice- Merits 4. That on the facts and circumstances of the case and in law, assessing officer erred in holding that the payment received by the appellant from sale of software to MG Motor India Private Limited ('MG India') is taxable as royalty in India in terms of Article 12(3) of the India-China Double Taxation Avoidance Agreement ('DTAA'). 4.1 That on the facts and circumstances of the case and in law, assessing officer erred in arbitrarily holding that supply of software has resulted in imparting of information concerning technical, industrial, commercial, or scientific knowledge, experience or skill, coded in the form of map, navigation, weather, etc. not appreciating that the appellant has merely supplied software licenses to be installed in the motor vehicles manufactured by MG India. Other issues: 5. Without prejudice, the assessing officer erred on facts and in law in subjecting income of the appellant to tax @ 10.92 percent (including surcharge @ 5 percent and education cess @ 3 percent) in terms of section 9(1)(vi) read with section 115A of the Act not appreciating that the said income was taxable @ 10 percent in terms of article 12(2) of the India-China DTAA, which being beneficial to the appellant non-resident would apply. SUBSCRIBE FOR FULL CONTENT

The Tax Publishers2024 TaxPub(DT) 1022 (Del-Trib)

IN THE ITAT DELHI BENCH

SHAMIM YAHYA, A.M. & ASTHA CHANDRA, J.M.

SAIC Motor Overseas Intelligent Mobility Technology Co. Ltd. v. ACIT

ITA No. 2194/Del/2023

23 February, 2024

Assessee by: Ajay Vohra, Sr. Advocate, Neeraj Jain, Advocate, Shaily Gupta & Himanshu Goel, CA

Department by: Vizay B. Vasanta, Commissioner-Departmental Representative

ORDER

Astha Chandra, J.M.

The appeal filed by the assessee is directed against the final assessment order dated 22.06.2023 passed under section 143(3) read with section 144C(13) of the Income Tax Act, 1961 (the Act) in pursuance to the directions of Learned Dispute Resolution Panel (DRP) pertaining to the assessment year (AY) 2020-21.

2. The assessee has raised the following grounds of appeal:-

1. That the assessing officer erred on facts and in law in completing assessment under section 143(3) read with section 144C(13) of the Income-tax Act, 1961 ('the Act') at an income of Rs. 18,79,80,556 as against the returned income of Nil under normal provisions of the Act.

Validity of assessment proceedings/order:

2 That on the facts and circumstances of the case and in law, the impugned assessment completed vide order dated 22-6-2023 passed by the assessing officer under section 143(3) read with section 144C of the Act ('impugned order') is illegal, bad-in-law and liable to be quashed since the same is barred by limitation.

3. That on the facts and circumstances of the case and in law, the directions issued by the Learned Dispute Resolution Panel ('DRP') is non-est and invalid in absence of Document Identification Number ('DIN'), though intimated subsequently.

3.1 That on the facts and circumstances of the case and in law, the final assessment order passed in conformity with invalid directions of DRP is, therefore, invalid and barred by limitation.

Without prejudice- Merits

4. That on the facts and circumstances of the case and in law, assessing officer erred in holding that the payment received by the appellant from sale of software to MG Motor India Private Limited ('MG India') is taxable as royalty in India in terms of Article 12(3) of the India-China Double Taxation Avoidance Agreement ('DTAA').

4.1 That on the facts and circumstances of the case and in law, assessing officer erred in arbitrarily holding that supply of software has resulted in imparting of information concerning technical, industrial, commercial, or scientific knowledge, experience or skill, coded in the form of map, navigation, weather, etc. not appreciating that the appellant has merely supplied software licenses to be installed in the motor vehicles manufactured by MG India.

Other issues:

5. Without prejudice, the assessing officer erred on facts and in law in subjecting income of the appellant to tax @ 10.92 percent (including surcharge @ 5 percent and education cess @ 3 percent) in terms of section 9(1)(vi) read with section 115A of the Act not appreciating that the said income was taxable @ 10 percent in terms of article 12(2) of the India-China DTAA, which being beneficial to the appellant non-resident would apply.