TaxTMI 
TaxTMI 
TaxTMI 
2022 (8) TMI 1284
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....assessee has raised following grounds: "Each of the grounds and/ or sub-grounds of the appeal are independent and without prejudice to one another. 1. On the facts and circumstances of the case and in law, the Hon'ble Dispute Resolution Panel (Hon'ble DRP)/Learned Assessing Officer (Ld. AO) erred in further attributing Rs.8,35,44,660, as income of the Permanent Establishment (PE) of the Appellant, taxable in India. 2. On the facts and circumstances of the case and in law, the Hon'ble DRP/Ld. AO erred in not appreciating that the Appellant has attributed the appropriate profits having regard to the operations that are carried out in India as required under section 9 of the Income-tax Act, 1961 (TT Act). The Appellant pray....
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....led to substantiate their assumption by not bringing anything on records; 5.6 computing the arms length price of the transaction without referring the issue to the transfer pricing officer, which is in gross violation of Instruction No. 3 of 2016 issued by the CBDT; 5.7 determining an ad-hoc attribution of profits, without any basis / comparative study. 6. On the facts and circumstances of the case and in law, the Hon'ble DRP/Ld. AO erred in: 6.1 not appreciating that no further attribution of income is warranted, once the international transaction has been accepted to be at arm's length in the assessment proceeding of the Indian agent i.e. Hempel Paints (India) Pvt. Ltd. (Hempel India') who is recipient of such commissi....
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.... the case pertaining to this issue, as emanating from the record, are: The assessee is a non-resident company incorporated under the laws of Singapore and is a tax resident of Singapore. For the year under consideration, the assessee e-filed its return of income on 29/11/2017 declaring total income at Rs. Nil. The assessee is engaged in business of selling protective coating/paints including marine, protective, container, yacht coating. To cater to its business with Indian customers, assessee takes sales support of Hempel Paints (India) Private Ltd ('Hempel India'). The assessee has entered into an agreement with Hempel India for carrying all the sales support functions in India. In consideration of services rendered by Hempel India to asse....
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....oach adopted in preceding assessment years, attributed additional profit at 25% of sale value to the assessee's PE. 5. The assessee filed detailed objections against the addition made by the Assessing Officer. Vide directions dated 15/03/2021, issued under section 144C (5) of the Act, learned Dispute Resolution Panel ('DRP'), though noted that identical issue in assessee's own case has been decided in its favour by the coordinate bench of the Tribunal, rejected the objections filed by the assessee in order to keep the issue alive and to protect the interest of the Revenue. 6. In conformity with the directions issued by the learned DRP, the Assessing Officer vide impugned final assessment order dated 19/04/2021, attributed additional profi....
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....dian subsidiary at cost plus 8.17% mark-up as commission on sales effected through the agent in India. There is no dispute about the existence of assessee's agency PE in India. A foreign company is liable to be taxed in India on so much of its business profits as is attributable to its PE in India. In the present case, the point sought to be made by the assessee is that the commission payment to Hempel India by the assessee is adequate and justified on the basis of transfer pricing analysis, which has indeed been affirmed by the income-tax authorities in the case of Hempel India for the instant assessment year. Therefore, according to the assessee, no further income could be attributable to its agency PE again. In other words, as per th....
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....see therein. The Revenue opposed the same by pointing out that the relevant transfer pricing reference was not in the case of the non-resident assessee therein, but in the case of the Indian recipient. The Hon'ble High Court specifically repudiated the aforesaid plea and held that once it was treated as arm's length price in the hands of the recipient, a different view cannot be taken in the case of assessee non resident who had paid the same commission to its agent. The Hon'ble High Court deemed it fit to apply the proposition approved in the case of M/s. Morgan Stanley & Co. Inc (supra) as well as in the case of SET Satellite Singapore Pte Ltd. (supra) even in a situation where the transfer pricing reference was in the context....