2015 (10) TMI 1887

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.... 1 : 1 The Commissioner of Income-tax (Appeals) has erred in confirming the action of the Assessing Officer of attributing the profit on the direct sales made in India by the Head Office of the Appellant as the profit of the Indian Branch. 1 : 2. The Appellant submits that considering the facts and circumstances of its case and the law prevailing on the subject, the profit on the direct sales made by its Head Office cannot be attributed to the operations carried out by the Indian Branch and hence no amount is includible in the total income and the Commissioner of Incometax (Appeals) ought to have held as such. I : 3. The Appellant submits that the Assessing Officer be directed to delete the addition so made by him and to r....

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.... offered to tax by the Appellant ought to be reduced and the Commissioner of Income tax (Appeals) ought to have held as such. 3 : 3. The Appellant submits that the Assessing Officer be directed to reduce the management fees offered to tax while computing its total income for the year. 4: 0 . Re.: Addition made u/s.40(a) (ia) of the Income-tax Act, 1961: 4: 1. The Commissioner of Income tax (Appeals) has erred in confirming the action of the Assessing Officer of disallowing a sum of Rs. 23,08,546/u/ s. 40(a)(ia) of the Income tax Act,1961. 4:2 The Appellant submits that considering the facts and circumstances of its case and the law prevailing on the subject no disallowance whatsoever is called for u/s. 40....

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....f Reserve Bank of India. 3.1. During the year under consideration on the sales made by the Head office through the Indian Branch, the profits/loss on such sales has been shown in the Profit & Loss account of the assessee for the year under consideration in respect of its Indian Branch. 3.2. As per the notes on accounts forming part of the balance sheet of the Indian Branch, it is explained that the Head Office had entered into an agreement with the Indian Branch for providing marketing support for the sales made by the Head Office directly in India for which the branch has received a management fees of Rs. 37,80,857/- in respect of the sales. 3.3. The Head Office has sold the same medical products directly in India amounting to USD....

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....r: "29. We have heard the arguments and have perused the order of the coordinate Bench in the case of the assessee for assessment years 1999-2000 & 2000-01, wherein the coordinate bench had accepted the estimate of gross profit attribution at 10% in place of 20%. We have also perused the TP report and the computation, wherein, the TPO has accepted the gross profit rate declared at 8.81%. In such a situation, acceptance of gross profit attribution of India Branch @ 20% does not inbspire confidence. 30. We, therefore, accept the gross profit margin declared by the assessee for the year under consideration." 8.1. Further at para-39 to 42, the Tribunal has made the following observations: "39. Before us, the AR sub....