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2013 (7) TMI 63 - AT - Income TaxDetermination of total income Article 7 of DTAA between India and USA - CIT included receipt arising on account of the services to the Head Office in USA Held that:- Assessee company opened a branch in Hyderabad after obtaining permission from RBI No doubt that the assessee company has a permanent establishment in India Branch office is also rendering services of commercial nature which has been outsourced by the Head office Assessee is only carrying out the normal commercial activities of the Head Office No infirmity in the order of the CIT (A) in holding that the income earned by the assessee from the activities carried on by it is taxable in India Following the decision of ABN Amro Bank NV vs. Asst. DIT [2005 (8) TMI 294 - ITAT CALCUTTA-E] and Mitsri Banking Corpn. Vs. DDIT [2012 (8) TMI 450 - ITAT, MUMBAI] Decided against the assessee. Estimation of profit - held that:- it is seen from the facts on record that the assessee has not at all provided any basis for computing the profit. Therefore, the Assessing Officer estimated the profit in terms with Article 7(2) of Indo-US DTAA and Rule 10 of Income- tax Rules by estimating the income @ cost plus 15% mark up. The CIT (A) reduced the profit to 10% on considering the fact that the estimation of profit by the Assessing Officer is not based on any specific information and data. - The view of CIT(A) appears to be reasonable. So far as the assessee's contention that the head office has suffered loss and hence there cannot be any profit to the branch office, the same is not acceptable as profit of the branch office has to be computed as per the income earned by it. - Decided against the assessee.
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