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2015 (10) TMI 161 - AT - Income TaxInclusion of reimbursement of expenses for the purpose of computing commission income - Held that - As decided by the Tribunal in assessee s case for A.Y. 2007-08 if the Schedule A categorically provides that commission is not to be computed on the sale orders which requires the procurement of local content by the assessee then on such procurement of equipments by the assessee commission cannot be imputed because it is the reimbursement of the cost of local equipments procured. Further it appears that this relevant piece of document which is also a part of Distribution and Representation Agreement has not been examined by the Assessing Officer. Therefore for the purpose of verification and examining of the content of this Schedule we restore the matter back to the file of AO to adjudicate this issue afresh in light of the aforesaid document because it changes the entire colour of the conclusion drawn by the AO. - Decided in favour of assessee for statistical purpose Addition on account of attribution of profits to Permanent Establishment - Held that - As decided by the Tribunal in assessee s case for A.Y. 2007-08 the assessee branch does not constitute PE of Varian-Italy and therefore the addition being 10% of gross made by Varian Italy to its customer in India cannot be taxed in the hands of the assessee. - Decided in favour of assessee. Transfer Pricing adjustment - Held that - The assessee has used allocation key of employee head account. The expenses like rent depreciation electricity insurance charges office maintenance and other miscellaneous expenses have no co-relation with the number of employees. On the contrary these expenses have a direct bearing to the revenue generation. As per Rule 10-B(1) of the Act determination of ALP u/s 92CA(2) of the Act the ALP in relation to an international transaction has to be determined by the most appropriate method. In our considered opinion the method adopted by the TPO is slightly better than the method adopted by the assessee. More so when the allocation by the assessee is not supported by any certificate from the management. Considering the nature of expenses in totality we do not find any merit in the case of the assessee. Adjustment of Transfer pricing is accordingly confirmed - Decided against assessee. Short credit of TDS - Held that - We restore this matter to the file of the A.O. The A.O. is directed to verify the detail and allow proper credit of TDS to the assessee. - Decided in favour of assessee for statistical purpose
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