Composite contract attribution to India upheld, with 7% profit estimation maintained on linked contract receipts.

Income from composite contract arrangements was attributed to India because the linked obligations were examined together, and the presence of a permanent establishment supported taxation of the related profits in India. The Tribunal followed its earlier view in the assessee's own case for the preceding year, noted that no fresh material had been produced despite opportunity, and found no factual difference warranting a departure. The earlier profit estimate of 7% on the relevant receipts was therefore maintained, with no basis to disturb the existing assessment approach.

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Issues: Whether the assessee's income from the relevant contracts was rightly attributed to India and whether the profit was correctly estimated at 7% for taxation purposes.

Analysis: The Tribunal noted that the High Court had already sustained the view that the contracts were to be examined as a composite arrangement and that the assessee had not produced any fresh material despite being given an opportunity. Relying on the earlier decision in the assessee's own case for the immediately preceding assessment year, the Tribunal found no difference in the facts. It accepted the earlier reasoning that the activities connected with the contracts, including the presence of a permanent establishment and the execution of linked obligations in India, justified attribution of taxable income in India. The Tribunal also found no basis to disturb the earlier estimation of profit at 7% on the relevant receipts.

Conclusion: The issue was decided against the assessee and in favour of the Revenue; the estimation of taxable profit at 7% was upheld.

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