Income Tax Appellate Tribunal Delhi Qualcomm Incorported , Secunderabad vs Assessee IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCHES: "E" NEW DELHI BEFORE SHRI J.SUDHAKAR REDDY, ACCOUNTANT MEMBER AND SHRI CM GARG, JUDICIAL MEMBER ITA Nos: 3696369736983699 and 3700/Del/2009 A.Ys. : 20002001 to 200405 M/s Qualcomm Incorporated vs. ADIT, Circle 2(1) th C/o S.R.Batliboi & Co. 401, 4 floor, International Taxation Ashoka Bhopal Chambers Drum shaped bldg, S.P road, Room No.414 Secunderabad New Delhi (Appellant) (Respondent) Appellant by : Shri S.E.Dastur, Sr.Counsel with S/Shri Nishant Thakkar, , Shri.Rajan Vora , Shri.Jayesh Sanghvi, Shri Naveen Agarwal, Ms.Divya Santhanam &Shri. Manoneet Dalal Respondent by : Shri G.C. Srivastava, Spl.Counsel with Ms.Preeti Bhardwaj & Shri.Sourabh Srivastava ORDER PER J.SUDHAKAR REDDY, ACCOUNTANT MEMBER All these five appeals are filed by M/s.Qualcomm Incorporated and are directed against a common order passed by the CIT(A)XXIX, New Delhi dt. 26062009 for the A.Y. 20002001 to A.Y. 20042005. All these appeals arise from the assessments framed by the Assessing Officer ('AO') under section 143(3) read with section 147 of the Income tax Act 1961('the Act'). Since the issues in all these appeals have arisen from common facts and circumstances, the appeals were heard together and are being disposed of by this consolidated order for the sake of convenience. 2 2. The Appellant has raised various common grounds. The grounds of appeals are many and pertain to different limbs and contentions in support of Five main issues that require our adjudication. These issues that arise in the present appeals are summarized as under: a) Whether on the facts and circumstances of the case, the ld. CIT(A) was justified in upholding the validity of reassessment proceedings initiated under S. 148/ 147 of the Act; b) Whether on the facts and circumstances of the case, the CIT(A) was justified in exercising jurisdiction under section 251 of the Act to enhance the income of the Appellant in respect of royalty income earned by the Appellant from the OEMs on network equipment; and c) Whether on the facts and circumstances of the case, the CIT(A) was justified in upholding the taxability of royalty income earned by Qualcomm Incorporated, from the Original Equipment Manufacturers ('OEMs') of CDMA mobile handsets and network equipment, who are located outside India, under S. 9(1)(vi) (c) of the Income Tax Act; d) Whether on the facts and circumstances of the case, the CIT(A) was justified in upholding the taxability of royalty income earned by Qualcomm Incorporated, from the Original Equipment Manufacturers ('OEMs) of mobile handsets and network equipment, who are located outside India, under Article 12(7)(b) of the India USA tax treaty ('DTAA'); e) Whether on facts and circumstances of the case, the CIT(A) was justified in confirming the levy of interest under section 234A & B 3 of the Act. We will address the above issues in seriatim. 3. We extract the following additional detailed grounds raised by the Appellant as we feel the same is necessary for the sake of completeness. "That the CIT (A) was factually wrong in holding that, a) The Indian Carriers constitute a source of income for the OEMs in India; b) The source of revenue derived by the Appellant is from utilization /exploitation of the patents by users in India, completely disregarding the fact that licensing transaction between the Appellant and the OEMs is completely independent of the supply transaction between the OEMs and the Indian telecom operators; c) the real intent of licensing the patented technology to the OEMs is to make available the products to Indian Carriers for commercially exploiting the CDMA technology in India; d) the OEMs customize the products for use in India based on the specific orders placed by the Indian Carriers on the OEMs to manufacture products that are compatible to the CDMA network in India, and the products manufactured by the OEMs for sale to Indian Carriers cannot be sold / used in any other geography outside India; e) the Appellant provides techn