Regen Renewable Energy Generation Global Limited Vs ACIT (ITAT Chennai)
ITAT Chennai restored the matter back to the file of AO for re-adjudication as additional ground raised by the assessee in appeal were not taken up before lower authorities.
Facts- The assesse is a non-resident company incorporated, and fiscally domiciled, in Cyprus. AO noted that the assessee simply acted as an intermediary instead of RPPL who was ultimate beneficiary of such licensing agreement. Accordingly, the assessee was not the beneficial owner of royalties and therefore, the same was to be taxed in contracting state i.e., in India according to prevailing income tax rates. Accordingly, the treaty benefit would not be available to the assessee. Finally, applying tax rate of 25%, draft assessment order was passed.
Notably, final assessment order was passed by AO on 07-07-2022 wherein total income was brought to tax @25%. Similar assessment was framed for AY 2015-16. Being aggrieved, the present appeal is filed.
Conclusion- Held that the assessee has filed additional grounds of appeal also. These grounds were not taken up before lower authorities and there is no adjudication on these points. Considering the entire facts and circumstances of the case, we aside the order of lower authorities, in both the years, and restore the matter back to the file of Ld. AO for re-adjudication on merits with a direction to the assessee to substantiate its case. The Ld. AO may re-examine the grounds on merits viz. whether the assessee could be considered as beneficial owner of the royalty in its own right as well as alternative argument that the rate as specified in India-Germany DTAA was lower than the offered rate.
