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TMI Blog2018 (1) TMI 1705X X X X Extracts X X X X X X X X Extracts X X X X ..... umbai. 2. Since all the issues involved in these appeals /cross objections are common, therefore, they have been clubbed, heard together and a consolidated order is being passed for the sake of convenience and brevity. Cross Objection No. 32/Mum/2010 (AY 2006-07) 3. First of all we take up Cross Objection No. 32/Mum/2010 (AY 2006-07) as lead case. The grounds of cross objection are as under:- 1. Without prejudice to the judgment of the Hon. CIT (A), wherein it is held that the assessee has no PE in India hence its income is not taxable in India, even if it is held that assessee has FE in India, the income of the assessee is not taxable in India as the assessee has paid arms length remuneration I commission to its Agent in India having ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or dealing with the issue of, whether there is PE or not and no addition on this count can be made in the case of assessee. When these submissions were confronted to the Ld. DR, he fairly conceded the position as regards to the cross objections filed by the assessee. Keeping in view the above facts, we have decided to deal with the cross objection filed by the assessee. In this respect, Ld. AR appearing on behalf of the assessee submitted that identical issue has already been decided by the Coordinate Bench of Hon'ble ITAT in ITA No. 8862/Mum/10 for AY 2007-08. The operative portion of the order of Hon'ble ITAT is contained in para no. 4 to 8 which is reproduced below:- 4. The learned Counsel for the assessee stated that no adjustment o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . eFunds International (India) Pvt. Ltd. is a wholly owned subsidiary of IDLX Holdings BV, Netherlands. IDLX is a wholly owned subsidiary of eFunds Corp. The major international transactions undertaken by the assessee during the year is given below: S.No Description of transaction Method Value (In Rs.) 1. Financial Shared Services (Back Office) TNMM 33.9 Cr. 2. Call Center Services (Shared Service Centre) TNMM 88.03 Cr. 3. Software Development (Off-shore for call centres) TNMM 57.58 Cr. In addition to the above the assessee has also provided software development services to overseas eFunds group entities. The international transactions undertaken by the assessee were examined vis-a-vis the method applied by the as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ut only those which have economic nexus with PE in India. A foreign enterprise is liable to be taxed in India on so much of its business profit as is attributable to the PE in India. The quantum of taxable income is to be determined in accordance with the provisions of the IT Act. All provisions of the IT Act are applicable, including provisions relating to depreciation, investment losses, deductible expenses, carryforward and set-off losses, etc. However, deviations are made by DTAA in cases of royalty, interest, etc. Such deviations are also made under the IT Act (for example Sections 44-BB, 44-BBA, etc.). 36. Under the impugned ruling delivered by AAR, remuneration to MSAS was justified by a transfer pricing analysis and, therefore, no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 's appeal, it is admitted fact that, similar to ground which has been decided in the assessment year 2007-08. Therefore, in view of the finding given there in, we hold that no further income chargeable to tax in India can be said to be attributable to the assessee for the reasons that the transaction between the assessee and PE has been found at arm's length price and for this year also the TPO's order in case of the assessee and Taj India has been placed on record wherein the transaction has been accepted at arm's length price. Thus, ground No. 1 is dismissed." 6. In view of the above, the learned Counsel for the assessee argued that in case alternate arguments of the assessee is accepted that no further income chargeabl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... case, we find that once no income chargeable to tax in India is attributable to the assessee for the reason that the transaction between the assessee and its AE has been found at arms length price, no further income chargeable to tax in India can be said to be attributable on account of PE. Accordingly, this issue is squarely covered in favour of assessee by the decision of Hon'ble Supreme Court in the case of E-Funds IT Solution Inc. (supra) and also co-ordinate Bench decision in the case of Taj TV Ltd. (supra) and Z. TV USA INC, ITA No. 8862/Mum/10 for AY 2007-08. Respectfully following the same, we allow the cross objections of the assessee. Since we have allowed the cross objection of the assessee, therefore the ground raised by the de ..... X X X X Extracts X X X X X X X X Extracts X X X X
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