TMI Blog2011 (3) TMI 1348X X X X Extracts X X X X X X X X Extracts X X X X ..... in India. Decided in favor of the assessee. - ITA Nos. 3055 and 3056 (Mum.) of 2008 - - - Dated:- 31-3-2011 - Shri P.M. Jagtap, And Shri V. Durga Rao, JJ. Represented By: Shri Sanjiv Dutt for the Appellant. Shri Arvind Sonde for the Respondent. V. Durga Rao, Judicial Member These appeals filed by the Revenue are directed against the orders of the learned Commissioner of Income Tax (Appeals)-XXXIII, Mumbai, dt.29.2.2008. 2. The grounds of appeal raised in these appeals are as under : ITA No.3055/Mum./2008 "On the facts and in the circumstances of the case and in law, the learned CIT(A) erred in holding that the assessee's Liaison office cannot be considered as a permanent establishment in India and no profit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... considered as a permanent establishment in India or not. 4. At the time of hearing, the learned counsel for the assessee has submitted that the issue involved in these appeals is squarely covered by the decision of the ITAT, Mumbai Bench in assessee's own case for the assessment years 1999-2000 to 2002-03 and 2003-04 in ITA Nos. 4657 to 4660 and 3342/Mum./2007 vide order dt. 28.01.2011, a copy of which has been filed before us. 5. On the other hand, the learned Departmental Representative has not objected the submissions made by the assessee. However, he supported the orders of the Assessing Officer. 6. We have heard both the sides and perused the records. The issue involved in this appeal is discussed by the Tribunal in detail in ass ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ns confined to purchase of goods in India for export, even though the non-resident has an office or an agency in India for this purpose. Where a resident person acts in the ordinary course of his business in making purchases for a non-resident party, he would not normally be regarded as an agent of the non-resident under section 163. But, where the resident person is closely connected with the non-resident purchaser and the course of business between them is so arranged that the resident person gets no profits or less than the ordinary profits which might be expected to arise in that business, the Income-tax Officer is empowered to determine the amount of profits which may reasonably be deemed to have been derived by the resident person fro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ired for the purpose of manufacture and sale abroad and the agent is chosen by reason of his skill, reputation and experience in the line of trade, it can be said that there is a business connection in India so that a portion of the profits attributable to the purchase of raw materials in India can be apportioned under Explanation (a) to section 9(1)(i). [The taxability of such portion of the profits will, however, be subject to the exemption provided in clause (b) of the Explanation to section 9(1)(j).]" Circular no.163 "2. The above sentence may convey the impression that a non-resident is liable to be taxed on a portion of the profits attributable to the purchase of raw materials required for the purposes of manufacture and sale ab ..... X X X X Extracts X X X X X X X X Extracts X X X X
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