TMI Blog2017 (5) TMI 911X X X X Extracts X X X X X X X X Extracts X X X X ..... PER R.C.SHARMA (A.M): This is an appeal filed by the Revenue against the order of CIT(A)-10, Mumbai dated 30/08/2013 for the A.Y.2005-06 in the matter of order passed u/s.143(3) r.w.s. 144C of the IT Act. 2. In this appeal, revenue is aggrieved by the action of CIT(A) holding that reopening the assessment u/s.147 was not valid. On merits revenue is aggrieved for allowing the opportunity of expenditure to the extent of 75.70% instead of 67.58% as apportioned by AO. 3. Rival contentions have been heard and record perused. 4. Facts in brief are that the assessee filed its original return of income on 31-10-2005 declaring total income at Rs. Nil. The said income was assessed by the AO after issuance of notice u/s. 143(2) and 142(1) of the IT. Act, 1961 determining the total business income at ₹ 8,79,55,593/- vide order dt. 27-12-2007. Subsequent to the aforesaid assessment, the assessee's case was re-opened by the AO through issuance of notice u/s. 148 of the I.T. Act dt. 29-3-2010. The AO has observed that while drawing the final statement of the Indian Operation in comparison to the Global Revenue that the expenses apportioned were @ 75.705% whereas the e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... out by the AO is held to be invalid. Hence the re-assessment order cannot be sustained in the eyes of law. Thus, the appellant's this ground of appeal is allowed. 8. Ground No.2:- Through this ground of appeal, the appellant's AR has agitated.against the disallowance made by the AO of excess expenses of RS.98,52,745/-. In the course of appellate proceedings, the appellant's AR has vehemently argued against the aforesaid action- of the AO and stated that the AO could not take note of the details available already on record. The appellant's AR argued that the comparison carried out by the AO for expenses was incorrect as the appellant has already reduced operating income, sale of decoders, receipt from Syndicate of Broadcast rights from the Global revenue, which were not in relation to the Indian operation of the appellant company. To this fact, the appellant's AR has filed detailed written submission in support of its contention. The same is extracted herein below:- 1.0 Taj had prepared the financial statements for its Indian operations by compiling the necessary information from the global books of account of Taj. The copy of the allocation sheet i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 5,000 1,575,000 Supreme Court Award 2,250,000 2,250,000 Global Revenue as per Allocation Sheet considered for Indian operations 16,992,754 12,864,358 % of Revenues 100% 75.70% The total world wide common revenue featuring India as a part of the territories for the financial year ended 31 March 2005 is US$ 16,992,754 out of which, the revenue from Indian operations is US$ 12,864,358. As such, the revenue from Indian operations is about 75.70% to the total revenue and accordingly the expenses, which are apportioned on the basis of revenue, are 75.70% of the total expenses. 4.0. Taj 'Submits the break up of Global Revenue as shown in financial statements of Indian operations as under:- Particulars Amount US$ Global Revenue as per Audited Global Financial Statements 19,035,454 Less: Operating Income which has been reduced from operating costs (the balance operatin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s. Similarly, there are no decoder costs debited to India operations since none of the decoders were sold to Indian distributors during the captioned year. Accordingly, the aforesaid aspects does not have bearing on the Indian operations. 7.0 Explanatlon as regards Advertisement Spot Sales not considered for determining allocation ratio. During the audit of global financial statements, it was identified that there was difference of US$ 125,000 in the advertising revenue from Pakistan territory which had been reversed. Since the same was pertaining to 100% outside India, it has not been considered for determining allocation ratio. 8.0 Calculation of the income 1 loss attributable to Indian Operations Revenues allocation Revenues considered by your Appellant Particulars Global Operations (US$) Indian Operations (US$) Revenues considered for allocation 16,992,754 12,864,358 Total costs (As per the allocation sheet) 20,152,688 13,961,158 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 9. Against the above order of CIT(A), Revenue is in further appeal before us. 10. Learned DR relied on the order of the AO and contended that AO has correctly reopened the assessment and also correct in apportioning the expenses @75.705% instead of 67.58%. 11. On the other hand, learned AR contended that while giving effect to the ITAT order, the AO himself has accepted that no income was attributable to assessee in India and there is also no PE. Our attention was invited to page 93 of the paper book containing the order passed by AO dated 17/02/2017 giving effect to the ITAT order dated 05/07/2016 in ITA No.4176/Mum/2009, ITA No.4706/Mum/2009 read with ITAT order dated 23/12/2016 for ITA No.9079/Mum/2010 for A.Y. 2006-07. We had carefully gone through the order passed by the AO dated 17/02/2017 being order giving effect to the ITAT order for A.Y. 2006-07 wherein AO has accepted that since no income is attributable to the assessee in India, losses would not been available for set off and therefore, total income was computed as Nil. As the AO himself has accepted that no income is attributable to assessee in India, the appeal filed by Revenue has no legs to stand. 12. We f ..... X X X X Extracts X X X X X X X X Extracts X X X X
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