IN THE INCOME TAX APPELLATE TRIBUNAL “I” BENCH, MUMBAI BEFORE SHRI PAWAN SINGH, JUDICIAL MEMBER AND SHRI GIRISH AGRAWAL, ACCOUNTANT MEMBER ITA No. 1817/MUM/2025 (AY: 2022-23)

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Order under section 254(1) of Income Tax Act PER PAWAN SINGH, JUDICIAL MEMBER:

1. This appeal by assessee is directed against the final assessment order dated

14.01.2025 passed under section 143(3) r.w.s. 144C(13) passed in pursuance of direction of ld Dispute Resolution Penal (DRP) dated 18.12.024 for A.Y.

2022-23. The assessee in its appeal has raised following grounds of appeal:

“1. On the facts and in the circumstances of the case, and in law, the notice issued under section 143(2) of the Act, dated 31 May 2023, by the Assistant / Deputy Commissioner of Income-tax, 1(1)(1), Delhi, to initiate assessment proceedings for AY 2022-23, is without jurisdiction in terms of the Central Board of Direct Taxes order (No. F. No. 187/3/2020-ITA-I) dated 31 March 2021, and thus the assessment order passed by the learned AO is bad in law, since the same is without jurisdiction.

2. Without prejudice to ground no. 1 above, the learned AO has on the facts and in the circumstances of the case, and in law, and based on the directions of the learned DRP, erred in holding that the Indian Branch of General Reinsurance AG ('GRAG India Branch') constitutes a business connection in India for the Appellant as per the provisions of section 9(1)(1) of the Act.

3. Without prejudice to ground no. 1 above, the learned AO has, on the facts and in the circumstances of the case, and in law, and based on the directions of the learned DRP, erred in concluding that the Indian Branch of General Reinsurance AG (GRAG India Branch') is a Dependent Agent Permanent Establishment ('DAPE') of the Appellant in India as per Article 5(4) of the India- United States of America tax treaty ("Tax Treaty'). In doing so, learned AO has completely disregarded the fact that the key element of agency i.e., principal- agent relationship is missing as GRAG India Branch is not; representing or acting on behalf of the Applicant when it is dealing with Indian cedants.

4. Without prejudice to ground nos. 1 and 3 above, the learned AO has on the facts and in the circumstances of the case, and in law, and based on the directions of the learned DRP, erred in concluding that the retrocession premium earned by the Appellant is taxable in India under Article 7 of the Tax Treaty being income attributable to the operations of the Appellant carried on through/

by its PE in India (i.e., GRAG India Branch).

5. Without prejudice to ground nos. 1 to 4 above, the learned AO has on the facts and in the circumstances of the case, and in laws and based on the directions of the learned DRP, erred in estimating 10 per cent of the gross receipts of the Appellant astaxable profits by applying Rule 10 of the Income-tax Rules, 1962 ('the Rules'), while attributing profits to the alleged PE of the appellant in India.

6. Without prejudice to ground nos. 1 to 5 above, the learned AO has on the facts and in the circumstances of the case, and in law, and based on the directions of the learned DRP, erred in not using any scientific method in determining 50 per cent of the alleged taxable profits (as arrived by applying Rule 10 of the Rules) as being attributable to Indian operations.

7. Without prejudice to ground nos. 1 to 6 above, the learned AO has on the facts and in the circumstances of the case, and in law, and based on the directions of the learned DRP, erred in not considering the deduction of change in premium reserves, claims (including claim reserves). and other incidental expenses while arriving at the taxable profit.

8. Without prejudice to ground no. 1 above, the learned AO has on the facts and in the circumstan