TMI Blog2015 (10) TMI 161X X X X Extracts X X X X X X X X Extracts X X X X ..... and Representation Agreement”, has not been examined by the Assessing Officer. Therefore, for the purpose of verification and examining of the content of this Schedule, we restore the matter back to the file of AO, to adjudicate this issue afresh in light of the aforesaid document, because it changes the entire colour of the conclusion drawn by the AO. - Decided in favour of assessee for statistical purpose Addition on account of attribution of profits to Permanent Establishment - Held that:- As decided by the Tribunal in assessee’s case for A.Y. 2007-08 the assessee branch, does not constitute PE of Varian-Italy and, therefore, the addition being 10% of gross made by Varian Italy to its customer in India, cannot be taxed in the hands o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... YA, A.M.: This appeal by the assessee is preferred against the order of TPO dated 31-03-2011 in pursuance to the directions of the Dispute Resolution Panel I (DRP), Mumbai dated 21-09-2012. 2. The assessee has raised four substantive grounds of appeal. Ground No. 1 relates to the addition of ₹ 44,22,168/- on account of inclusion of reimbursement of expenses for the purpose of computing commission income. 3. At the very outset, the ld. Counsel for the assessee stated that this issue has been decided by the Tribunal in assessee s case for A.Y. 2007-08 in ITA No. 8950/Mum/2010 dtd. 28-02-2014. The ld. D.R. fairly conceded to this. 4. We have carefully perused the orders of the authorities below and the decision of the Tribu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... treated as allowed for statistical purpose. 5. Facts and issues being identical, respectfully following the findings of the co-ordinate Bench of this Tribunal, we restore the matter back to the file of the A.O. to adjudicate this issue afresh in the light of the direction given by the Tribunal in A.Y. 2007-08. Ground No. 1 is treated as allowed for statistical purpose. 6. Ground No. 2 relates to the addition of ₹ 24,46,542/- on account of attribution of profits to Permanent Establishment. 7. Onceagain the ld. Counsel for the assessee stated that the issue has been decided by the Tribunal in assessee s own case in A.Y. 2007-08 vide ITA No. 8950/Mum/2010. The ld. D.R. fairly conceded to this. 8. We have carefully perused th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ₹ 10,80,117/-, being 10% of gross made by Varian Italy to its customer in India, cannot be taxed in the hands of the assessee. Thus ground no.2 as raised by the assessee is treated as allowed. 9. As no distinguishing facts have been brought on record before us, respectfully following the findings of the co-ordinate Bench, we hold that the assessee branch does not constitute PE of Varian-Italy and therefore the addition of ₹ 24,46,542/- cannot be taxed in the hands of the assessee. Ground No. 2 is accordingly allowed. 10. Ground No. 3 relates to the Transfer Pricing adjustment of ₹ 87,34,979/-. 11. Following heads of expenditure were considered for allocation:- Sr. No. Particular ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... somehow spread the costs across the various business activities. Therefore, gross profit ratio cannot be applied to those costs which are directly attributable to the activities and therefore manpower ratio has been identified as a more appropriate allocation key to allocate the costs. The explanations/submissions made by the assessee did not find favour with the TPO. The TPO was of the opinion that the expenses have no direct relation to the number of employees employed. The TPO further observed that it is a prerequisite under the agreement that the Indian branch maintained a sales and service organization for rendering the marketing services to be provided under the agreement. Hence, it is appropriate that these expenses are apportioned i ..... X X X X Extracts X X X X X X X X Extracts X X X X
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