AI Drafter 
TaxTMI 
TaxTMI 
2018 (9) TMI 968
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.... India and attribution of income has not challenged the said findings. 4. For convenience and to examine the contentions raised, we would reproduce the "reasons to believe" recorded by the Assessing Officer for the Assessment Year 2008-09. Reasons to believe recorded by the Assessing Officer for other years were identical on facts, except for change/difference in figures. The "reasons to believe" for the Assessment Year 2008-09 read as under:- "A survey in this case was conducted on 24/06/2010. During the course of survey it was found that M/s Samsung India Electronics Ltd is a subsidiary of M/S Samsung Electronics Co. Ltd., South Korea. M/s Samsung India Electronics Ltd is in the business of manufacturing as well as trading of consumer electronics. The items manufactured by the company are washing machine, televisions, air-conditioners, refrigerators and mobile phones. These items are manufactured under the technical assistance of the present (sic. parent) company for which the parent company receives fees for technical services. The parent company M/s Samsung Electronics Co Ltd, South Korea has not paid any royalty for use of its brand name 'SAMSUNG' by the subsidia....
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....erent global subsidiaries. (v) In deciding which product is to be imported or traded a confirmation is required from the parent company. (vi) The purchase price of an imported item is decided by a reverse calculation in which first a tentative sale price is determined there after taking into account the dealer margins and the Indian company's overhead the purchase price is negotiated with the headquarters i.e. Samsung Korea. (vii) (vii) Even the sale price of the products manufactured in India is decided after discussion with the headquarters. (viii) From the above it can be seen that the Indian company's office is being used as place of management for South Asia operations by the parent company M/s Samsung Electronics Co. Ltd, South Korea therefore the Indian company would constitute PE of the foreign parent company under Article 5(2)(a) of the DTAA and a part of income from sales in South Asian countries such as Bangladesh, Nepal, Bhutan and Maldives should be attributed to Samsung Electronics, Korea. (ix) Further, it can be inferred from the above that the Indian company is acting as a dependent agent of the foreign company in....
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....m the software operations, as is accepted in paragraph 2.2 in the grounds of appeal. Income earned by the appellant from the Indian subsidiary by way of fee for technical services and royalty was not disclosed and included in these returns. Thus, the returns were in a name with prefix "India Software Operations" and were in respect of taxable income earned by the branch office in the said operations as a distinct and separate assessee. Pertinently, the appellant-assessee in response to the notices under Section 147/148 of the Act had filed returns of income for the assessment years i.e. 2004-05 to 2006-07, 2008-09 and 2009-10 including and accounting for fee from technical services and royalty received from the Indian subsidiary. This income though earned and taxable in India, had not been disclosed and accounted for in the returns filed by the branch office in relation to their operations and earnings. Thus, even if it is assumed that the returns filed by the branch office at Bangalore were returns filed by the appellant, the appellant had disclosed new and additional source of income and also the income earned from the said sources in the returns filed in response to notice under....
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....hether there was relevant material on which a reasonable person could have formed a requisite belief. Conclusive proof and finding on escapement is neither mandated nor required. 10. The Tribunal while rejecting the contention of the appellant-assessee on the question of re-opening had observed:- "13. Now we shall proceed to deal with the objection of the assessee to the reopening proceedings. First of all, from the reasons recorded, we understand that this is not a matter of reopening proposed solely basing on the statements of the expatriate employees. Apart from the statements, the non disclosure of receipt of royalty as disclosed by the tax returns of the branch indicated that the royalty received from SIEL was not disclosed. Ld. AO considered the explanation of the assessee and observed in letter dated 18.11.2011 (page No 45 of the Paper book) that the manufacturing Royalty/FTS received by the assessee from the Indian subsidiary as reflected in the tax returns filed by the SIEL was not reported by the assessee, and it is only in the returns filed in response to the notices issued u/s 148 of the Act, such an income was reported. Assessee admitted the fact that they did no....