Arm's length principle bars further profit attribution on a mere permanent establishment allegation, making reassessment unsustainable.

Where reassessment was based only on an alleged permanent establishment and income attribution, the Tribunal held that the foundation of the reassessment no longer survived after the Supreme Court quashed the underlying notices. The Tribunal noted that, once the arm's length principle had been satisfied, no further profit attribution could be made merely on the basis of a permanent establishment allegation. As the impugned reassessment orders stemmed from those quashed notices, they could not be sustained and the appeals became infructuous.

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Issues: Whether the reassessment proceedings and resulting assessment orders survived after the Supreme Court quashed the reassessment notices on the ground that, once the arm's length principle had been satisfied, no further profit attribution could be made on the basis of an alleged permanent establishment.

Analysis: The reassessment for the subject years had been founded on the allegation of a permanent establishment in India and the consequent attribution of income. The Tribunal noted that the Supreme Court had already quashed the reassessment notices in the connected matters, holding that where the arm's length principle has been satisfied, no further profit attribution can be made merely on the basis of a permanent establishment allegation. Since the reassessment orders under challenge arose from those notices, the foundation of the appeals no longer survived.

Conclusion: The reassessment orders could not be sustained and the appeals became infructuous.

Final Conclusion: The appeals were allowed because the reassessment notices had been quashed and the impugned reassessment orders ceased to have any operative basis.

Ratio Decidendi: When the arm's length principle has been accepted and the reassessment is founded only on a permanent establishment allegation, the reassessment notice and consequential order cannot survive.

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