Home Case Index All Cases Income Tax Income Tax + AT Income Tax - 2021 (2) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2021 (2) TMI 945 - AT - Income TaxIncome accrued in India - taxable income left in the hands of the PE - commission paid to Indian agent - Whether foreign entity having a permanent establishment in India shall be liable to income tax only to the extent as is reasonably attributable to the operations carried out in India? - commission/remuneration paid to RIPL from the profits attributed to the PE - India and UK DTAA - HELD THAT:- When we deduct commission/remuneration from the RIPL from the profits attributed to the PE, no taxable income left in the hands of PE. Consequently, addition made by the AO/CIT (A) is not sustainable in the eyes of law. Decision rendered by the coordinate Bench of the Tribunal in case of Amadeus Global Travel Distribution S.A [2007 (11) TMI 330 - ITAT DELHI-B] affirmed by the Hon’ble Delhi High Court [2011 (4) TMI 1520 - DELHI HIGH COURT] and [2011 (5) TMI 1114 - DELHI HIGH COURT] by relying upon the decision in case of DIT vs. Galileo International Inc [2009 (2) TMI 497 - DELHI HIGH COURT] has been further followed by the coordinate Bench of the Tribunal in assessee’s own case [2020 (11) TMI 206 - ITAT DELHI] We are of the considered view that when RIPL, a domestic subsidiary company, has already been remunerated at arm’s length, no further attribution of profit to PE would be warranted. Even otherwise, by following the order passed by the coordinate Bench of the Tribunal in assessee’s own case for AY 2007-08 [2020 (11) TMI 206 - ITAT DELHI], when we deduct the remuneration/commission paid to RIPL from the amounts of profit attributed to the PE no taxable income left in the hands of the PE. Consequently, additions made by the AO and confirmed by ld. CIT (A) are ordered to be deleted being not sustainable in the eyes of law. Consequently, all the appeals filed by the assessee are hereby allowed.
|