2011 (12) TMI 285

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....d, submitted that assessee is a company incorporated under the Laws of Japan. It is engaged in the business of trading in steel products. It is a non-resident for the purpose of IT Act, 1961 and a tax resident in Japan for the purpose of the agreement for avoidance of Double Taxation (DTAA) signed between India and Japan. 2. The assessee has opened a Liaison Office (LO) in India as per the approval granted by the Reserve Bank of India vide its letter dated 16.4.2003. RBI permitted the LO to undertook only liaison activities in India i.e. to act as a communication channel between the Head Office and other parties in India. According to the assessee, the LO was prohibited from undertaking any commercial or business activities, therefore, w....

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....pellant to the contrary Rs. 69,95,13,449 50% of profits estimated to be attributable to PE(A) Rs. 34,97,56,724 Less: Deduction for expenditure incurred by the LO in India restricted to 50 per cent of such expenditure on the ground that requisite evidence and business exigency not furnished (B)  Rs. 2,39,51,948 Taxable Income (A-B) Rs. 32,58,04,776 3. The proposed draft order was sent to the Learned Dispute Resolution Panel. Learned Dispute Resolution Panel has provided an opportunity of hearing to the assessee and issued directions to the Assessing Officer for finalization of the draft. 4. The learned counsel for the assessee while impugning the order of the learned DRP submitted that the liaison office maint....

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....han 10%. He made a reference to the decision of Madras High Court in the case of Annamalais Timber Trust & Co. v. CIT [1961] 41 ITR 781. He also relied upon the decision of Hon'ble Delhi High Court in the case of Rolls Royce Singapore (P.) Ltd. v. Asstt. DIT [2011] 202 Taxman 45/13 taxman.com 81. He also submitted that interest under sec. 234B would not be chargeable upon the assessee because the entire disputed tax liability is deductible at source under sec. 195 of the Income-tax Act, 1961. He made a reference to a large number of decisions referred in paragraph 12 of the stay application at page 17. He submitted that if all these factors are taken into consideration then assessee has a good prima facie case. He prayed for stay of the out....