TaxTMI 
TaxTMI 
2019 (2) TMI 1125
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....is engaged in business of manufacturing of cars, its spare parts and accessories. Assessee has wholly owned subsidiary company in India known as Honda Siel Cars Pvt. Ltd., which has entered into several transactions relating to sale of raw materials, finished goods, capital goods and has received royalty income, fees for technical services etc. It has been observed by authorities below that transactions have been carried out between two companies ever since its inception. 2.1 On 24/06/10 a survey was carried out at premises of Indian subsidiary under section 133A of the Act. During survey statements of expatriates employees of Indian subsidiary were recorded, on basis of which Ld.AO formed a belief that income which was chargeable to tax, ....
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....ermanent Establishment (PE) under Article 5 of the Indo- Japan DTAA given the fact that necessary requisites of creating a PE under Article 5 of DTAA were lacking in the present case. 3.1 That the AO/DRP erred in coming to the conclusion that their existed a PE of the Appellant in India while relying on the statements of expatriate employees of Honda Cars India Ltd. (HCIL) which were inadmissible evidence in terms of the judgment of the Hon'ble Supreme Court in S. Qadar Khan & Sons (254 CTR 228) 3.2 That the AO/DRP erred in coming to the conclusion that expatriate employees working in Honda Cars India Ltd were working on behalf of the Appellant and as such controlled the day-to-day functioning of HCIL in terms of technology, econo....
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....es of the case and in law, the DRP has erred in attributing 25% of the total income to the activities of the appellant in India alleging that selling of raw material, consumable spare parts, etc. has been carried in India when none of the selling operation is carried in India. 4.4 Without prejudice to the above grounds, the AO/ DRP has grossly erred in law and facts in rejecting the attribution study filed by the appellant. 5. That the AO/DRP erred in law and facts in taxing export commission ignoring the CBDT Circular No.23 dated July 23, 1969 and Circular No. 786 dated February 7, 2000 when it is a well settled principle that CBDT instruction/circular is binding on revenue authorities. 6. That the AO/DRP erred in law and facts in....
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....nd alleging that the Appellant has concealed the true and correct particulars of its taxable income and furnished inaccurate particulars of its income. That the above grounds are without prejudice to each other. The Appellant also reserves its right to add, alter or amend any ground of appeal either before or at the time of hearing of this appeal." 4. At the outset, Ld. Counsel submitted that before this Tribunal, assessee is challenging primarily legal issue pertaining to initiation of re-assessment proceedings under section 148 of the Act. 4.1 He submitted that, asessee went before Hon'ble Allahabad High Court against reopening by way of Writ Petition No. 1373 of 2012 and Hon'ble Allahabad High Court vide order dated 05/08/14 dismis....
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....ng the order of the TPO as conclusive on the grounds that such order was passed prior to the conduct of the survey when even after such survey the TPO had consistently found such transactions to have met the arm's length principle and as such rendering the order of the High Court perverse? e) Whether Article 9 of the DTAA prevents any further allocation of profits where the transactions between the related enterprises having met the arm's length test in the form of an order of the TPO and consequently there could not exist any reason to believe that income chargeable to tax had escaped assessment. f) Whether the High Court fell in error in concluding that the order of the TPO was not binding on the AO at the stage of issue of a notice....