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2015 (10) TMI 1887 - AT - Income TaxAttribution of profits out of the sales made by the head office - CIT(A) confirming the action of AO of attributing the profit on the direct sales made in India by the Head Office of the Appellant as the profit of the Indian Branch - Held that:- Decision of the Tribunal in assessee’s own case for earlier assessment years 1999-2000 & 2000-01, wherein the coordinate bench had accepted the estimate of gross profit attribution at 10% in place of 20%. We have also perused the TP report and the computation, wherein, the TPO has accepted the gross profit rate declared at 8.81%. In such a situation, acceptance of gross profit attribution of India Branch @ 20% does not inbspire confidence.We, therefore, accept the gross profit margin declared by the assessee for the year under consideration - Decided in favour of assessee. Non-reduction of the management fees offered to tax - CIT(A) directing AO to reduce the management fee offered to tax by the Appellant in its return of income in respect of direct sales by the Head Office - Held that:- As decided in earlier AY's the fact which remains uncontroverted by the revenue authorities and the DR are that the assessee in the year under consideration was covered under the TP regulations and in those proceedings, the factum of management fee has dealt with extensively and in the process, the TPO found the receipt of management fee by the India Branch from SJMH related to services provided to both SJMI & SJMH. It is evident from the accounts submitted before the AO, because in the profit & loss account submitted, it showed the receipt of ₹ 9,60,57,310/which included ₹ 79,20,240/under the head management fee for marketing support at ₹ 79,20,240 - Decided in favour of assessee.
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