DIRECTOR OF INCOME TAX Vs. INTERNATIONAL TAXATION

JUDGEMENT

(1.) THESE appeals of the assessee were admitted on the following questions of law vide orders dated 25th September, 2008:-

(2.) ON an application preferred by the appellant/ assessee, following additional question of law was framed as substantial question of law, to be addressed at the time of hearing:- Whether a coordinate bench of the tribunal while passing an order can take a contrary view that has been expressed by an earlier coordinate bench in respect of the same assessee where similar issues are involved or should the bench refer it to a larger bench?

(3.) EVEN on the question of permanent establishment on which aspect question of law no. 2 and 4 have been framed, there was no serious contest. As would be noticed later, the only attempt on the part of Mr. Ganesh was to persuade this Court to refer the matter back to the ITAT and decide this issue afresh in the light of the objections filed by the assessee. We may mention that Rolls Royce India Limited (RRIL) is 100% subsidiary set up in India and it is held to be the PE of the assessee. Since this was the submission in the alternative and main focus of attack on the findings of ITAT rested on question of law no.3, we will first deal with that question. Reason is obvious. Mr. Ganesh argued that even if it is so, the payment made by the assessee to RRIL for the services rendered by RRIL on behalf of the assessee constitutes arms length price (ALP) and, therefore, nothing more was to be taxed at the hands of the assessee.