9911796707
TMI Blog2019 (11) TMI 1600X X X X Extracts X X X X X X X X Extracts X X X X ..... lant respectfully craves leave to prefer an appeal against the assessment order issued by the learned Deputy Commissioner of Income-tax - 2(1)(I) (learned AO') tinder Section 143(3) read with Section I 44C( 13) of the Act ('Assessment order'). in pursuance of the directions issued by the Dispute Resolution Panel - ('Hon'ble DRP'), Mumbai. On the facts and in the circumstances of the case and in law, the learned AU based on the directions of Hon'ble DRI has; Wrong determination of the total taxable income of the appellant 1. erred in determining the total income of the Appellant at Rs. 6,36,07,608 as against 'Nil' income declared in the return of income filed by the Appellant for the subject AY; Non-t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... out appreciating the fact the definition of the term 'royalty' under the India- Israel Tax Treaty is restrictive in nature as compared to the 'royalty' definition tinder the Act; Wrongly treating Celltick India as a Dependent Agent Permanent Establishment 'DAPE') of the Appellant in India and taking the income of the Appellant as business profits' under the India-Israel Tax Treaty 6. erred in holding that Celltick India is the DAVE of the Appellant in India under Article 5 of the India-Israel Tax Treaty and taxing the income received by the Appellant as 'business profits' under Article 7 of the India-Israel Tax Treaty; 7. erred in holding that Celliick India is the DAVE of the Appellant in India under A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... stomers in India to the alleged DAVE. without appreciating the fact that the said receipts are not attributable to the alleged DAVE of the Appellant; 12. erred in estimating the profits of the alleged DAPE of the Appellant at 40 percent of the gross revenues of the Appellant, on an arbitrary, and ad-hoc basis; Short rant of TDS credit 13. erred in granting snort credit of the IDS of Rs. 49,57,443 while computing the tax liability of the Appellant for the subject AY: Wrong computation of interest under Section 234A of the Act 14. erred in computing interest under Section 234A of the Act; Wrong computation of interest under Section 234B of the Act 15. erred in computing interest under Section 234B of the Act; Initiation of penal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 19,023/- which was not liable to be taxable as "Royalty‟ or "Fee for Technical Services‟ or "Business Profits‟. The AO issued the notice to the assessee company and after the reply of the assessee, the AO considered the 50% of the receipt as being attributable to the activities of the PE in India. Thus, out of the total receipt of Rs. 15,90,19,023/-, 50% was considered as being attributable to the assessee PE in India which comes to the tune of Rs. 7,95,09,511/-. The AO also assessed the 20% of such receipt as expenditure incurred and accordingly quantified the total income liable to be taxed in India in sum of Rs. 6,36,07,608/-. Against the draft assessment order, assessee raised the objection before the DRP and finally p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ive from March, 2011, a copy of which has been placed in the Paper Book at pages 5 to 18, it emerges that the price realized from the ultimate customer is shared between the assessee and its Indian subsidiary, i.e. Celltick India, on 50-50 basis. The Assessing Officer has characterised such receipts as 'Royalty' in the draft assessment order, whereas the DRP treated the same as 'business profits' in terms of Article 7 of India-Israel Tax Treaty. Be that as it may, for the present, the issue relating to characterisation of income is not being contested by the assessee as it has sought to challenge the untenability of the addition only on the basis of the proposition that once 'arm's length principle' has been satisfied qua the relevant trans ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Accordingly, it was held by the Hon'ble Supreme Court that the 'arm's length principle' stood satisfied and, therefore, no further profits could be attributable even if there existed a PE of the foreign assessee in India. In our considered opinion, the manner in which the proposition has been applied by the Hon'ble Supreme Court in the case of E-Funds IT Solution Inc. (supra) is clearly attracted in the present case too. In the present case also, the transactions of the assessee with its Indian subsidiary, i.e. Celltick India, have been found to be at an arm's length price by the income-tax authorities in the case of the Indian subsidiary, i.e. Celltick India for the instant assessment year. 8. In view of the aforesaid discussion ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
