Home Case Index All Cases Income Tax Income Tax + AT Income Tax - 2014 (4) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2014 (4) TMI 770 - AT - Income TaxJurisdiction of the AO u/s 147 of the Act – Issue of notice u/s 148 of the Act – Held that:- The belief of the AO that income of the assessee had escaped assessment due to non-filing of the return by the assessee, is well-founded – DRP was of the view that the basis for issue of notice u/s 148 is very clear - It was upon survey u/s 133A conducted on 17.02.2009 at the office premises of Huawei India at Gurgaon, which led to the information in the form of documents and statements obtained by the Department revealing that the assessee was having a PE in India - It was on this basis that notice u/s 148 was issued – there was no infirmity in the order of DRP - the assessee had a taxable income in India which it did not disclose voluntarily but disclosed only after the issuance of notice u/s 148 - it is a clear case where there was escapement of income due to non-filing of return by the assessee – Decided against Assessee. Confirmation of income under DTAA - DTAA between India and China – Income accrue/arise in India u/s 5(2) of the Act – Deemed to accrue and arise u/s 9 of the Act – Income of the Permanent Establishment – Held that:- The assessee was unable to controvert the finding recorded by the AO as well as DRP - the Assessing Officer has clearly recorded the finding that the business of the assessee in India is being conducted with active involvement of the employees of Huawei India - Such employees of Huawei India alongwith the employees of the assessee have jointly prepared bidding documents for contracts, negotiated and concluded the contract on behalf of the assessee with its Indian customers - the employees of Huawei India form the sales team of the assessee - Such employees have habitually secured orders in India wholly or almost wholly for the assessee - Various documents found during the course of survey in the form of agreements, purchase orders, copies of contract prove the active involvement of employees of Indian company in the conclusion of contracts on behalf of the assessee - All the facts recorded by the AO and upheld by the DRP have not been controverted – this, there is no reason to interfere with the order of DRP – Decided against Assessee. Allocation of 30% of total supplies towards software - Bifurcation of the contract price between the hardware and software – Held that:- The decision in DIT Vs. Ericsson A.B., New Delhi [2011 (12) TMI 91 - Delhi High Court] followed - The hardware supplied by the assessee contained the software and the software was not separately supplied - the buyer is granted a non-exclusive, non-transferable and non-sub-licensable license to use the software – the buyer is granted no title or ownership rights or interest in the software - there was only one contract for supply of equipment which included hardware and software both - the income from supply of the equipment is to be assessed as business income arising from the assessee's business connection/PE in India – the AO is directed to rework out the assessee's income – Decided in favour of Assessee. Levy of interest u/s 234A and 234B of the Act – Held that:- Relying upon DIT-I, International Taxation Vs. Alcatel Lucent USA, Inc. and another [2013 (11) TMI 734 - DELHI HIGH COURT] - what was the stand of the assessee in the return of income filed by it would be relevant for deciding the liability to interest under Section 234B - this aspect has not been considered either by the AO or by the DRP - the orders of authorities below with reference to levy of interest under Section 234B of the Act set aside - thus, the matter is remitted back to the AO for fresh adjudication – Decided in favour of Assessee.
|