Ayesa Ingenieria Y Arquitectura S.A. v. ACIT

Case Laws Analysis
REFERRED Serco India (P.) Ltd. v. Dy. CIT 2023 TaxPub(DT) 6187 (Del-Trib)
REFERRED Pr CIT v Boeing India (P) Ltd 2022 TaxPub(DT) 6816 (Del-HC)
REFERRED Pr. CIT v. Future First Info. Services (P) Ltd. 2022 TaxPub(DT) 4748 (Del-HC)
REFERRED CIT v. Kishore Rao & Ors. (HUF) 2016 TaxPub(DT) 1952 (Karn-HC)
REFERRED CIT v. PVS Memorial Hospital Ltd. 2015 TaxPub(DT) 3001 (Ker-HC)
REFERRED CIT v. S.K. Tekriwal 2013 TaxPub(DT) 0240 (Cal-HC)
REFERRED CIT v. Vegetable Products Ltd. 1973 TaxPub(DT) 0421 (SC)

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The Tax Publishers2024 TaxPub(DT) 1731 (Del-Trib) IN THE ITAT DELHI BENCH G.S. PANNU, V.P. & ASTHA CHANDRA, J.M. Ayesa Ingenieria Y Arquitectura S.A. v. ACIT ITA Nos. 2173 & 2174/Del/2023 8 April, 2024 Assessee by: Vivek Sarin, Advocate, D.P.Singh, Advocate, DD Gupta, Advocate Department by: Vizay B. Vasanta, CIT-DR ORDER *Astha Chandra, J.M.* Both the appeals filed by the assessee are directed against two separate final assessment orders dated 31-5-2023 and 30-5-2023 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 years (AYs) 2020-21 and 2021-22 respectively. Since common issues are involved in both the appeals, these were heard together and are disposed of by this common order. 2. The assessee has raised the following grounds of appeal:- A.Y. 2020-21 1. That in facts and circumstances of the case, the learned assessing officer erred in law in making the addition of Rs. 1,83,71,951to the returned income of the appellant which is liable to be deleted. 2. That in facts and circumstances of the case, the learned assessing officer erred in law in making addition of Rs. 1,83,71,951 by applying provisions of section 7(3) of DTAA between India and Spain which is devoid of facts and merits of the case, hence hit addition made is liable to be deleted. 3. That in facts and circumstances of the case, the findings arrived at by the assessing officer is perverse and based on erroneous assumptions, the learned assessing officer failed to appreciate that the appellant company is working since 2009 as Branch Office in India, no special services being provided by the expatriates and there is no increase in revenue on YOY basis, the assessment order passed on the basis of pre-determined mind set of the learned assessing officer and the same is not sustainable under law. 4. That in facts and circumstances of the case, the learned assessing officer erred in law in considering the services between head office and Branch office as fees for Technical Services without appreciating that the condition of Make Available clause is not satisfied in transaction between head office and Branch office which is a pre-condition of Double Tax Avoidance Agreement between India and Spain read with protocol of Most Favored Nation (MFN), hence such transaction cannot be considered as Fees for Technical Services. SUBSCRIBE FOR FULL CONTENT

The Tax Publishers2024 TaxPub(DT) 1731 (Del-Trib)

IN THE ITAT DELHI BENCH

G.S. PANNU, V.P. & ASTHA CHANDRA, J.M.

Ayesa Ingenieria Y Arquitectura S.A. v. ACIT

ITA Nos. 2173 & 2174/Del/2023

8 April, 2024

Assessee by: Vivek Sarin, Advocate, D.P.Singh, Advocate, DD Gupta, Advocate

Department by: Vizay B. Vasanta, CIT-DR

ORDER

Astha Chandra, J.M.

Both the appeals filed by the assessee are directed against two separate final assessment orders dated 31-5-2023 and 30-5-2023 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 years (AYs) 2020-21 and 2021-22 respectively. Since common issues are involved in both the appeals, these were heard together and are disposed of by this common order.

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

A.Y. 2020-21

1. That in facts and circumstances of the case, the learned assessing officer erred in law in making the addition of Rs. 1,83,71,951to the returned income of the appellant which is liable to be deleted.

2. That in facts and circumstances of the case, the learned assessing officer erred in law in making addition of Rs. 1,83,71,951 by applying provisions of section 7(3) of DTAA between India and Spain which is devoid of facts and merits of the case, hence hit addition made is liable to be deleted.

3. That in facts and circumstances of the case, the findings arrived at by the assessing officer is perverse and based on erroneous assumptions, the learned assessing officer failed to appreciate that the appellant company is working since 2009 as Branch Office in India, no special services being provided by the expatriates and there is no increase in revenue on YOY basis, the assessment order passed on the basis of pre-determined mind set of the learned assessing officer and the same is not sustainable under law.

4. That in facts and circumstances of the case, the learned assessing officer erred in law in considering the services between head office and Branch office as fees for Technical Services without appreciating that the condition of Make Available clause is not satisfied in transaction between head office and Branch office which is a pre-condition of Double Tax Avoidance Agreement between India and Spain read with protocol of Most Favored Nation (MFN), hence such transaction cannot be considered as Fees for Technical Services.