TMI Blog2018 (4) TMI 1515X X X X Extracts X X X X X X X X Extracts X X X X ..... 10 - - - Dated:- 23-4-2018 - SHRI C.N. PRASAD, HON'BLE JUDICIAL MEMBER AND SHRI MANOJ KUMAR AGGARWAL, HON'BLE ACCOUNTANT MEMBER Assessee by : Shri Niraj Sheth Shri Jay Bhansali Department by : Shri M.V. Rajguru ORDER Per C. N. Prasad ( JM ) 1. This appeal and cross objection are filed by the Revenue and assessee against the order of the Ld. Commissioner of Income Tax (Appeals)-31 Mumbai dated 19.06.2008 for the A.Y. 2005-06. 2. The Revenue in its appeal has raised following grounds: - (1) On the facts and the circumstances of the case and in law, the Ld. CIT(A) erred in holding that the assessee does not have Permanent Establishment (P.E.) in India and accordingly its business are not taxable in India. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e relying upon the decisions CIT vs. Madras Fertilizers Ltd 149 JTR 703, Sedco Forex International Drilling Inc Vs DCIT 72 JTD 415 (ITAT Delhi), Rheibraun Engineering Wasser Gmbh 1915/Bom/96. 4. The Ld. Counsel for the assessee, at the outset submitted that the issue raised in the cross objection by the assessee that, even if it is held that the assessee has permanent establishment in India its income is not taxable in India as it has paid arm s length remuneration/commission to its agent in India which is taxed in India and therefore no adjustment to be made in the hands of the assessee, is decided in favour of the assessee in assessee s own case for the A.Y. 2007-08 by the Coordinate Bench of the Tribunal in ITA No. 8862/Mum/2010 b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ein the alternative contention of the assessee that income of the assessee is not chargeable to tax in India as the assessee has paid arm s length remuneration/commission to its agent in India which was taxed in India, has been accepted following the decision of the Hon ble Supreme Court in the Case of CIT v. E-funds I.T. Solutions Inc., (supra) while holding so the Coordinate Bench observed as under:- 4. The learned Counsel for the assessee stated that no adjustment on account of ALP of space selling is considered by TPO and once, no transfer pricing adjustment is made, no further income chargeable to tax in India can be attributable to the assessee for the reason that the transaction between the assessee and AE has been found at arm ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Sl. No Description of transaction Method Value (In Rs.) 1. Financial Shared Services (Back Office) TNMM 33.9 Cr. 5 2. Call Center Services (Shared Service Centre) TNMM 88.03 Cr. 3. Software Development (Off- shore for call centres) TNMM 57.58 Cr. In addition to the above the assessee has also provided software development services to overseas eFunds group entities. The international transactions undertaken by the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ia. Under Article 7(2) not all profits of MSCo would be taxable in India but only those which have economic nexus with PE in India. A foreign enterprise is liable to be taxed in India on so much of its business profit as is attributable to the PE in India. The quantum of taxable income is to be determined in accordance with the provisions of the IT Act. All provisions of the IT Act are applicable, including provisions relating to depreciation, investment losses, deductible expenses, carryforward and set-off losses, etc. However, deviations are made by DTAA in cases of royalty, interest, etc. Such deviations are also made under the IT Act (for example Sections 44-BB, 44-BBA, etc.) 36. Under the impugned ruling delivered by AAR, remunera ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Taxation) (2017) 162 ITD 674 (MumTrib.) 18. As regards ground No.1 of the Revenue's appeal, it is admitted fact that, similar to ground which has been decided in the assessment year 2007-08. Therefore, in view of the finding given there in, we hold that no further income chargeable to tax in India can be said to be attributable to the assessee for the reasons that the transaction between the assessee and PE has been found at arm's length price and for this year also the TPO's order in case of the assessee and Taj India has been placed on record wherein the transaction has been accepted at arm's length price. Thus, ground No. 1 is dismissed. 6. In view of the above, the learned Counsel for the assessee argued that ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
