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2015 (3) TMI 968 - AT - Income TaxService PE - whether assessee's assistance to M/s Lucent Technologies India Ltd. in connection with services of installation, commissioning, testing, etc. of the hardware and software constitutes only 'Service PE' ? - assessee is a company incorporated in USA - Held that:- Tribunal held LTIL to be the service PE of the assessee in India. The contention of the Department through the instant appeal that LTIL should be considered as PE on the basis of fixed place, installation and dependent agent as well, does not merit acceptance. If the Revenue was aggrieved against the order passed by the Tribunal holding LTIL to be the service PE of the assessee in India, it ought to have challenged the same before the Hon'ble High Court or have got it modified through miscellaneous application. Having neither filed any MA nor raised this issue before the Hon'ble High Court, notwithstanding the fact that it filed appeal against the tribunal order, the natural consequence which follows is that the finding given by the Tribunal as to LTIL constituting service PE of the assessee stood accepted by the Revenue. As such, it has become too late in the day to agitate in the present proceedings that the view taken by the tribunal in the first round should be altered, which, in fact, has attained finality. We, therefore, hold that the ld. CIT(A) was justified in coming to the conclusion that LTIL constituted only service PE of the assessee in India. - Decided against revenue. Attribution of income - profits attributable to the Indian PE of the assessee at the rate of 2.5% of the total turnover for the relevant year - Held that:- The AO, after holding that there was not only service PE, but also fixed place PE etc. in India, finalized the assessment by attributing income to the PE in India at the rate of 2.5% of the sales made by the overseas entities in India. Such attribution of income was accepted by the assessee as well without filing any further appeals on this score. Now, we are confronted with a situation in which there is a profit attribution by the Revenue itself to the PE in India at the rate of 2.5% of the sales made by the overseas entities in India on one hand, and on the other hand, the Revenue has brought no material on record to demonstrate any mechanism for attributing income to the assessee's PE in India. In our considered opinion, the view taken by the Revenue itself in subsequent years for attributing 2.5% of the sales made by the overseas entities in India as attributable to the PE, constitutes a good basis for adoption. As the ld. CIT(A) has followed the same, we see no reason to interfere with the impugned order on this issue - Decided against revenue.
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