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TMI Blog2019 (2) TMI 2044X X X X Extracts X X X X X X X X Extracts X X X X ..... this appeal, assessee has raised the following Grounds of appeal :- "1. On the facts and circumstances of the case and in law, the Hon'ble Dispute Resolution Panel ('Hon'ble DRP')/Learned Assessing Officer ('Ld. AO') erred in further attributing Rs.5,15,05,000 as income of the Permanent Establishment ('PE') of the Appellant is taxable in India. 2. On the facts and circumstances of the case and in law, the Hon'ble DRP/Ld. AO erred in not appreciating that the Appellant has attributed the appropriate profits having regard to the operations that the carried out in India as required under section 9 of the Income-tax Act, 1961 ('IT Act'). The Appellant prays that the return of income of the Appell ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ore prays that the profit attributable to the PE based on the operations carried out in India and also, attributable to the risks undertaken by the PE be accepted. 6. On the facts and circumstances of the case and in law, the Hon'ble DRP / Ld. AO erred in rejecting the transfer pricing study and computation of arm's length price in the hands of Hempel Paints (India) Pvt. Ltd. ('Hempel India') when the same has been accepted in the hands of Hempel India in assessment order passed under section 143(3) of the IT Act. The Appellant therefore prays that the Ld. AO be directed to treat the compensation received by Hempel Singapore PE as at arm's length. 7. On the facts and circumstances of the case and in law, the Hon' ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Assessee has an Agency Agreement with Hempel India w.e.f. 01.04.2013 whereby Hempel India assists assessee in selling of products into India to third party customers. The assessee earns sales revenue from sales made in India, and in consideration of services rendered by Hempel India, assessee pays commission to the Indian subsidiary. As per the assessee, the commission charged by Hempel India is under the arm's length price principle. In terms of the Agency Agreement, and the rights and responsibility provided by assessee to Hempel India, an agency PE of the assessee in India was created in terms of Article 5(4) of the India-Singapore Tax Treaty. Assessee's stand before the Assessing Officer was that it was computing income attribut ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er dated 22.09.2017 and thereafter, the Assessing Officer has finalised the assessment under Section 143(3) r.w.s. 144C(13) of the Act dated 27.10.2017. In this background, assessee is in appeal before us. 5. Before us, the learned representative for the assessee has adverted to a short point based on the proposition upheld by the Hon'ble Supreme Court in the case of M/s. Morgan Stanley & Co. Inc in Civil Appeal No. 2914 of 2007 & Anr. dated 09.07.2007, and which has also been later applied by the Hon'ble Bombay High Court in the case of SET Satellite Singapore Pte Ltd. vs DDIT in ITA No. 944 of 2007 dated 22.08.2008. The plea of the assessee is to the effect that the Indian subsidiary, i.e. Hempel India, has been remunerated by th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the impugned addition to the returned income is untenable. 6. On the other hand, the ld. DR for the Revenue has reiterated the addition made by the Assessing Officer, so however, the factual matrix brought out by the learned representative has not been disputed. 7. We have carefully considered the rival submissions. The appellant before us is a resident of Singapore and has business activities in India. Admittedly, it has appointed its 100% owned subsidiary, Hempel India as a sales agent, who is rendering sales support services. It is compensating its Indian subsidiary at cost plus 8.17% mark-up as commission on sales effected through the agent in India. There is no dispute about the existence of assessee's agency PE in India. A fore ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e fact that for the instant assessment year, the commission has been found to be at arm's length price in the hands of the recipient Indian subsidiary, i.e. Hempel India in view of the assessment order dated 27.10.2017 (supra). 8. Before parting, we may also refer to the judgment of the Hon'ble Delhi High Court in the case of DIT vs BBC Worldwise Ltd., ITA Nos. 1341 of 2010 & ors. dated 30.09.2011, which has been relied upon by the assessee before us. In the said case also, the aforesaid proposition was sought to be canvassed on behalf of the assessee therein. The Revenue opposed the same by pointing out that the relevant transfer pricing reference was not in the case of the non-resident assessee therein, but in the case of the Ind ..... X X X X Extracts X X X X X X X X Extracts X X X X
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