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2019 (4) TMI 2073 - AT - Income TaxIncome accrued in India - Attribution of the income - Addition holding that the assessee has permanent establishment in India - addition on account attribution of income being recipient of such commission income - HELD THAT:- Assessee earned sales revenue from India arising from above business activity. The rights and responsibilities under the agency agreements between the Assessee and Hempel India created Agency Permanent Establishment (PE) of the assessee in India as per Article 5(4) of the India - Singapore Tax Treaty. In consideration of the services rendered by the Hempel India to the assessee, the former charges commission based on percentage of sales to the later under the arm's length principle. In view of the above, the learned Counsel for the assessee took us through the Tribunals order in assessee's own case for AY 2014-15 [2019 (2) TMI 2044 - ITAT MUMBAI] wherein Tribunal has considered this issue and held that there is no dispute about the existence of assessee's agency PE in India but held that a foreign company is liable to be taxed in India on so much of its business profit as is attributable to its PE in India. The Tribunal accepted the assessee's cost plus 8.17% markup as commission on sales and deleted the addition made by AO / DRP, who estimated the profit of assessee PE at an adhoc rate of 25% of the sales. Respectfully following the Tribunal's decision in assessee's own case as the facts and circumstances are exactly identical in this year also, we delete the addition made by AO and affirm by DRP. This issue of assessee's appeal is allowed. Since we have already held that no further income could be attributed to its agency PE again, once transfer pricing analysis of the transaction between assessee and its agent in India has been undertaken. Appeal of assessee allowed.
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