2015 (10) TMI 161

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....to the addition of Rs. 44,22,168/- on account of inclusion of reimbursement of expenses for the purpose of computing commission income. 3. At the very outset, the ld. Counsel for the assessee stated that this issue has been decided by the Tribunal in assessee's case for A.Y. 2007-08 in ITA No. 8950/Mum/2010 dtd. 28-02-2014. The ld. D.R. fairly conceded to this. 4. We have carefully perused the orders of the authorities below and the decision of the Tribunal in assessee's own case in ITA No. 8950/Mum/2010. The Tribunal has considered this issue at para 11 on page 7 of its order which read as under:- "11. If the aforesaid Schedule 'A' categorically provides that commission is not to be computed on the sale orders which requires the procure....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....unal in A.Y. 2007-08. Ground No. 1 is treated as allowed for statistical purpose. 6. Ground No. 2 relates to the addition of Rs. 24,46,542/- on account of attribution of profits to Permanent Establishment. 7. Onceagain the ld. Counsel for the assessee stated that the issue has been decided by the Tribunal in assessee's own case in A.Y. 2007-08 vide ITA No. 8950/Mum/2010. The ld. D.R. fairly conceded to this. 8. We have carefully perused the orders of the authorities below and the decision of the Tribunal in assessee's own case in ITA No. 8950/Mum/2010. We find that an identical issue has been decided by the Tribunal vide para 13 on page No. 8 of its order which read as under:- "13. On perusal of the assessment order, it is seen that the....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....he co-ordinate Bench, we hold that the assessee branch does not constitute PE of Varian-Italy and therefore the addition of Rs. 24,46,542/- cannot be taxed in the hands of the assessee. Ground No. 2 is accordingly allowed. 10. Ground No. 3 relates to the Transfer Pricing adjustment of Rs. 87,34,979/-. 11. Following heads of expenditure were considered for allocation:- Sr. No. Particulars Amt (In Rs.) 1 Rent 94,79,508 2 Depreciation 33,52,935 3 Staff welfare 19,91,869 4 Travelling and Conveyance expenses 3,45,14,589 5 Communication expenses 35,77,100 6 Electricity 7,54,401 7 Office maintenance 5,20,524 8 Insurance charges 19,61,101 9 Other Misc. expenses 10,08,491 12. The TPO observed that for the allocation ....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....s. 87,34,979/-. Aggrieved by this, the assessee is before us. 13. The ld. Counsel for the assessee reiterated what has been stated before the lower authorities. Per contra, the ld. D.R. strongly supported the findings of the TPO. 14. We have carefully perused the orders of authorities below. The assessee has used allocation key of employee head account. The expenses like rent, depreciation, electricity, insurance charges, office maintenance and other miscellaneous expenses have no co-relation with the number of employees. On the contrary, these expenses have a direct bearing to the revenue generation. As per Rule 10-B(1) of the Act, determination of ALP u/s 92CA(2) of the Act, the ALP in relation to an international transaction has to be ....