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2017 (3) TMI 1670 - AT - Income TaxBusiness connection in India - permanent establishment in India - Held that:- Appellant's themselves admitted to the activities of the LO are taxable in India by showing income at cost + 6% basis - thus assessee's own admission by showing income attributable to the Indian operations, it has indirectly accepted the fact that they had business connection in India and also the Indian LO as the PE of Arrow Singapore - hence assessee's arguments deserve no consideration. Quantification of profits attributable to the LO and the HO - Held that:- AO was reasonable in considering sectoral weightage at 50:25:25 for functions performed, assets employed and risks involved - further AO was correct in taking only 10% towards assets and risks in the intra sectoral ratio pertaining to LO and the balance 90% to the HO - hence the final quantification of 565 to LO and 235 to HO on a scale of 800 is held to be perfectly justified and accordingly quantification of 70 : 30 between the LO and the HO is upheld - The final quantification of profits attributable to the LO and the HO as per the table 1 , above , as per para 5 at 40 : 60 is also upheld Levy of interest u/s.234B - Applying the ratio laid by the Supreme Court in the case of COMMISSIONER OF INCOME TAX VERSUS ANJUM MH GHASWALA AND OTHERS [2001 (10) TMI 4 - SUPREME COURT], has held that the levy of interest u/s.234B is mandatory - all the appeals of assessee is dismissed. Transfer Pricing adjustment u/s 92CA - protective assessment - working capital adjustment - Held that:- CIT(A) confirmed AO's protective assessment wherein he has taken 40:60 to the LO:HO, held that the percentage of ALP as determined by the TPO should have been applied only on 40% of the total sales and the ALP should have been determined accordingly - also the working capital adjustment of 0.906% and 1.459% could be given in AY's 02-03 & 03-04, respectively - hence the orders of the CIT (A) do not require any interference and appeal of revenue is dismissed.
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