Petitioner claims that the AO has wrongly computed the Total Income of his company

Sumitomo Corporation has appealed to the Income Tax Appellate Tribunal regarding the assessment of its total income for the 2013-14 financial year. The company disputes an addition of over Rs 3.8 crore made by the Assessing Officer, arguing that income from supplies to Maruti Suzuki India Limited should not be taxable in India. Sumitomo contends it has no Permanent Establishment (PE) in India and that title and supply of equipment passed in Japan, thus income did not accrue in India.

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

 BEFORE SHRI R. K. PANDA, ACCOUNTANT MEMBER
AND
 MS SUCHITRA KAMBLE, JUDICIAL MEMBER

 ITA No. 1881/DEL/2017 (A.Y. 2013-14)
 (THROUGH VIDEO CONFERENCING)

Sumitomo Corporation
G-195,
Sarita Vihar
New Delhi
AABCS6011P
(APPELLANT)

Vs 

DCIT (International Taxation)
Circle-3(1)(2)
New Delhi
(RESPONDENT)

Appellant by Sh. C. S. Aggarwal, Sr. Adv.,
Sh. Ravi Pratap Mall, Adv
Respondent by Sh. Satpal Gulati, CIT DR

Date of Hearing 21.04.2021
Date of Pronouncement 09.06.2021 

ORDER

PER SUCHITRA KAMBLE, JM

This appeal is filed by the assessee against the order dated 31/1/2017 passed by DCIT, Circle (1)(2), International Taxation, New Delhi u/s 143(3) read with Section 144C (13) of the Income Tax, 1961 for Assessment Year 2013-14.

 2. The grounds of appeal are as under:- Based on the facts and circumstances of the case, the Appellant respectfully submits:

1. That the learned Assessing Officer (Id AO) has erred both on facts and in law, in computing the total income of the Appellant company at Rs. 73,14,22,028/-, against an aggregate total income declared by assessee amounting to Rs. 69,26,60,776/-. The addition made of Rs. 3,81,61,252/- is highly misconceived and the Hon’ble Dispute Resolution Panel (Ld DRP) has also erred in not directing the said sum to be excluded.

2. That the Ld AO/DRP has failed to appreciate that, the Appellant is a tax resident of Japan and is required to be assessed in accordance with the provisions of Double Tax Avoidance Agreement between India and Japan and the Appellant, since had no Permanent Establishment (PE) in India for supply made to Maruti Suzuki India Limited (MSIL) no income could be held to be taxable in India.

2.1 That the Ld AO/DRP has erred in making addition of Rs.2,36,88,712/- in respect of an amount stated to be an income attributable for supplies made by Appellant to MSIL (i.e. the estimated and assumed sum) from Japan. The learned AO, has erred in not appreciating that such income,as has been held to be attributable on the supplies made, since was not attributable to its permanent establishment has been misconceived and the addition so made be thus held as untenable which addition deserves to be deleted.

2.2 That the Ld AO/DRP has erred in holding that the alleged profit of supplies of equipment by the Appellant to MSIL are taxable in India despite the fact that title of equipment had passed in Japan and supplies had also been made in Japan and not in India and thus, no income had accrued to the Appellant in India.

2.3 That the Ld AO/DRP has erred in holding, that the Appellant has a PE in India under Article 5 of the Double Taxation Avoidance Agreement between India and Japan ('DTAA’ or 'treaty’) and such PE was involved in port clearance, local transportation, commissioning and testing of equipment in India. The aforesaid findings are based on no material whatsoever.

2.4 That the Ld AO/DRP has erred in holding, without any basis, that the negotiation and signing of the contract took place in India and thus PE was established without considering the fact that even the contracts were signed outside India and no negotiation took place in India in respect of such offshore supply. 

To know more in details find the attachment file