TMI Blog2017 (5) TMI 1104X X X X Extracts X X X X X X X X Extracts X X X X ..... - Held that:- In assessment year 2006-07, the Tribunal has directed the Assessing Officer to recompute the income of the assessee in the light of the decision of ITAT in the assessee’s own case for assessment year 2003-04 and 2004-05. We accordingly, set aside the impugned order and restore the matter to the file of the Assessing Officer with a direction to recompute the income of the assessee in the light of the decisions of the ITAT in the assessee’s own case for assessment years 2003-04, 2004-05 and 2006-07. - ITA No.5102/Del/2013, AND ITA No.5404/Del/2013 - - - Dated:- 5-5-2017 - SHRI S.V. MEHROTRA, VICE PRESIDENT, AND SHRI SUDHANSHU SRIVASTAVA, JUDICIAL MEMBER For The Assessee : Shri M.P. Rastogi, Advocate Smt. Lalita Krishna ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the attribution of income at a figure of ₹ 20,86,409 / - is arbitrary, unjust and bad in law. 6. That in the absence of any income embedded in the amount reimbursed by US Nonresident to its Branch (appellant), acting as a pure cost centre, the income attributed at a figure of ₹ 20,86,409 / - is bad in law. 7. Without prejudice to above grounds the CIT(Appeals), after assessing the profit attributable at a figure of ₹ 20,86,409 / - to the Branch in India, ought to have subjected it to a further downward adjustment for functions performed, assets employed, working capital available and risks assumed. 8. Without prejudice to above grounds the authorities erred in charging interest under, section 234B of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fice in USA. Intellectual property rights vested with the head office only. It does not have business dealings with any one except the head office. Thus, it was the assessee s plea that there was no fixed place of business in India. At the very outset, the ld. counsel for the assessee fairly conceded that in assessment years 2003-04, 2004-05 and 2006-07 (ITA Nos.1597/Del/2009, 1598/Del/2009 1613/Del/2011) it has throughout been held that the assessee is having a PE in India. We find that in assessment year 2003-04, in para 23, the Tribunal has, inter alia, held that the assessee has a PE in India as per the provisions of Article 5(2)(b) and (c) of Indo-US DTAA. Therefore, ground Nos.1 to 6 are dismissed. 4. As far as profits attributab ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t.Years: 2003-04, 2004-05 30 borne by the US Head office, therefore, the AO rightly adopted the global profit of the US Head office for benchmarking the percentage of profit and the AO attributed 100% profit to the Indian PE. At this juncture, from the impugned order, we also observe that the CIT(A) has taken into account this very fact that the Indian branch takes some risk as the important drawing and designing calculations are carried out by the Indian company and impliedly other risks as stated above were taken by the US Head office and, therefore, in the totality of these facts and circumstances, the CIT(A) was justified in holding that 50% of the profits determined by the AO after applying rule 10 were to be attributable to the operat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 4, 2004-05 and 2006-07. 6. Ground No.8 is consequential. 7. Ground No.9 was not pressed even before the CIT(A). Hence, dismissed. 8. The Department has raised the following two grounds:- 1. On the fact and in the circumstances of the case, the holding of Ld ClT(A) that most of The comparables adopted by TPO are having business profile different from that of the assessee is wrong and incorrect as the Ld CIT (A) has been failed to provide the reason as to how and upto what extent the comparables adopted by TPO are having different business profile from that of the assessee company. 2. On the facts and in the circumstances of the case, the CIT(A) erred in holding that the profit returned by the assessee exceed the profit co ..... X X X X Extracts X X X X X X X X Extracts X X X X
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