2013 (2) TMI 745

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....ndia were determined arbitrarily by estimating the business income at 90% of the business profits and also non consideration of details placed on record, levy of interest etc. in its six grounds of appeal raised. 2. At the outset the learned Counsel requested for restoring the appeal afresh to the file of AO on the reasons stated by him without going to the merits of the case about the PE and the attribution of profits. The reasons for request for restoration are that the jurisdictional Commissioner was on the Dispute Resolution Panel which heard the objections filed by assessee against the draft assessment order. Following the principles laid down by the Hon'ble Uttarakhand High Court in the case of Hyundai Heavy Industries Ltd. Vs.....

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....onsidered. 4. In support of the above contentions, the learned Counsel placed on record the orders of the posting of the jurisdictional Commissioner, the papers submitted to AO/DRP on the above issues and request for cross examination which were not considered. In view of this, the learned Counsel's submission was that the order be restored to the file of AO for fresh consideration without going to the merits of the grounds raised on which detailed submissions are required. The learned Counsel also placed on record certain documents in the form of financial statements of Ingram Micro (India) Pvt. Ltd for the year ended March, 2008 and its extracts and draft orders in support of the contentions about the rebates/incentives received from t....

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....e Hon'ble Delhi High Court in the case of Rolls Royce Singapore (P.) Ltd. Vs. Assistant Director of Income-tax, 13 Taxmann.com 81, dated 30.8.2011 to contend that assessee cannot agitate if he has not undertaken the FAR analysis. It was further submitted that the entire income earned by the Singapore Company was from the operations from India and so PE profits were attributed at 90% after analyzing the voluminous documents. Tt was the learned DR's submission that there is no need to set aside the issue to the file of the DRP/AO and the issue can be decided on merits. 7. Countering the contentions of the learned DR, the learned Counsel submitted that non-adherence to the principles of natural justice, non examination of the contention....

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....ITAT, following the principles laid down by the Hon'ble High Court of Uttarakhand in the case of Hyundai Heavy Industries Ltd. Vs. Union of India, 201 Taxmann.com 237, is setting aside the orders of the DRP with a direction to reconstitute the DRP without the jurisdictional Commissioner and pass fresh orders. Therefore, on first objection itself the order has to be set aside to the file of the DRP. 9. However, the plea is to restore to the file of AO as the other two issues regarding appropriately remunerating Indian entity at arms length and allowing the cross examination of the persons whose statement was recorded and used against assessee are to be undertaken by AO. Even though AO was seized of the matter of receiving rebates/ince....

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....y on record that assessee has made the request before AO as well as the DRP on this issue. Therefore, we direct AO to allow the assessee to cross examine the individuals whose statements were recorded and were relied upon by the Revenue so that assessee can contest/justify/accept the statements. 10. In view of this, accepting the request of the learned Counsel, we set aside the orders of AO and DRP and restore the entire assessment to the file of AO, leaving the issues contested now open for examination at a later time, if required. Since the entire assessment was restored to the file of AO, there is no need to discuss the issue of PE and attribution of profits now, which may have to be considered when it arises in the re-assessment proc....