TMI Blog2012 (11) TMI 1109X X X X Extracts X X X X X X X X Extracts X X X X ..... ments to the arm's length price of the correspondent banking related support services and portfolio analytics services determined by the TPO should be deleted. 6. The CIT(A) ought to have held that, the adjustments to the arm's length price of the Audit and Technology related services, Banc of America Equity Partners (Employee rendering) services, Operational Audit services, Support in relation to Cash Management Services, Portfolio Management Group employees providing regional support services and System's group employees providing regional support determined by the TPO should be deleted. 7. While dealing with the adjustments as referred in ground no. 5 and 6, the CIT(A) ought to have held that, having regard to the provisions as contained in Article 7 of the Double Taxation Avoidance Agreement between India and the United States of America which states that, in determining the profits of the appellant (being a permanent establishment), nothing more than actual cost incurred in respect of such support to overseas branches should be considered, the mark-up arrived at by the AO/TPO needs to be deleted. 8. The CIT(A) ought to have held that the expenses ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r the support services provided by the appellant in India in relation to such loans, was already determined by the TPO and added to the appellant's income chargeable to tax and, therefore, nothing further remained to be added. 2. We have heard the learned Counsel and the learned DR in this regard. 3. The facts relating to the present appeal are that assessee Bank of America N.A. is Banking Company incorporated in the USA and has been operating in India since 1964 currently having five branches in India namely Mumbai, New Delhi, Calcutta, Chennai and Bangalore. The Bank s Indian branches offer a range of wholesale banking products catering primarily to multi national companies and other top segment corporate customers. Some of the products offered are various types of loans such as overdrafts, cash credits, term loans, bills discounting, working capital finance etc, acceptance of current accounts, term deposits, securities and money market transactions, derivatives and foreign exchange trading, trade finance related transactions such as guarantees, letters of credits etc. The Indian branches of the bank do not offer any retail banking products. The facts in chronological ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hich was challenged before ITAT. 5. Before the CIT (A), it was argued that since assessee had withdrawn the objection before the DRP and as the DRP become functus officio consequent to the withdrawal of objections, the order passed by the DRP was bad in law and the CIT (A) has jurisdiction to entertain the appeal which was filed in time on 10.03.2010. The CIT (A) however, was of the opinion that following the CBDT Circular No.5, assessee has only option to either prefer the appeal before the CIT (A) or before the DRP and since assessee chose to file objection before the DRP, it cannot prefer the appeal before the CIT (A). He dismissed the appeal in limine. However, while dismissing, he also observed that AO having completed the order earlier on 10.02.2010, committed a mistake and therefore, that order becomes void. 6. The learned Counsel submitted that the order of the DRP was challenged before the ITAT in ITA No.7100/Mum/2010 which held the order passed on 28.08.2010 as invalid, therefore, the original order passed on 10.02.2010 is the only valid order. Since this present appeal was not placed before the Bench for consideration, they did not adjudicate the prayer to restore ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uld not automatically close because the DRP is having the powers of enhancement of the variation as proposed in the draft order. Therefore, without permission of the DRP, the application/objection, once filed, cannot be withdrawn by the party in view of sub. Sec. 7 8 of section 144C of the I T Act which read as under: 7. The Dispute Resolution Panel may, before issuing any directions referred to in sub. section (5)-a) make such further enquiry, as it thinks fit; or b) cause any further enquiry to be made by any income tax authority and report the result of the same to it. 8) The Dispute Resolution Panel may confirm, reduce or enhance the various proposed in the draft order so, however, that it shall not set aside any proposed variation or issue any direction under sub section (5) for further enquiry and passing of the assessment order. 4.2 Since in the case in hand, the DRP after taking note of the fact that the assessee desires to exercise the option to file the appeal before the Commissioner of Income Tax(Appeals) against the assessment order, accepted the request of the assessee for withdrawal of the objection while passing the order dt 13.7.2010 and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... matter before us in the present proceedings; therefore, we do not propose to pass any direction in that respect. However, assessee otherwise is at liberty to take legal remedy as per law . 9. Since the subsequent order passed by AO was cancelled, the order dated 10.02.2010 originally after withdrawal of objections is the valid order and the appeal preferred before the CIT (A) was correctly made within the time as prescribed under the provisions of the Act. As DRP did not give any direction and allowed the objections to be withdrawn, it can not be stated that assessee exercised option to prefer objections before DRP. We are of the opinion that the CIT (A) committed an error in not admitting the appeal. Therefore, we set aside the order of the CIT (A) with a direction to admit the appeal and adjudicate the matter on merits. With these directions, the grounds to that extent are considered allowed. Since the matter is restored to the file of the CIT (A) to consider the appeal on merits, the grounds raised on merits of the addition made by AO are not adjudicated. 10. In the result the appeal filed by assessee is allowed for statistical purposes. - - TaxTMI - TMITax - Income ..... X X X X Extracts X X X X X X X X Extracts X X X X
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