TMI Blog2020 (10) TMI 1188X X X X Extracts X X X X X X X X Extracts X X X X ..... conclude that the assessee did not have any PE in India during the year under consideration. The Grounds of appeal Nos. 6 7 are allowed in terms of our aforesaid observations. Computing of the income of the assessee attributable to its PE in India - profitability on an adhoc basis at 30% of its gross receipts from TCL by applying Rule 10 of the Income Tax Rules, 1962 - HELD THAT:- Since we have upheld the primary stand of the assessee that there does not exist any PE of the assessee in India, thus, the dispute in Ground of appeal No. 8 having been rendered as merely academic is dismissed as infructuos. A.O levying surcharge, secondary education cess and higher secondary education cess over and above the tax computed at the rate prescribed under the India-U.K. tax treaty on the receipts of the assessee while calculating its income tax liability for the year under consideration - HELD THAT:- Tax computed at the rate prescribed under the India-U.K. tax treaty is not be subjected to any additional taxes in the form of surcharge or education cess. We thus set aside the view taken by the lower authorities and direct the A.O to recompute the tax liability of the assessee in t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dictional Mumbai Tribunal in the Appellant's own case for previous Assessment Years 2000-01 to AY 2005-06 (ITA No. 5102/M/2004, 423/M/2005, 7555/M/2005, 3426/M/2007, 2583/M/2007 and 3213/M/2008) considering the facts in the instant previous year are similar to the facts of the previous years and taxing the receipts from TCL as 'Royalty' under Section 9(1)(vi) of the Act as well as Article 13(3)(a) of the India-UK Tax Treaty; Ground number 4 The learned AO has erred in not following the advance ruling (as affirmed by Hon'ble Supreme court) obtained by Indian Space Research Organisation ('ISRO') (a customer of Inmarsat), and taxing the receipts from TCL as 'Royalty' pursuant to the retrospective amendment inserted vide Explanation 5 / 6 to Section 9(1)(vi) of the Act by Finance Act 2012 as well as Article 13(3)(a) of the India-UK Tax Treaty; Ground number 5 The learned AO has not justified in holding that the definition of 'Royalty' by insertion of Explanation 5/6 to section 9(1)(vi) of the Act vide Finance Act, 2012 should also be applied to the definition of 'Royalty' as defined in Article 13 read with Article 3(3) of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l income of Rs.nil for A.Y. 2014-15 was filed by the assessee on 30.09.2015. Subsequently, the case of the assessee was selected for scrutiny assessment under Sec. 143(2) of the Act. 3. During the course of the assessment proceedings it was observed by the A.O that the assessee was engaged in the business of providing telecommunication services and leasing of space segment capacity of navigational transponder, which essentially involves making available a channel (frequency) in air through which the communication signals are transmitted. On a perusal of the records, it was observed by the A.O that the assessee had entered into an agreement with Tata Communications Ltd. (for short TCL ) [earlier known as Vidhesh Sanchar Nigam Limited (for short VSNL )] dated 01.04.1999 (updated in 2004) for providing satellite telecommunication services. Observing, that the receipts from Tata Communication Ltd. (earlier known as VSNL) were in the assessments framed in the case of the assessee for the preceding years taxed as royalty income in its hands, the A.O called upon the assessee to explain as to why the amounts received from TCL may not be similarly taxed during the year under considerat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (WZ), Mumbai. The assessee objected to the proposed treatment of the amounts received by the assessee from TCL as royalty under Sec.9(1)(vi) of the Act and Article 13 of the India-U.K. tax treaty. It was submitted by the assessee that the Tribunal while disposing off its appeals for A.Y. 2000-01 to A.Y. 2005-06, vide its consolidated order dated 14.07.2017, had concluded, that the consideration received by the assessee from TCL was not to be held as royalty. Apart from that, it was submitted by the assessee that the A.O while characterising the amounts received by the assessee from TCL had failed to follow the advance ruling in the case of ISRO Satellite Centre [ISACT] Vs. DIT (Intl. Taxation) (2008) 307 ITR 59 (AAR), wherein the Hon ble Authority for Advance Ruling (for short AAR ) had held that the amount received by the assessee from ISRO in lieu of providing transponder services was not taxable either under the Act or the India-U.K. tax treaty. It was submitted by the assessee that the aforesaid order of the AAR had thereafter been affirmed by the Hon ble Supreme Court and the SLP filed by the revenue was dismissed vide an order dated 31.08.2008 of the Hon ble Apex Court. Also ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d not find favour with the DRP. Observing, that its predecessor panel in A.Y. 2014-15 had upheld the view taken by the A.O that the assessee had a PE in India, it was concluded by the DRP that the activities carried on the land through Land Earth Stations (LES) constituted a PE of the assessee in India. Accordingly, the assessee s claim that it had no PE in India was rejected by the DRP vide its observations recorded at Para 9.3 onwards of its order. As regards the claim of the assessee that the A.O had erred in considering its profitability on an adhoc basis at 30% of its gross receipts from TCL by applying Rule 10 of the Income Tax Rules, 1962, the same too was rejected by the DRP, observing as under: The contentions raised by the assessee have been considered. We find these to be not acceptable for following reasons: i) Nothing has been brought out by the assessee to show that it has maintained India specific accounts. ii) The services being provided by the U.K service provider, that too through the satellites, for use of clients in India, further, the end users being numerous individuals/corporations/bodies resident as well non-resident, all these factors and speci ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rried the matter in appeal before us. The assessee has assailed the assessment framed by the A.O inter alia on three issues viz. (i) that the amounts received by the assessee from TCL were not to be held as royalty under Sec. 9(1)(vi) of the Act and Article 13(3)(a) of the India-U.K. Tax Treaty; (ii) that the AO/DRP had erred in concluding that the Liaison Office (LO) and the Land Earth Station (LES) constituted a PE of the assessee in India; and (iii) that the A.O had erred in alternatively considering the profitability of the assessee on an adhoc basis at 30% of its gross receipts from TCL by applying Rule 10 of the Income Tax Rules, 1962. 8. We shall first deal with the claim of the assessee that the amounts received from providing Satellite Telecommunication Services to TCL (earlier known as Vidhesh Sanchar Nigam Limited) (VSNL) were not to be treated as royalty under Sec.9(1)(vi) of the Act and Article 13 of the India-U.K. Tax Treaty. As observed by us hereinabove, it was the claim of the assessee before the lower authorities that the issue that the amounts received by it from TCL were not to be held as royalty was squarely covered by the order passed by the Tribunal i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... L ), whose name has subsequently been changed to Tata Communication Ltd. (in short TCL ). The receipts from rendering of telecommunication services to TCL were claimed to be not taxable in India; however, the Assessing Officer has taxed the same as Royalty under the Act as well as in terms of the India-UK Double Taxation Avoidance Agreement (in short India-UK DTAA ). The stand of the assessee has been that its receipts from TCL are in the nature of business profits covered by Article 7 of the India-UK DTAA and, in the absence of any PE in India, the same are not taxable in India. It was a common ground between the parties that the manner in which the services have been rendered by the assessee in the instant year is similar to the manner in which the services have been rendered in the past years. Broadly speaking, the following fact-situation asserted by the assessee before the Assessing Officer brings out the mechanics of the manner in which the assessee is providing telecommunication services from outside India and deriving its earning from TCL, the same is reproduced below :- 2.1 Background Inmarsat is engaged in the business of providing telecommunication services ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the royalty issue controversy, it has been pointed out before us that the Tribunal vide its order in ITA Nos. 5102/Mum/2004 others dated 14.07.2017 in the context of Assessment Years 2000-01 to 2005-06 has evaluated the rival stands and have disagreed with the stand of the Revenue that the nature of receipt was Royalty. At the time of hearing, the learned representative for the assessee has taken us through the detailed decision made by the Tribunal in its order dated 14.07.2017 (supra), whose relevant portion we are tempted to reproduce as under :- 10. We have heard the rival submissions and perused the material available on record. We find that the material facts of the present case are largely identical to the facts as considered by AAR in the ruling in the case of ISRO Satellite Centre(2008) 307 ITR 59 (AAR). We note that the reasoning and conclusion on facts similar to the facts in the present proceedings with ISRO which has been followed after a detailed discussion and in fact extracted by the Hon'ble Delhi High Court in the case of Asia Satellite Telecommunications Co. Ltd. (2011) 332 ITR 340(Del.). We note that no arguments have been advanced by the Revenue to r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to the agreement leaves the issue in no doubt about the view favoured. Accordingly we quote here the decision of the Hon'ble Delhi High Court in DIT vs. New Skies Satellite BV cited supra to support the conclusion why the consistent orders of the ITAT on the issue are being followed: - 48. In Commissioner of Income Tax v. Seimens Aktiongessellschaft, [2009] 310 ITR 320 (Bom), the Bombay High Court citing R v. Melford Developments Inc. held that The ratio of the judgment, in our opinion, would mean that by a unilateral amendment it is not possible for one nation which is party to an agreement to tax income which otherwise was not subject to tax. Such income would not be subject to tax under the expression laws in force . *** ** ** While considering the Double Tax Avoidance Agreement the expression laws in force would not only include a tax already covered by the treaty but would also include any other tax as taxes of a substantially similar character subsequent to the date of the agreement as set out in article I(2). Considering the express language of article I(2) it is not possible to accept the broad proposition urged on behalf of the assessee that the law wo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d also held similarly: We are in agreement with the petitioners and in the light of our preceding analyses, discern no textual, grammatical or syntactic ambiguity in Article 14(5), warranting an interpretive recourse. In the circumstances, invoking provisions of Article 3(2) by an artificial insemination of ambiguity (to accommodate an expanded meaning to the DTAA provision), would be contrary to good faith interpretation. A further problematic of contriving an ambiguity to unwarrantedly invite application of domestic law of a contracting State would be that while India would interpret an undefined DTAA provision according to the provisions of the Act, France could do so by reference to its tax code. As a consequence, the purpose of entering into a treaty with a view to avoiding double-taxation of cross-border transactions would be frustrated. 51. Pertinently, this Court in Director of Income Tax v Nokia Networks, 2013 (358) ITR 259 specifically dealt with the question of the effect of amendments to domestic law and the manner of their operation on parallel treaties. The Court delivered its judgment in the context of the very amendments that are in question today; the Expla ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ations. The domestic courts, in other words, are not empowered to legally strike down such action, as they cannot dictate the executive action of the State in the context of an international treaty, unless of course, the Constitution enables them to. That being said, the amendment to a treaty is not on the same footing. The Parliament is simply not equipped with the power to, through domestic law, change the terms of a treaty. A treaty to begin with, is not drafted by the Parliament; it is an act of the Executive. Logically therefore, the Executive cannot employ an amendment within the domestic laws of the State to imply an amendment within the treaty. Moreover, a treaty of this nature is a carefully negotiated economic bargain between two States. No one party to the treaty can ascribe to itself the power to unilaterally change the terms of the treaty and annul this economic bargain. It may decide to not follow the treaty, it may chose to renege from its obligations under it and exit it, but it cannot amend the treaty, especially by employing domestic law. The principle is reciprocal. Every treaty entered into be the Indian State, unless self-executory, becomes operative with ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ding and conclusion drawn by the Coordinate Benches and respectfully following the same conclude that the appeals of the assessee are to be allowed. For ready reference we extract from one of the decisions cited before us. We reproduce the relevant extract from the decision in the case of Alcatel Lucent USA Inc. being the most latest in point of time hereunder: - 5. We have heard the rival submissions and perused the material before us. We find that the basic issue to be decided is as to whether the payments received by the assessee from Reliance can be taxed as royalty in view of the amendment to section 9(1)of the Act. It is said that a DTAA is a result of negotiations between two countries as to the extent to which special concessional tax provisions can be made notwithstanding that there might be a loss of revenue. A plain reading of section 90(2) of the Act makes it clear that the provisions of the DTAA would prevail over the Act unless the Act is more beneficial to the assessee. Therefore, except to the extent a provision of the Act is more beneficial to it, the DTAA will override the Act. This is irrespective of whether the Act contains a provision that corresponds to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to DTAA by virtue of Article 3(12) of the modern treaties; v)Section 9(1)(vi) up to and including Explanation 2 are substantive provisions as inserted by Finance Act 1976 and thereafter, Explanation 3 to 6 are only clarificatory provisions inserted subsequently; and vi) It is not disputed by the revenue that the provisions of DTAA if beneficial to the assessee shall be preferred over the provisions of the Income-tax Act. He further submitted that, the Hon ble Bombay High Court decision in the case of Siemens Aktiongesellschaft (supra) would reveal that, i) Nowhere in the said order, the High Court has held that Amendments/Explanations cannot be read into DTAA as it was not question before the Hon ble High Court; ii) The natures of services rendered in the said case were found to be not Royalty under the DTAA though found to be Royalty under the Act. Those services were found to fall under the expression commercial or industrial profits as per the then DTAA (Old) and therefore could not be taxed in India in absence of PE. The provisions of DTAA being the beneficial to the assessee were preferred over the provisions of the Income-tax Act; iii) In paras 13, 22 and 28 of its order, t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the said software by making it assessable through servers located at Belgium. The Branch sends its data to the Belgium server from where the data gets processed as per the requirement of the banking operations. As per the terms of agreement between the Branch and the Head Office for the usage of software by the Branch, which has been incorporated above, it is evident that the Head Office only has the non exclusive non transferrable rights to use the computer software brought for personal use and clause 16 of the said agreement specifically provides that the Head Office does not have any right to assign, sub license or otherwise transfer the license of this agreement. Thus, the payment by the Branch for use of computer software is not the right in the copy right but only for doing the work from the said software which subsist in the copy right of the software. The branch is using the computer software and the I.T. resources installed at Belgium for which the payment is made by the Head Office towards the use of such software license. Since the Branch is using the same software for the purpose of business operations, the Head Office allocates the said expenditure on a prorata basis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ayment has to be made in consideration thereof. It is not the case of the Revenue that the Head Office has provided any copy right of software or any copyrighted article developed by the Head Office for the exclusive use of the assessee for, which the assessee is making the payment along with the mark up exclusively for the purpose of royalty. If the payment for license for the software which is installed in the Head Office is being made by the Head Office, then any allocation of cost and reimbursement thereof by the Branch to the Head Office cannot be termed as independent payment for the purpose of royalty. To fall within the ambit of royalty under Article, the payment should be exclusively qua the use or the right to use the software exclusively by the Branch. The character of the payment under the royalty transactions depends upon the rights that the transferee acquires in relation to the use and exploitation of the software programme. Here, there is no such right which has been acquired by the Branch in relation to the usage of software, because the Head Office alone has the exclusive right of the license to use the software. Thus, the reimbursement of the data processing co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a processing. Be that as it may, even if stand of the revenue is to be upheld and it is to be concluded that the payment is made for software per se, that does not lead to taxability of receipt in the hands of the Australian company either. It is also by now settled that the payment for software is for a copyrighted article and not copyright per se, and, therefore, is not covered by the scope of payment for copyright. The authority for this proposition is contained in Special Bench decision in the case of Motorola Inc. v. Dy. CIT (2005) 95 ITD 269 (Del)(SB), Samsung Electronics Company Ltd. v. ITO (2005) 94 ITD 91 (Bang), and Lucent Technologies Hindustan Ltd. v. ITO (2005) 92 ITD 366 (Bang). It is not even the revenues case that the payment in question is not (sic) for the use of, or right to use of, patent, design or model, plan, secret formula or process, or trade mark. In any event, having perused these classifications and having considered the facts before us, we are of the considered view that the payment does not fit into any of these classifications. It is, however, contended that the impugned payment is covered by the residuary clause, i.e., other like property or right . ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he segment of this economic activity and consider that amount in isolation, for the purpose of deciding character of that amount. Therefore, neither the impugned payment can be said to be towards use of, or right to use of, the mainframe computer, nor is it permissible to allocate apart of the impugned payment, as attributable to use of, or right to use of, mainframe computer. Accordingly, the provisions of article 12(3)(b) cannot have any application in the matter. 18. Insofar as the reliance placed by the learned Departmental Representative on the decisions of the Madras High Court and also the scope of royalty as given in Explanation 4 and 5 to section 9(1)(vi) brought in statute by the Finance Act, 2012 are concerned, we find that the same is not tenable for the reason that once the assessee has opted for the benefit of the DTAA, then there is no requirement for resorting to the definition and the scope of royalty as given in section 9(1)(vi).The said amendment cannot be read into the treaty and will not influence the definition of royalty , as given in Article 12(3). This proposition is squarely covered by the decision of the Bombay High Court in Siemens Aktiongesells ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... me would not be subject to tax under the expression laws in force . While considering the Double Tax Avoidance Agreement the expression laws in force would not only include a tax already covered by the treaty but would also include any other tax as taxes of a substantially similar character subsequent to the date of the agreement as set out in article 1(2). Considering the express language of article 1(2) it is not possible to accept the broad proposition urged on behalf of the assessee that the law would be the law as applicable or as define when the Double Tax Avoidance Agreement was entered into. 49. It is essential to note the context in which this judgment was delivered. There, the Court was confronted with a situation where the word royalty was not defined in the German DTAA. Following from our previous discussion on the bifurcation of terms within the treaty, in situations where words remain undefined, assistance is to be drawn from the definition and import of the words as they exist in the domestic laws in force . It was in this context that the Bombay High Court held that they were unable to accept the assesse s contention that the law applicable would be the law ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y the orders for the earlier years. Considering the above and respectfully following the orders of the Tribunal in the cases of Antwerp Diamond Bank NV Engineering Centre (supra) and Antwerp Diamond Bank NV(supra), we decide the effective ground of appeal in favour of the assessee. 10.2 In view of the above reasoning on facts and law we find that the judicial precedent as cited before us and as discussed and considered at length by the Hon'ble Delhi High Court in facts as upheld in the ruling of AAR in the case of ISRO (supra) is also found supported by the Hon'ble Jurisdictional High Court supports the view taken and the decision of the Hon'ble Madras High Court stands considered and the decision of the Hon'ble Karnataka High Court it is noted having been rendered on 9th June, 2014 did not have the benefit of the view taken by the Hon'ble Delhi High Court in the order of the Coordinate Bench in Viacom 18 the benefit of the said decisions was not available and in the said decisions relied upon by the Revenue, the similarity of the peculiar facts with the facts of AAR s ruling in ISRO as considered by the Hon'ble Delhi High Court was not considered. Thu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aim of the assessee before the lower authorities that as the LES was owned and operated by TCL and not by the assessee, therefore, on the said count it could not have been held to have constituted a PE of the assessee in India. Also, as is discernible from the orders of the lower authorities, the A.O/DRP had observed that the Liaison Office (LO) constituted a PE of the assessee in India. As observed by us hereinabove, it was the claim of the assessee that as the LO had not carried out any activities in India, it could therefore not be treated as the assessee s PE in India. The ld. A.R submitted that the factual position qua the issue as to whether the assessee had a PE in India on both of the aforesaid counts had been looked into by the Tribunal while disposing off the appeals of the assessee for the preceding years i.e A.Y. 2007-08 to A.Y. 2012-13, vide its order dated 12.12.2018. The ld. A.R taking us through the aforesaid order of the Tribunal in context of the issue under consideration submitted, that as the factual matrix during the year under consideration remained the same as was there before the Tribunal in the aforementioned preceding years, hence, the view therein taken b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ys a critical role in providing telecommunication services to the Land Earth Service Operator (LESO), which is VSNL. The Assessing Officer noted that the said equipment is installed and maintained by the assessee and that assessee also has a liaison office in India. The Assessing Officer notes that the activities of the liaison office cannot be said to be just a mere liaisoning work in India . The Assessing Officer further notes that the employees/staff of the liaison office provide various services to the assessee-company in connection with the contract with VSNL. Therefore, the Assessing Officer concluded that the location of SSMS equipment in India and the presence of the liaison office in India constituted a PE of the assessee in India and, therefore, the payment received by the assessee from VSNL was attributable to the assessee s PE in India. Thus, notwithstanding his stand that the receipts from VSNL were in the nature of Royalty, the Assessing Officer held that even going by Article 7 of the India-UK DTAA (by which such receipts are treated as business profits), because of the presence of a PE in India, income arising from receipts from VSNL was attributable to a busine ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e as a PE. 12. So far as the reference made by the lower authorities to SSMS equipment is concerned, the learned representative for the assessee pointed out that in the past years also such equipment was existing, but no adverse view has been taken and, in any case, so far as the instant period is concerned, the assessee has foregone the use of such equipment for providing services. In this context, our attention has been drawn to page 64of the Paper Book wherein a communication dated 28.04.2005 is placed which is addressed to VSNL whereby it is informed that the facility of SSMS equipment would not be used for providing services w.e.f. 17.06.2005. It has been pointed out that such change was on account of an operational requirement as assessee has launched its 4th generation satellite which was thereafter used to provide the services which were earlier being provided by the use of SSMS equipment. 13. It was, therefore, contended that it is wholly erroneous on the part of the lower authorities to hold that the liaison office and SSMS equipment constituted a PE of the assessee in India. 14. On the other hand, the ld. DR appearing for the Revenue defended the stand of the lo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ibited from carrying out any business or trading activity. At the time of hearing, it was also stated by the learned representative for the assessee at Bar that till now there is no infringement or any other adverse view taken by the RBI qua the activities which are being carried out by the liaison office in India. This singular aspect is quite pertinent to establish that if the Assessing Officer is to hold to the contrary, i.e. to say that the liaison office was undertaking activities in the nature of business or commerce, then, the onus was on him to establish so. Another notable feature is that the liaison office of the assessee has been in existence since 1999 and, even in the past assessment years when the Assessing Officer disagreed with the assessee on the nature of the receipts from VSNL/TCL, there was no adverse conclusion with regard to the nature of activities being carried out by the liaison office. The Hon'ble Delhi High Court in the case of Mitsui Co. Ltd. (supra) noted that in a case where assessee was found adhering to the conditions imposed by the RBI for running of a liaison office, it increases the burden of the Revenue to show that notwithstanding the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... LO in India, which has been set-up with the approval of the Reserve Bank of India ( RBI ). All the activities of the LO are in accordance with the RBI s approval. The LO undertakes liaison and coordination activities on behalf of the Assessee. There are no income generating activities carried out by the LO in India. The LO was engaged in coordinating a pilot project to assist VSNL and Department of Telecommunications to provide satellite based village public telephone in rural areas. Presently, the LO interacts with the Indian Government to get information and coordinates with the regulatory authorities in connection with the use of Inmarsat s services in India. The LO s activities do not play any role in the rendering of telecommunication services to VSNL. 4.3 Based on the above, Inmarsat submits that the presence of the SSMS and the LO in India does not constitute a PE of Inmarsat in India. 16. The aforesaid fact-situation asserted by the assessee has not been countered by the DRP in any manner. In fact, the learned representative for the assessee has pointed out that with regard to the discontinuation of the use of SSMS equipment, communication to VSNL dated 28.04.2005 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e PE on the assessee in India, remains the same, as are involved in the appeal of the assessee for the year under consideration, we therefore respectfully follow the aforesaid order of the Tribunal. Accordingly, in the backdrop of our aforesaid observations, we herein conclude that the assessee did not have any PE in India during the year under consideration. The Grounds of appeal Nos. 6 7 are allowed in terms of our aforesaid observations. 16. We shall now deal with the contention of the assessee that the AO had erred in considering its profitability on an adhoc basis at 30% of its gross receipts from TCL by applying Rule 10 of the Income Tax Rules, 1962. We find that the aforesaid issue pertains to the computing of the income of the assessee attributable to its PE in India. Since we have upheld the primary stand of the assessee that there does not exist any PE of the assessee in India, thus, the dispute in Ground of appeal No. 8 having been rendered as merely academic is dismissed as infructuos. 17. The assessee has assailed the assessment order on the ground that the A.O had erred in levying surcharge, secondary education cess and higher secondary education cess over ..... X X X X Extracts X X X X X X X X Extracts X X X X
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