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2016 (7) TMI 1043 - AT - Income TaxTaxability of royalty income - nature of income - PE in India - DTAA India USA - Held that:- The authorities below have proceeded on the assumption that the assessee company is the same entity which has entered into agreements in 1991 and is continuing whereas the fact of the matter is the assessee company is incorporated only on 15-03-2006 for which certificate of incorporation is placed on record by the assessee company at page 25-27 of paper book containing additional evidences. Thus, the fundamental premise on which the authorities proceeded in the matter has crept with an error which goes to the root of the matter and the orders of the authorities below cannot be sustained under these circumstances. In our considered view and in the interest of justice, the issues’ arising from these appeals needs to be set aside and restored to the file of the A.O. for denovo determination of all the issues on merits . As such, we set aside the matter back to the file of the A.O. with a direction to re-determine the issue de-novo on merits after considering the existing structure of the assessee company and the fresh agreements entered into with various entities in the light of provisions of the Act and DTAA entered into between USA and India . Needless to say that the assessee company be provided with proper and adequate opportunity of being heard by the AO in accordance with the principles of natural justice in accordance with law. The assessee company will be allowed to submit relevant additional evidences , material and explanations in support of its contentions in its defense, which shall be admitted by the AO and adjudicated on merits. - Decided in favour of assessee for statistical purpose.
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