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2020 (10) TMI 1019 - ITAT DELHITP Adjustment - Attribution of profits - purported PE as remunerated on an arm’s length basis - whether no additional profits could be attributed to assessee’s income - case of the assessee before us is that without prejudice to its contention on there being PE or dependent agent PE or not, when ESPN India is remunerated at arm’s length basis then no further attribution of profits can be made in the hands of the assessee in India - HELD THAT:- Where once arm’s length principle has been decided then, the Hon’ble Supreme Court has laid down the proposition that there can be no further profit attribution to a person, even if, it has a PE in India - See Hon’ble Supreme Court in Honda Motors Co. Ltd. vs ADIT[2018 (5) TMI 265 - SUPREME COURT] and M/S E-FUNDS IT SOLUTION INC. [2017 (10) TMI 1011 - SUPREME COURT]. The said proposition have been also followed in BBC Worldwide Limited [2016 (3) TMI 1025 - DELHI HIGH COURT] and it has been held that if arm’s length remuneration is paid to the dependent agent, nothing further remains to be attributed. Whether ESPN India constitutes PE of the assessee in India under DTAA between India and Mauritius on the principle that ESPN India was remunerated at arm’s length by the assessee, which has been accepted by the Assessing Officer/TPO of ESPN India and also the assessee, then no further attribution of profits is to be made in the hands of the assessee. Interest under section 234B - HELD THAT:- Since, the assessee is foreign company then no interest is to be charged under section 234B of the Act as entire income of the non-resident entity is subject to tax deduction at source. Accordingly, the assessee is not liable to pay any advance tax and consequently no liability to pay interest under section 234B of the Act. In this regard, we find support from the ratio laid down in DIT vs Jacabs Civil Inroporated/Mitsubishi Corporation [2010 (8) TMI 37 - DELHI HIGH COURT] and in DCIT vs NGC Network Asia LLC [2009 (1) TMI 174 - BOMBAY HIGH COURT] wherein held that when a duty is cast on the payer to deduct and pay the tax at source, on payer’s failure to do so interest under section 234B of the Act cannot be imposed on payee assessee - Appeals of the assessee are allowed.
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