ORDER 

PER Ms. MADHUMITA ROY - JM:

The appeal at the instance of the assessee is directed against the order dated 29.11.2016 passed by the Commissioner of Income Tax (Appeals) – 58, Mumbai arising out of the order dated 27.11.2006 passed by the ADIT(International Taxation)-2(2), Mumbai under section 271(1)(c) of the Income Tax Act, 1961 (hereinafter referred as to ‘the Act’) for Assessment Year 2001-02.

2. The assessee is a company incorporated in the Netherlands and is an International Dredging Contractor. It is a tax resident of the Netherland and executes contract in India and for this purpose it has established project/site offices in India with the approval of RBI. The assessee has filed its return of income for the A.Y. 2001-02 on 30.10.2001 showing a loss of Rs. 128,033,980/-. While computing the returned loss of the said amount of Rs. 128,033,979/-, the income of Rs. 307,870,463/- received by the assessee in relation to the New Mangalore Port Trust (NMPT) project was reduced on the basis that the said project was completed in F.Y. 1995-96 and accordingly in the absence of any permanent establishment (PE) in relation to the NMPT project in A.Y. 2001-02, the said amount was not