Assessing Officer raising a new plea that Indian subsidiary constituted not only service PE but also fixed place PE of assessee in India

IT/ILT : Where revenue did not challenge Tribunal's finding that Indian subsidiary of assessee-company only constituted its service PE in India in first round of litigation, it could not challenge consequential assessment order passed by Assessing Officer raising a new plea that Indian subsidiary constituted not only service PE but also fixed place PE of assessee in India
IT/ILT: Where a foreign enterprise carries on business in India, it is only that much of profits can be included in taxable income of foreign enterprise which are attributable to business carried on by it in India through its permanent establishment
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[2014] 48 taxmann.com 373 (Delhi - Trib.)
IN THE ITAT DELHI BENCH 'D'
ADIT, Circle 1 (1), International Taxation, New Delhi
v.
Lucent Technologies International Inc.*
R.S. SYAL, ACCOUNTANT MEMBER
AND C.M. GARG, JUDICIAL MEMBER
IT APPEAL NO. 211 (DELHI) OF 2012
[ASSESSMENT YEAR 1997-98]
JULY  4, 2014
Section 9, of the Income-tax Act, 1961, read with article 5 of DTAA between India and USA - Income - Deemed to accrue or arise in India (Permanent Establishment) - Assessment year 1997-98 - Assessee, a US based company, was a leading supplier of hardware and software products for GSM Cellular Radio Telephone System - Assessee entered into contract with Escotel Ltd. for GSM Cellular services in India - Subsidiary of assessee-company in India namely LTIL also entered into contract with Escotel for commissioning, installation and operation of said turnkey project - Assessee sent its employees for helping LTIL in completing its job, who remained in India for more than 90 days in relevant financial year - Tribunal held that LTIL constituted assessee's service PE in India - Thus, in remand proceedings, Assessing Officer held that assessee's income attributed to service PE was taxable in India - Revenue filed instant appeal contending that LDIL not only constituted service PE but also fixed place PE of assessee in India - Whether since revenue did not raise aforesaid plea against Tribunal's order in first round of litigation, same deserved to be rejected - Held, yes [Para 8] [In favour of assessee]
Section 9, of the Income-tax Act, 1961, read with articles 5 and 7 of DTAA between India and USA - Income - Deemed to accrue or arise in India (Permanent Establishment) - Assessment year 1997-98 - Whether where a foreign enterprise carries on business in India, it is only that much of profits can be included in taxable income of foreign enterprise which are attributable to business carried on by it in India through its permanent establishment - Held, yes [Para 11]