TaxTMI 
TaxTMI 
2024 (2) TMI 1327
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....herefore, are bad in law. 3. The learned AO/Hon'ble DRP, grossly erred, in alleging that Appellant has a Fixed place Permanent Establishment ("PE") for business in India, to carry on the business of sale of software products without indicating any basis for same. 3.1. Learned AO/ Hon'ble DRP have failed to provide even a vague indication on why contentions of Appellant are incorrect and further in substituting their own imaginary facts as basis for alleging that the Appellant has a Fixed place of business in India to carry on the business. 3.2. The learned AO in the impugned order erred in ignoring relevant and complete facts brought on record explaining Appellant's business with Indian entity and proceeded on unsubstantiated and imaginary presumptions to hold existence of PE and further perpetuated such error by attributing income on imaginary and baseless presumptions. 3.3. Learned AO erred and Hon'ble DRP erred in confirming existence of a Fixed place of business in India through NCR Corporation India Private Limited ("NCR India"), an independent legal entity conducting its own business, without indicating an iota of evidence t....
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....ons issued for AY 2018-19 and AY 2019-20 wherein adverse conclusion on existence of Agency PE and Fixed place PE is drawn merely by placing reliance on clause 6. 1(a) and 6. 1(b) of the Distribution Agreement in vacuum without appreciating the business model of the Appellant and NCR India. 5.2. Both learned AO/ Hon'ble DRP have erred, in law and on facts, by not passing a speaking order, not considering material brought on record and assuming facts without bringing on record any material to establish the allegations made against Appellant. 6. Without prejudice to the above grounds of appeal, learned AO/ Hon'ble DRP have erred, in law and on facts, in attributing income to alleged PE without indicating any valid basis, purely based on speculations and without taking cognizance of the fact that profits/ income earned in relation to activities in India (by alleged PE, i.e., NCR India), have already been offered to tax in India and which is at arm's length. 7. Without prejudice to the above grounds of appeal, learned AO/ Hon'ble DRP have erred, in law and on facts, in attributing the profit to the alleged PE in India, in an arbitrary manner an....
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....issues involved have been squarely covered by the order of the coordinate bench in ITA no. 1756 & 1776/Del/2022. The ld. DR fairly, accepted to this fact. For the sake of ready reference the relevant portion of the said order is reproduced herewith:- 7. We have heard Ld. Authorized Representatives of the parties and perused the material available on record and gone through the orders of the authorities below. In respect of transfer pricing adjustment related to sale of software/hardware, the contention of the assessee are multifold. It is stated that the assessee has no fixed place/PE during the period in appeal. The entire sale was executed at off shores and without prejudice, it was submitted that the impugned transaction of sale of software/hardware that was executed outside India to group company in India i.e. NCR Corporation India Pvt. Ltd. were subjected to transfer pricing scrutiny in the hands of alleged PE and were accepted to be at arm's length. Therefore, nothing further would be attributable to the alleged PE in India. In respect of this contention, reliance is placed on the judgement of the Hon'ble Supreme Court in the case DIT vs Morgan Stanely & Co. (2007) 2....
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....ngth, we hold that the ruling is correct in principle provided that an associated enterprise (that also constitutes a PE) is remunerated on arm's length basis taking into account all the risk-taking functions of the multinational enterprise. In such a case nothing further would be left to attribute to the PE. The situation would be different if the transfer pricing analysis does not adequately reflect the functions performed and the risks assumed by the enterprise. In such a case, there would be need to attribute profits to the PE for those functions/risks that have not been considered. The entire exercise ultimately is to ascertain whether the service charges payable or paid to the service provider (MSAS in this case) fully represents the value of the profit attributable to his service. In this connection, the Department has also to examine whether the PE has obtained services from the multinational enterprise at lower than the arm's length cost? Therefore, the Department has to determine income, expense or cost allocations having regard to arm's length prices to decide the applicability of the transfer pricing regulations. 34. Economic nexus is an important a....
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.... the assessee is against the levy of interest u/s 234B of the Act. The levy being consequential in nature we hold, accordingly. 11. Ground No.12 raised by the assessee is against the initiation of penalty us/ 270A of the Act. This ground being premature hence, dismissed. 12. In the result, the appeal of the assessee is partly allowed. ITA No.1776/Del/2022 [Assessment Year: 2019-20] 13. Now, we take up assessee's appeal in ITA No. 1776/Del/2022 pertaining to Assessment Year : 2019-20. The assessee has raised following grounds of appeal:- "Based on the facts and circumstances of the case and in law, NCR Global Solutions Limited ("NCR GSL" or "the Company" or "the Appellant") respectfully craves, leave to prefer an appeal under Section 253(1)(d) of the Income-tax Act, 1961 ("the Act") against final assessment order dated 9 June 2022 ("impugned order") (received by the Company on 10 June 2022) issued under Section 143(3) read with Section 144C(13) of the Act, by the Deputy Commissioner of Income-tax, Circle2(2)(2), International Tax, New Delhi ("Ld. AO") purportedly in pursuance of the Directions dated 17 May 2022 issued under Section 144C(5) by t....
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....manufacturing business and thus, the allegation of NCR India procuring orders and executing sales on behalf of Appellant is ex-facie erroneous and without any basis consequently destroying very basis of allegation on existence of Agency PE. 4. Ld. AO erred and Ld DRP erred in confirming the allegation that NCR India is acting as an agent on behalf of the Appellant and thus, the Appellant has an Agency PE in India without any factual foundation / citing any basis. 4.1. The Ld. AOI Ld. DRP has failed to prove on facts or provide any cogent reason or basis for concluding that the Appellant has an Agency PE in India. 4.2. The Ld. AOI Ld. DRP has erred, in law and on facts, in alleging Agency PE on the surmise that NCR India works mainly or wholly on behalf of the Appellant, NCR India has authority to conclude contracts on behalf of the Appellant and NCR India habitually secures orders in India, mainly or wholly for the Appellant. 4.3. Impugned order has failed to appreciate that business activities undertaken by the Appellant and NCR India are on principal-to-principal basis and that NCR India is not an agent appointed by the Appellant. 5. L....
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..... 10. Without prejudice to the above grounds of appeal, Ld AO/ Ld DRP has erred, in law and on facts, in arbitrarily considering 70% of the business income to be attributable to the alleged PE in India, on the pretext that substantial sales and marketing activities are being carried out in India. Computation of tax payable: 11. Ld AO has erred, in law and on facts', in calculating tax on income from royalty at the rate of 20% (plus surcharge at the rate of 5% and education cess at the rate of 4%) as against the applicable tax rate of 10% under Article 12 of the IndiaIreland Tax Treaty, applicable to royalty income. 12. Ld. AO has erred, in law and on facts, in considering INR 75,09,484, representing tax at source deducted ("TDS") by the Revenue on interest on income-tax refund which is not issued to the Appellant, as a refund already issued to the Appellant and has thereby, erred in raising a tax demand in this regard. Other grounds: 13. The Ld. AO has erred in levying interest of INR 6,75,854 under Section 2340 of the Act in respect of TDS on interest on income-tax refund which refund is neither issued nor received by the C....