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2023 (4) TMI 1303 - AT - Income TaxAccrual of income in India - income from business or profession related to PE of the assessee - Fixed place Permanent Establishment ("PE") for business in India, to carry on the business of sale of software, export of goods, reimbursement and Royalty for use of technology and brand - DTAA between India and Ireland - AO proposed for addition of business income related to Permanent Establishment (“PE”) @ 40% - HELD THAT:- Revenue failed to rebut the fact that impugned transaction of sale of software/hardware was undertaken outside India to group company in India and were subjected to transfer pricing scrutiny in the hands of the alleged PE and same was accepted to be at arm’s length price. Therefore, nothing further would be attributable to the alleged PE Looking to the facts of the present case, we find merit into the contention of the assessee that the Assessing Authority was not justified in making addition in the hands of the assessee when in the case of alleged PE of the assessee, the transactions have been treated to be arm’s length price. Furthermore, the assessee has pointed out that while making addition, the AO has also included the transaction related to hardware whereas allegation of PE is related to software. In the light of the binding precedents, we are of the considered view that the authorities below erred in making the impugned additions. We therefore, direct the AO to delete the same. Ground Nos. 1 to 10 raised by the assessee are hence, allowed.
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