TaxTMI 
TaxTMI 
TaxTMI 
2022 (2) TMI 1419
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....shment [PE]; iii) Attribution of profit; and iv) Other common grievance relates to the charging of interest u/s 234A, B, C, D, 244A and initiation of penalty u/s 271(1)(c) of the Act. 4. Vide application dated 16.12.2021, the assessee raised an additional ground in the captioned appeals as under: "Ground 1.1 - That the assessment order passed is bad in law as the AO erred by not carrying out the binding directions of the DRP which is a clear violation of the binding provisions of section 144C(13) of the Act. The aforesaid additional ground of appeal raises a pure legal issue for which investigation into facts is not required. The said ground is being raised pursuant to the order dated 17.11.2021 passed by the Hon'ble Tribunal (ITA No.646/Del/2021) in the case of the assessee quashing the revisionary proceedings under section 263 of the Act for the said assessment year, wherein the Hon'ble Tribunal has been pleased to observe that the assessment order passed in violation of the binding direction of the D.R.P is non-est and null and void . The omission to raise the aforesaid additional ground is neither wilful nor unreasonable. The appellant prays that the additional ground....
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....y facts and evidences were before the IT AT and the matter was heard in great details on merits?" Therefore, the mandate given by Hon'ble High Court to Hon'ble ITAT by remanding back the order was only to decide on the issue of PF and not to examine the case de-novo. The sanctity of the assessment order passed by the AO was never in question. Neither did the Hon'ble Bench in its order dated 02.09.2019, nor did the Hon'ble High Court make any mention or even a passing reference of the nullity of the assessment order. It is acutely improper to import what is not intended in the judicial pronouncement. 3. The appellant has sought to raise the additional grounds of appeal even in assessment years not covered by the decision of Hon'ble Bench dated 17.11.2021. This is without any basis and therefore, inadmissible. The Hon'ble High court has given specific directions to the ITAT with regard to its order dated 02.09.2019, to limit its consideration to the issue of existence of PE in India and not to decide the case de novo. Therefore, admission of additional grounds of appeal while giving effect to the order of the Hon'ble High Court is illegal and cont....
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....ment was undertaken in the name of non-existent entity.'" 4. ITAT, vide the impugned order, has held, that (z) since all material necessary for adjudication of the additional ground was available on record and no fresh examination of facts was required to be undertaken, the additional ground raised by the Respondent-Assessee was entitled to be admitted for adjudication; (ii) the Respondent-Assessee filed its return of income for the subject assessment years, in the name of Sony Ericsson Mobile Communications (India) Pvt. Ltd. (zzz) the name of the Respondent-Assessee, w.e.f. 18th April, 2012, was changed to Sony Mobile Communications (India) Pvt. Ltd.; (iv) Sony Mobile Communications (India) Pvt. Ltd., w.e.f. 1st April, 2013, was merged with Sony India Pvt. Ltd.; (v) the AppellantRevenue, vide letter dated 6th December, 2013 was informed of the merger; (vz) the factum of merger was also mentioned in another letter dated 17th February, 2014 of the Respondent-Assessee to the Appellant-Revenue; (vzz) however notwithstanding the aforesaid, the AO passed the draft assessment order dated 31st March, 2014, in the name of Sony Ericsson Mobile Communications (India) Pvt. Ltd.; (viii)....
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....xx 18. However as far as the first substantial question of law urged by the counsel for the Appellant-Revenue is concerned, we find that this Court, vide judgment dated 28th January, 2016 in ITA No. 638/2015 and ITA No. 648/2015 while setting aside the order dated 27th February, 2015 of ITAT, directed the ITAT to decide the appeal "afresh in light of the directions issued and to examine all the grounds including the one regarding the existence of an international transactions involving AMP expenses". The aforesaid direction cannot be said to be of limited remand and was of open remand and thus we are of the opinion that the ITAT was entitled to allow the additional ground to be urged before it and to allow the appeal solely on the basis thereof. Thus the first substantial question of law urged does not arise.'' Xxxx SANJEEV NARULA 21. Having gone through the judgment of my ld. Colleague Rajiv Sahai Endlaw, J, I am unable to agree with the conclusions reached by him. 22. As noted above, the Revenue has urged two substantial questions of law for our consideration. In so far as the first question of law concerning the scope of enquiry by the ITAT arising out of ....
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....n of profit of PE may be based on cost plus method of salary of expat employees. The ld. CIT further noted that the assessee company clearly mentioned that salary of 50% is attributable to operation in India and cost plus of 10% may be applied on the same to determine the profit taxable in India. 7. Thereafter, the ld. CIT referred to the following directions on this issue by the DRP: "Thus, basis above the income of the PE can be reasonably ascertained by imputing the costs in terms of salary paid to the employees of the AE and applying a reasonable markup on such costs to determine the income of the PE in Indian jurisdiction. The factual history of the matter is in the assessment records with the AO. The panel accepts the same in view of the facts of the case. The action of the TPO/AO is upheld., subject to charge on the wages/remuneration paid to the seconded employees at the cost-plus margin of 20% on 'salary attributed to India operations' (being a reasonable attribution basis the work performed for the AE-though the assessee seeks only 10%) and existence of PE conceded by the assessee The assessee has agreed to the issue of PE and the attribution because salary is charg....