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Judgment
PER VIKAS AWASTHY, JUDICIAL MEMBER:
This appeal by the assessee is directed against the assessment order passed u/s.143(3) r.w.s. 144C(13) of (hereinafter referred to as ‘the Act’) dated 28.01.2025, for assessment year 2022-23.
The assessee in appeal has assailed the assessment order primarily on three issues:-
Against findings of the Assessing Officer (AO) in holding that the assessee has a Supervisory Permanent Establishment (PE) in India;
Profits arising from offshore supplies made by the assessee to Delhi Metro Rail Corporation Ltd. (DMRC) and Bombardier Transportation India Ltd. (BTIN) are taxable in India; and
Receipts on account of ‘engineering services’ from BTIN are in the nature of royalty.
The facts of the case in brief as emanating from records are: The assessee is a tax resident of Thailand. The assessee is engaged in the business of design, installation, operation and maintenance services of transport systems. The assessee filed its return of income for the impugned assessment year declaring total income as NIL and claimed refund of Rs.31,03,120/-. The case of the assessee is that it has no PE in India. The assessee made offshore supplies to DMRC as per contract CS03. The assessee also made offshore supply of raw material and components to BTIN which were unrelated to contract CS03. Since title in the goods transferred outside India, the receipts from offshore supplies are not taxable in India. The AO, after examining the documents, agreements, etc., held that the profits arising from offshore supplies made by the assessee to DMRC and BTIN are taxable in India. The AO further held that the receipts from engineering services are in the nature of royalty. Against the draft assessment order dated 29.03.2024, the assessee filed objections before the Dispute Resolution Panel (DRP). The DRP notes that on the issues in dispute i.e. receipts from off shore supplies and engineering services, the Tribunal has given order in favour of the assessee in AY 2016-17, 2018-19 and 2019-20. The DRP finally observes, ‘In this regard in the DAO, the AO has stated that the Revenue has not accepted the decision of Hon’ble ITAT. Further, the Panel for the AY under consideration is of the view that the need of the next line of action is that the office of the AO must verify the assessee’s claim in terms of acceptance or otherwise of the higher appellate bodies impugned orders and to complete the assessment keeping in view the department’s stand on acceptance of the higher appellate bodies impugned orders or preferring the litigation against higher appellate bodies impugned orders.’ The AO made addition in respect of both the issues. Hence, the present appeal by the assessee.
Shri Kamal Sawhney, appearing on behalf of the assessee submits that the issues relating to taxation of receipts of offshore supplies and holding receipts with respect to ‘engineering services’ as royalty are covered in favour of the assessee by common order of the Tribunal in ITA No. 726/Del/2023 for AY 2016-17, ITA No.2192 & 2193/Del/2022 for AY 2018-19 & 2019-20 decided on 31.08.2023. Subsequently, in A.Y. 2020-21, similar additions were made by the AO. The Coordinate Bench of the Tribunal in ITA No. 1930/Del/2023 for A.Y. 2020-21, decided on 30.10.2023, followed earlier order of Tribunal in ITA No. 726/Del/2023 (supra) and decided the issue in favour of the assessee. The facts in the impugned assessment year are identical. Therefore, the additions made by the AO are liable to be deleted and appeal of the assessee be allowed for parity of reasons.
Shri M.S. Nethrapal, representing the Department vehemently supported the impugned assessment order. However, he fairly stated that in the preceding assessment years these issues have been decided by the Tribunal in the assessee’s own case. Referring to the decision of Chennai Bench of the Tribunal in the case of DCIT vs. TVS Electronics Ltd. 22 taxmann.com 215 (Chennai) he contend that where the provisions of the Double Taxation Avoidance Agreement (DTAA) are silent, the provisions of the Act would apply. In the present case since India-Thailand DTAA is silent on FTS clause, therefore, receipts are taxable as FTS under section 9(1)(vii) of the Act.
Rebutting submissions of the ld. DR, ld. Counsel for the assessee submits that the Hon’ble Madras High Court in the case of Bangkok Glass Industry Company Ltd. vs. Asst. CIT (supra) has reversed the ratio of Tribunal order in the case of DCIT vs. TVS Electronics Ltd. (supra). He further referred to decision of Coordinate Bench of the Tribunal in the case of DCIT vs. Campus Eai India P. Ltd. in ITA No. 355/Del/2021 for AY 2017-18 decided on 20.10.2023 to strengthen his submissions.
Both sides heard, orders of the lower authorities examined. The primary issue in the instant appeal is with respect to taxability of offshore supplies in India and receipts from engineering services being held as royalty. The Coordinate Bench, while adjudicating identical issues in assessee’s own case for A.Y. 2016-17 in ITA No. 726/Del/2023 (supra), examined treatment given to the receipts in preceding assessment years and held as under:-
“9.It is noticed from the assessment orders for the assessment years 2013-14, 2014-15, 2015-16 and assessment year 2017-18 that this issue of as to whether the off shore supplies of equipment and providing engineering services qualify to tax with reference to the DTAA with Thailand has also been examined in the proceedings under section 143(3) r.w.s. 144C of the Act and the Assessing Officer accepted that these incomes are not liable to tax. The relevant observations of the Assessing Officer in these assessment years are as under:-
Assessment Year : 2013-14 :
“M/s Bombardier Transportation Signal (Thailand) Ltd. (hereinafter referred to as "assessee") e-filed its return of income on 29.11.2013 declaring total income of Rs.5,62,36,850/The assessee filed a revised return on 31.03.2015 declaring Nil income. The case was selected for scrutiny under CASS and a notice u/s 143(2) of the Income Tax Act1961 ("the Act") was issued to the assessee on 31.08.2015Further, a notice u/s 142(1) of the Act along with detailed questionnaire was issued to the assessee on 20.10.2015In response to various notices, ShArvind Rajan and Ms. Chinu Bhasin CAs, authorized representatives of the assessee attended the assessment proceedings from time to time and filed necessary information and details. Written submissions and documents were considered. The case was discussed with the authorised representatives of the assessee.
2.The assessee company is registered and incorporated under the laws of Thailand and engaged in the business of manufacturing and supply of train signaling systems. Assessee's receipts from services provided by it in India and its taxability was examined in the light of provisions of the Act and IndiaThailand DTAA. After considering replies and documents filed by the assessee its income as shown in the revised return of income is accepted.
3.Assessment is, accordingly made on Nil income. Credit for prepaid taxes is allowed after due verification. Detail of computation of tax and interest charged as provisions of law is given in the enclosed ITNS-150 which is part of this order. Issue necessary forms.”
Assessment Year : 2014-15 :
“M/s Bombardier Transportation Signal (Thailand) Ltd. (hereinafter referred to as the assessee') e-filed its return of income on 28.11.2014 declaring Nil income. The case was selected for scrutiny under CASS and a notice u/s 143(2) of the Income Tax Act, 1961 ("the Act") was issued to the assessee on 31.08.2015. Further, a notice u/s 142(1) of the Act along with detailed questionnaire was issued to the assessee on 08.04.2016. In response to various notices, Sh. Aditya Gupta and Ms. Chinu Bhasin, CAs, authorized representatives of the assessee attended the assessment proceedings from time to time and filed necessary information and details. Written submissions and documents were considered. The case was discussed with the authorised representatives of the assessee.
2.The assessee company is registered and Incorporated under the laws of Thailand and engaged in the business of manufacturing and supply of train signaling systems. During the year assessee has provided engineering related services to M/s Bombardier Transportation India Limited (BTIN). Assessee's receipts from services provided by it in India and its taxability is examined in the light of provisions of the Act and India-Thalland DTAA. After considering replies and documents filed by the assessee, its income as shown in the return of income is accepted.
3.Assessment is, accordingly, made on Nil Income. Credit for prepaid taxes is allowed after due verification. Detail of computation of tax and interest charged as provisions of law is given In the enclosed ITNS-150 which is part of this order. Issue necessary forms.”
Assessment Year : 2015-16 :
“M/s Bombardier Transportation Signal (Thailand) Ltd. (hereinafter referred to as the assessee and BT-Thailand') e-filed its return of income on 29.11.2015 declaring Nil income. The case was selected for scrutiny under CASS and a notice u/s 143(2) of the Income Tax Act, 1961 ("the Act") was issued to the assessee on 04.04.2016. Further a notice u/s 142(1) of the Act along with detailed questionnaire was issued to the assessee on 01.07.2016In response to various notices. Sh. Aditya Gupta and Ms. Chinu Bhasin, CAs, Authorized Representatives of the assessee attended the assessment proceedings from time to time and filed necessary information and details. Written submissions and documents are considered. The case was discussed with the authorised representatives of the assessee.
2.The assessee company is registered and incorporated under the laws of Thailand and engaged in the business of manufacturing and supply of train signaling systems. The assessee had entered into an agreement namely CS03" with Delhi Metro Rail Corporation (DMRC) wherein BT-Thailand along with the other members of the consortium would design manufacture, supply, install, test and commission train control & signaling system. During the year under consideration, BTThailand made offshore supplies to DMRC. The transfer of ownership/title to DMRC in respect of all supply transaction has taken place outside India. Accordingly, the income accruing by virtue of these offshore supply transactions is not taxable in India. After considering replies and documents filed by the assessee, its income as shown in the return of income is accepted.”
Assessment Year : 2017-18 :
M/s Bombardier Transportation Signal (Thailand) Ltd (hereinafter referred to as "assessee") has e-filed its return of income for Assessment Year 2017-18 on 29.11.2017 declaring total income of Nil. The case was selected for scrutiny under CASS. The scrutiny CASS selection reason is- High ratio of refund to TDS relating to section 195A notice u/s 143(2) of the Income Tax Act, 1961 ("the Act") was issued on 27.08.2018 to the assessee. Further a notice u/s 142(1) of the Act along with detailed questionnaire was issued to the assessee electronically on 12.04.2019In response to reminder notice issued was 22.05.2019. In response to various notices issued through the assessment module of ITBA/otherwise, compliances/submissions were made by the assessee electronically / manually. The submissions and documents made by the assessee electronically/manually were examined.
2.The assessee is registered and incorporated under the laws of Thailand with its head office located at 3354/16-19, 6th floor, Manorom Building Rama 4 Road, Klonton Klongtoey Bangkok, Thailand. It is a subsidiary of Bombardier Transportation Holdings (Thailand) Ltd. The assessee is a tax resident of Thailand as contemplated under Article 4 of the India-Thailand Tax treaty. The assessee had entered into an agreement namely "CS03" with Delhi Metro Rail Corporation (DMRC) wherein BTThailand along with the other member of the consortium would design, manufacture supply etc train control & signaling system. During the year under consideration assessee received payment from DMRC towards offshore supplies and offshore services incidental and inextricably linked to these supplies. Further during the year under consideration assessee had provided engineering services to Bombardier Transportation India Pvt. Ltd. (BTIN).
3.Correctness of assessee's income from various sources is verified in respect of DTAA provisions of India Thailand during the assessment proceedings. After considering the facts and circumstances of the case assessee's income as shown in the return is accepted.
4.Assessment is accordingly made at NIL income. Detailed computation of tax and interest charged as per provision of law is given in the enclosed ITNS-150 which is part of this order. Necessary forms are issued.”
10.Therefore, it is noticed that while completing assessment of the assessee for the assessment years 2013-14 to 2015-16 and also for the immediately succeeding assessment year to the assessment year under consideration i.e. 2017-18 the Assessing Officer thoroughly examined the taxability of the income received by the assessee on off shore supplies made to DMRC and the engineering services provided to BTIN with reference to the DTAA between India and Thailand and the conclusion was drawn by the Assessing Officer that these incomes are not taxable. This consistent approach was departed by the Revenue for the assessment years 2016-17, 2018-19 and 2019-20 for one reason or the other, which, in our view, is not justified. The ratio of the decision of the Hon’ble Supreme Court in the case of Radhasoami Satsang Vs. CIT (supra) wherein the apex court rejected the plea of the Revenue that res judicata does not apply to tax matters and held that where the facts are identical there is no change in law, the judicial authorities are bound by the decision of the previous year applies to the present case. Therefore, on this ground alone we direct the Assessing Officer to delete the addition made towards off shore supplies and also for providing engineering services accepting the stand of the assessee that they are not taxable under DTAA between India and Thailand.
11.Even on merits the case of the appellant is covered by the decision of the Tribunal in assessee’s group company, namely, Bombardier Transportation Sweden AB Vs. DCIT [(2021)125 taxmann.com 277] wherein the Delhi Tribunal held as under:-
“27.Ground Nos. 7 to 15 relate to existence of Permanent Establishment [PE].
28.This grievance relates to the fact that the DRP has enhanced the income of the appellant on account of PE in India.
29.Facts on record show that during the proceedings before the DRP, the DRP examined clauses from the agreement with DMRC as well as Consortium Agreement between the Appellant and BTIN and observed that the appellant has PE in India in the form of BTIN. Having held that BTIN is the PE of the appellant in India, the DRP attributed 11 the income earned by the appellant from offshore supply of goods and equipment to the PE on gross basis.
30.Before us, the ld. counsel for the assessee vehemently stated that the DRP has grossly erred in not appreciating the fact that the supplies made under BS-02 Agreement were offshore supplies and the same were not taxable in India. It is the say of the learned counsel for the assessee that the DRP has further erred in observing that the contract between DMRC and Consortium consisting of the appellant and BTIN is interlinked, intervened and indivisible.
31.The learned counsel for the assessee further pointed out that for holding BTIN as PE in India, the DRP concluded that the PE was instrumental since the stage of bidding, negotiations, signing of contract, preparation of designs and plans, management, delivery of train signalling systems and final delivery to DMRC and the warranty of equipment etc.
32.The learned counsel vehemently stated that the entire findings of the DRP are based upon incorrect facts, in as much as, the DRP has considered Rs.-02 contract whereas the correct contract was BS-02 12 which was design, manufacture, supply, installation testing and commission of train control and signalling systems. The learned counsel for the assessee concluded by stating that the disposal test has not been satisfied as no place of disposal was available to the appellant in India and for this proposition, reliance was placed on the decision of the Hon'ble Supreme Court in the case of Formula One World Championship Ltd 80 Taxmann.com 347.
33.Per contra, the ld. DR strongly supported the findings of the DRP. It is the say of the ld. DR that since it is composite contract, therefore, there has to be attribution. The ld. DR pointed out that as per the contract, liability was fastened jointly and severally and the same profit has to be attributed for supply made to India by the appellant.
34.Referring to the findings of the DRP at Pages 18 & 19 of its order, the ld. DR pointed out that the seconded employee of Bombardier Transportation Sweden who has been seconded to Bombardier India and is overall responsible for entire delivery including mechanical and electrical equipment and commissioning of the train and ensuring BT standard in all testing activities prior delivery of train in connection 13 with the contract with DMRC. The ld. DR rested his submissions on the following findings of the DRP:
“1.There is a Expat employee who is being paid a very high salary of Rs.7,35,26,751. This shows that his job is of paramount importance for the contract with DMRC and his job responsibilities as defined in the appointment letter include coordination with DMRC engineers for completion of contract.
2.He has overall technical responsibility for the entire scope of delivery including electrical and mechanical equipments.
3.He is also required to provide Technical support during train commissioning in New Delhi, ensure BT standards in all testing activities prior to the delivery of the trains to the customer.
4.The contractor is responsible for shipment of goods to India.
5.The contractor is responsible for all legal requirements, duties,- dues, taxes, and other such requirements and expenditure required for the importation of the works, the equipment, spare parts and other items to be supplied under the contract into Delhi.
6.The contractor shall clear the works, the equipment, the spare parts and other items to be supplied under the contract through Delhi customs/India sea port in accordance with all Government of India enactments.
7.Further, as per the terms and conditions of the contract, the contractor is responsible for inland transportation in India, delivery and testing in the depot of all offshore equipment
8.Thus, the responsibility of BT Sweden is to transport all off shore equipment in India up to the site of DMRC in Delhi and there after carry out the entire testing of the equipment in the depot of DMRC.
9.The cost enters show that the entire activities from preliminary planning till transfer, of technology is an integrated activity. 10. The role of BT1N in overall functioning and execution of the contract from bidding to supplies and post supply activities is definitely significant for the BT Sweden. 11. The activities relating to delivery of offshore manufacture equipment at the nominated sites and there after testing and commissioning are activities which are completed with active and coherent participation by BT Sweden and BTIN and utilization of the premises of BTIN by BT Sweden
12.For the same contract in respect of RS2 project there-is a project office existing in India.
13.The cases of Ishikawajima and Hyundai heavy industries are not applicable as the contract in the Case of the assessee is a composite indivisible contract.
14.As per the terms and conditions of the contract, it is clear that the assessee is working with DMRC on a composite contract.”
35.We have given thoughtful consideration to the rival contentions and have carefully perused the relevant documentary evidences brought on record in the form of Paper Book in light of Rule 18(6) of ITAT Rules. The undisputed fact is that the supplies made under the BS-02 agreement were off shore supplies. The Hon'ble Supreme Court in the case of Ishikawajima HarimaHeavy Industries Ltd 158 Taxman 259 has categorically held that only such part of the income as is attributable to the operations carried out in India can be taxed in India. Same view was taken by the Hon'ble High Court of Delhi in the case of Nortel Networks India International Inc & Ors 386 ITR 0353.
36.We have also considered the agreement between the appellant and BTIN. We find that as per this MOU, scope of work between eh appellant and BTIN are clearly bifurcated. The relevant part reads as under:
“WHEREAS BT Sweden, BT India and their subsidiaries/affiliates as a fully integrated group are desirous and possess full capability to effectively execute the Project. WHEREAS in view of the prescribed 'eligibility criteria as detailed in Clause A 5.2 (b) of Instructions to Tenderers('ITT) of DMRC Tender BS02 document, BTSweden has been selected as the Lead Member for the above Project ofDMRC and BT India has been designated to act as the local Indiah member of the consortium -
•Now MoU will cover the following:
Purpose/ Area of the MoU
1.1The purpose, of the MoU (hereinafter referred to as the 'Purpose') Is to provide as follows:
» BT Sweden willgetas the Lead Member.
•BT India will ptiis a local Indian member
•Broadly identify parts of the Project to be undertaken by BT Sweden as the lead member under the Eligibility Criteria and those to be undertaken by BT India as local Indian member.
2.Scope of work of BT Sweden and BT India. The respective parts of Project to be undertaken by BT Sweden and BT India are as follows: 17 Parts of Scope to be undertaken by BT Sweden.
2.1BT Sweden will be responsible for the 'off-shore' portion of the contract*
2.2BT Sweden will supply;
•Automatic Train Protection (‘ATP")/(ATO) o Computer Based Interlocking
•Parts of Coded Audio Frequency Track Circuits «Parts of Automatic Train Supervision ('ATS')
•Main Line Point machines etc.
2.3BT Sweden will undertake offshore training. Parts of Scope to be undertaken by BT India ,
2.4BT India shall be responsible for all'on-shore activities.
2.5BT India will procure and supply other equipment available locally such as Cables, ATS work stations, servers, Mimic Panel, LEO Signals, Depot Point Machines, Audio Frequency Track Circuits for depot, Parts of coded Audio Frequency Track Circuits, wayside hardware directly to DMRC.
2.6BT India will provide major local support for application/ adaptation for Signaling & Train Control System.
2.7BT India will be responsible for installation, testing and commissioning under the guidance/ instruction of BT Sweden.
2.8BT India will arrange for Incidental services like Insurance, local & overseas transportation, clearance at port, unloading at port, unloading at DMRC, salting up a local site office in Delhi.
2.9BT India will manage project sites, Warranty /Maintenance service sites in Delhi.
2.10BT India will be responsible for providing onshore Training to the officials of DMRC.
2.11The percentage participation of BT Sweden is 50% and the percentage participation of BT India is 50%.
2.12Irrespective of the joint and several liability towards DMRC for any default by any party, the party not responsible for the respective default will have the right to be indemnified by the other party,
3. Co-operation Principles . –
3.1It is clarified that the proposed arrangements between ~_ scope shall be on 'principal to principal' basis.
3.2The co-operation defined in this MoU is on an exclusive basis and shall be subject to BT internal policies and guidelines.
3.3In the event of contract, this MoU will be further elaborated for detailed clarity of scope split In meeting the overall project requirement
3.4
3.5The detailed interfaces and scope of supply & services is defined after taking into consideration each entities’ experience ond capabilities while considering the requirement of the tender document of DMRC and in particular the need to involve suitable local partners.
14.The date of letter of acceptance is 17-09-2007 while the MoU is dated 11-10-2007. Thus, the MoU between B T Sweden and BUN has been signed after the contract has been accepted.
37.As mentioned elsewhere, the appellant does not have any place of business in India and all business activities with respect to offshore supplies are carried outside India. The equipment supply has been manufactured at overseas manufacturing facility of the appellant and sale of equipment has occurred outside India and payment has also been received by the appellant and outside India.
38.We find that during the DRP proceedings, the DRP was misdirected in considering the contract RS 02. This contract is between BTIN Bombardier Transportation, Germany and DMRC and for this contract, Bombardier Transportation Germany has raised invoices on BTIN for offshore manufacture and supply of equipment whereas the 20 contract under consideration is between DMRC and Consortium the appellant and BTIN towards offshore supply train control and signalling equipment.
39.We further find another error in the findings of the DRP wherein it has considered Conny Linusson a seconded employee of Bombardier Sweden. The error is that the said seconded employee was for Rs. 02 contract and not BS 02 contract, which is under consideration. We have also gone through the agreement between BTIN and Conny Linusson which fortifies the fact that Conny Linusson for Rs. 02 contract with DMRC.
40.In our considered opinion, the entire findings of the DRP are based on erroneous appreciation of wrong facts and on such erroneous appreciation of wrong facts, the DRP held that BTIN is the PE of the appellant in India without appreciating the true facts that the appellant has no place of disposal in India in the office of BTIN from where the appellant could have conducted its business in India.”
12.The decision squarely applies to the assessee’s case. Thus, even on merits the addition made towards off shore supplies is liable to be deleted.
13.The facts are similar/identical for the assessment years 2018-19 and 2019-20. Therefore, the decision taken for the assessment year 2016-17 applies to mutatis mutandis for these two assessment years also. We order accordingly.”
[Emphasized by us]
Thus, it emerges from order of the Coordinate Bench that the AO has been consistently inconsistent in taxing receipts of the assessee qua off shore supplies of equipment and provision of engineering services. On identical set of facts, the AO in AY 2013-14, 2014-15, 2015-16 and 2017-18 accepted the return of income in assessments made u/s.143(2) of the Act. The assessee has been uniformly claiming that receipts of off shore supply of equipment and receipts for provision of engineering services are not taxable in India. In AY 2016-17, 2018-19, 2019-20 and 2020-21, the AO made addition in respect of off shore supplies as well as provisos of engineering services. In appeal by the assessee, the Tribunal deleted the addition in AY 2016-17, 2018-19 and 2019-20 vide common order dated 31.08.2023, for the appeal for AY 2020-21, the Tribunal deleted the addition vide order dated 30.10.2023. No material has been placed on record to show that the Department has filed appeal against aforesaid order of the Tribunal before the Hon’ble High Court. In absence of any evidence to show that appeal has been filed against Tribunal order, the presumption would be that the Department has accepted the order of Tribunal. Further, no material has been placed on record to show that there is any distinguishing feature in facts in the impugned assessment year. Therefore, we find no reason to take a different view in the impugned assessment year. Respectfully following above mentioned decisions of the Coordinate Bench on identical set of facts, ground Nos. 2 and 3 of appeal are allowed for parity of reasons.
The ld. DR has placed reliance on the decision rendered in the case of DCIT vs. TVS Electronics Ltd.(supra) to contend that where DTAA does not specifically provide for FTS such payment does not automatically become business income and has to be tested in light of provisions of the Act. The ld. Counsel for the assessee to counter the submissions of DR placed reliance on the decision of Coordinate Bench in the case DCIT vs. Campus Eai India P. Ltd. (supra). The Co-ordinate Bench in the said case has held that the ratio laid down in the case of DCIT vs. TVS Electronics Ltd.(supra) has been overturned by Hon’ble Madras High Court in the case of Bangkok Glass Industry Company Ltd. vs. Asst. CIT (supra).
Thus, in light of the facts of case and the decisions discussed above, we find merit in ground no. 3 of appeal. Ergo, the same is accepted.
In ground no. 4 of appeal, the assessee has assailed initiation of penalty proceedings u/s.270A of the Act. Challenge to penalty proceedings at this stage is premature. Hence, ground no. 4 of appeal is dismissed.
In ground no. 5 of appeal, the assessee has alleged that receipts from engineering services amounting to INR 22,72,96,164/- have been considered twice while computing taxability in the final assessment order. Since, the issue has been decided in favour of the assessee, ground no. 5 has become infructuous.
In ground no. 6 of appeal, the assessee has assailed levy of interest u/s.234B of the Act. Charging of interest u/s.234B of the Act is mandatory and consequential. Hence, ground no. 6 of appeal is dismissed.
In the result, appeal of the assessee is partly allowed.