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2023 (10) TMI 699 - AT - Income TaxIncome accrued in India - existence of a DAPE in form of Adobe India and further attribution to the alleged PE - attributing a sum as business profits to the alleged PE of the Assessee in India - HELD THAT:- Considering the factual matrix of the case and respectfully following the decisions of the Co-ordinate Bench of the Tribunal for earlier AYs order [2023 (1) TMI 14 - ITAT DELHI] AND [2023 (9) TMI 1015 - ITAT DELHI] as well as decision of Morgan Stanley & Co. Inc [2007 (7) TMI 201 - SUPREME COURT] and E-Funds IT Solution Inc [2017 (10) TMI 1011 - SUPREME COURT] we are of the considered view that once transfer pricing analysis of Adobe India has been undertaken and the ALP has been determined which has been accepted by the Ld. AO, nothing further would be left to be attributed to Adobe India as the alleged PE of the assessee in India and that accordingly would extinguish the need for attribution of any additional profits to the alleged PE of the assessee. It is however to be noted that the issue relating to the existence or otherwise of the DAPE of the assessee in the form of Adobe India is left open following the decision (supra) of the Co-ordinate Bench for AY 2018-19 and 2019-20. Accordingly, ground Nos. 1 to 2.5 of the assessee is allowed to the extent indicated above. Higher rate of tax imposed on the interest income on the income tax refund - AO levied tax on interest on the income tax refund received by the assessee during the relevant AY @ 40% (plus surcharge and cess) as per the provisions of the Act as opposed to beneficial rate of tax of 10% as per the provisions of Article 11 of the India-Ireland DTAA - HELD THAT:- Claim of the treaty benefit made by the assessee is not in dispute at all at this stage and hence no verification is required by the Ld. AO with respect to the same. In the light of the above legal position and factual matrix of the case, we set aside the order of the Ld. AO on the impugned issue and direct him to apply the tax rate of 10% on interest on income tax refund as per the provisions of Article 11 of the India-Ireland DTAA. Accordingly, ground No. 3 is decided in favour of the assessee. Short credit of TDS whilst computing the tax liability of the assessee for the year under consideration - We direct the Ld. AO to verify the claim of the assessee and grant TDS credit accordingly as per the law. Levy of an additional tax on ‘Special Income other than Section 115BBE whilst computing the tax liability of the assessee for the year under consideration - AR submitted that no such income exists and that no discussion regarding the same has been made in the assessment order - HELD THAT:- Perusal of the assessment order supports the contention of the assessee. Accordingly, we direct the Ld. AO to verify the said claim of the assessee and grant relief to the assessee subject to the outcome of his verification.
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