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2018 (10) TMI 415 - AT - Income TaxTaxability of income towards fees for technical services earned by the assessee from Indian concerns on gross basis at 20%, being the rate of tax prescribed u/s 115A - Held that:- The fact of the matter is that the DTAA, under which such Ruling was rendered, has been substituted as discussed supra. In such circumstances, the prescription of section 245S(2) gets attracted, which requires consideration of the arguments of the assessee in the light of the substituted DTAA along with its Protocol to the facts of the instant case. Such new DTAA and the Protocol have not been considered by the Assessing Officer, who has simply gone by the Ruling rendered by the AAR. As such, we are of the considered opinion that the ends of justice would meet adequately if the impugned order on this score is set aside and the matter is remitted to the file of Assessing Officer. We order accordingly and direct him to decide the issue afresh by considering the effect of alterations, introduced in the new DTAA of 1998 along with the Protocol, if any, on the Ruling given by the AAR in the assessee’s own case. Discussion of the new DTAA or the Protocol above should not be construed as reflection of our opinion on its applicability or otherwise to the facts of the instant case. The AO should decide its implications independently on merits. The assessee will be allowed a reasonable opportunity of hearing in such fresh proceedings. Allocation of expenses - AO found that some of the expenses made by the assessee were not in accordance with the arm’s length principle - Held that:- It is observed that the assessee booked proportionately more expenses as its share in ECI’s expenses. When the Assessing Officer required the assessee to produce final accounts of ECI for the year, the assessee failed to comply with the same and gave figures only for a period of nine months. Other necessary details as called for were also not fully provided. This led to the allocation of expenses on the basis of turnover. It is, but, natural that in the absence of any worthwhile details furnished by the assessee, the Assessing Officer could have no other rational basis to apportion the expenses. The ld. AR submitted that the assessee has got necessary details which can be produced before the authorities below. Taking a holistic view of the matter, we set aside the impugned order on this score and remit the matter to the file of Assessing Officer for deciding this issue afresh as per law
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