Income Tax Appellate Tribunal Delhi Ddit, New Delhi vs M/S. Nortel Networks India ... on 26 September, 2017 IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH 'E' NEW DELHI BEFORE SH. N.K.SAINI, ACCOUNTANT MEMBER AND SH.K.N.CHARRY, JUDICIAL MEMBER ITA Nos. 3313 to 3315/Del/2012 (ASSESSMENT YEARs: 200607 to 200708, 200910 ) Nortal Networks India vs ADIT, International Inc., Circle2(1), C/oM/s SRBC & Associates, International Taxation, Golf View Corporate TowerB, New Delhi. Sector42, Sector Road, Gurgaon122002. PANAACCN2995E (Appellant) (Respondent) ITA No. 1087/Del/2014 (ASSESSMENT YEAR: 201011 ) Nortal Networks India vs DDIT, International Inc., Circle2(1), C/oM/s SRBC & Associates, New Delhi. Golf View Corporate TowerB, Sector42, Sector Road, Gurgaon122002. PANAACCN2995E (Appellant) (Respondent) C.O.Nos.21 to 23/Del/2017 (In ITA Nos. 3313 to 3315/Del/2012) (ASSESSMENT YEARs: 200607 to 200708, 200910 ) ADIT, vs Nortal Networks India International Inc., Circle2(1), C/oM/s SRBC & Associates, International Golf View Corporate TowerB, Sector42, Taxation, Sector Road, Gurgaon122002. New Delhi. PANAACCN2995E (Appellant) (Respondent) C.O.No.24/Del/2017 (In ITA No. 1087/Del/2014) (ASSESSMENT YEAR: 201011 ) DDIT, vs Nortal Networks India International Inc., Circle2(1), C/oM/s SRBC & Associates, New Delhi. Golf View Corporate TowerB, Sector42, Sector Road, Gurgaon122002. PANAACCN2995E (Appellant) (Respondent) ITA Nos. 3313 to 3315/Del/2012 & 1087/Del/2014 C.O.Nos.21 to 24/Del/2017 Appellant by Sh. Deepak Chopra, Adv. & Ms. Manasvini Bajpai, Adv. Respondent by Sh. T.M.Shiv Kumar, CIT DR Date of Hearing 07.09.2017 Date of Pronouncement 26.09.2017 ORDER PER BENCH Assessee filed ITA Nos.3313 to 3315/Del/2012 & 1087/Del/2014 whereas the revenue filed C.Os Nos.21 to 24/Del/2017 challenging the orders of the Ld.CIT(A) confirming the orders of the Ld.AO in respect of AYs 200607 to 201011, the respectively. This batch of matters involve common facts and raise common questions of fact and law, and hence for the sake of convenience the same are being addressed together and disposed of by way of this common order. 2. Briefly stated facts relevant for the disposal of this matter are that the assessee is a company incorporated on 07.06.2002 under the name and style of Nortel Networks India International Inc. (NNIII) under the laws applicable in the State of Delware, USA and is a tax resident of USA. Assessee is engaged in the business of supplying advanced networking/telecom equipment to customers in Asia Pacific region. The assessee is a stepdown subsidiary of Nortel Networks Ltd. Canada, and is wholly held by Nortel Network Inc. which in turn also has an indirect subsidiary in India, namely, Page | 2 ITA Nos. 3313 to 3315/Del/2012 & 1087/Del/2014 C.O.Nos.21 to 24/Del/2017 Nortel Networks India Pvt. Ltd. (Nortel India). Nortel LO is the Liaison Office of Nortel Canada in India. In the relevant year under consideration, Reliance required an Indian company to bid for contract for supply of optical hardware and provision of related installation and commissioning services, and Nortel India had entered into such a contract with Reliance. While retaining the Optical services contract remained with them, Nortel India subsequently assigned all its rights, entitlements, covenants and obligations under the Optical hardware supply contract to NNIII under the Assignment and assumption contract, for the performance of which, Nortel Canada provided guarantee. Equipment supplied to Reliance was sourced from Nortel Canada and Nortel Ireland i.e, manufactured by Nortel Canada and Nortel Ireland, and under the Agreement, Reliance placed orders directly on the assessee, and also made all the payments for equipment supplied directly to the assessee. 3. Original assessment in respect of the AY 200607 and 2007 08 was complete, however, placing reliance upon the earlier years proceedings the matters were reopened the assessments in respect