TMI Blog2016 (1) TMI 1106X X X X Extracts X X X X X X X X Extracts X X X X ..... ot being the assessee and that these distributors further resale the products to ultimate customers independently. The Liaison office only provides certain servicing of the equipments to the distributors for which the expenses are reimbursed by the Israeli company. The Liaison office in India is merely in the nature to facilitate the contract between the distributors and the Israeli company. The distribution contract, per se at page _____ of the paper book, do not result into any generation of income and, therefore, the activities of the assessee have to be definitely considered to be proprietary and auxiliary in nature. The ld. AR has brought to our notice RBI approval, at page 10 of the paper book, which has been received by the assess ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f facts of the case are as under: The assessee filed its return declaring nil income on 28.12.06. The return was filed in response to the notice u/s 142(1) of the Act on 04.01.06. Accordingly, notices u/s 143(2) of the Act was issued. The assessee is a liaison office in India of company incorporated in Israel. In Israel the company is engaged in the development, manufacture and sale of Internet Traffic Management Solution under the style and name Radware Limited. The ld. AO further noted that in India, the liaison office is undertaking activities and acting as a communication channel between its head office in Israel and parties in India. During the assessment proceedings, it was submitted that the assessee is not carrying out any tradin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on activities, and are acting purely as a communication channel between its head office in Israel, and parties in India. The ld. AR stated across the bar that the assessee is not carrying on any activity of a trading, commercial or industrial in nature, and does not have any business income arising in India. 6.2. The ld. AR further submitted that, it is an undisputed fact that the company from Israel makes all the sales through the distributors directly from Israel as is clear from the diagram which has been reproduced at page 5 of the assessment order. The ld. AR submitted that the only work done by the assessee is servicing the equipments sold by the company directly. The ld. AR submitted that the distributors are independent parties a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... needs to be considered in the present appeal. We have observed from the findings of the ld. CIT(A) that the assessee has been involved in supplying the literature relating to marketing and sales without any participation in actual sales activity. The Israeli company is selling the products to the distributors as per the requirements directly from Israel, and also makes efforts to services and maintain products used within the territory, which are sold directly by the Israeli company. The Israeli company further sells to the distributors within the territory not being the assessee and that these distributors further resale the products to ultimate customers independently. 8.2. The Liaison office only provides certain servicing of the equi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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