TaxTMI 
TaxTMI 
2026 (1) TMI 1474
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....ssessee has raised the following grounds of appeal: 1. General 1.1 The order passed by the Learned Commissioner of Income-Tax (Appeal) ('CIT(A)') dated 16 September 2025 under section 250 of the Income-tax Act, 1961 ('the Act') in relation to the final assessment order passed by the Deputy Commissioner of Income Tax, Corporate Circle 1(1) under section 143(3) of the Act is bad in law and is contrary to the facts and circumstances of the present case. 2. Disallowance of expenses u/s 40(a)(i) of the Act (Adjustment amounting to INR 3,19,80,925-Tax impact-INR 1,05,73,853) 2.1 The Ld. AO and the Ld. CIT(A) erred in disallowing the corporate charges paid to Anixter Singapore Pte Ltd amounting t....
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....essee 'Anixter India Private Limited is a private limited company registered under the Companies Act, 1956 with its registered office in Chennai and engaged in the business of distribution of communication products and electrical and electronic wires, cables and fasteners. For the Assessment year ('AY) 2017-18, the assessee has filed its Return of Income on 29.11.2017 declaring a total income of Rs. 5,64,43,780/- and claimed a refund of Rs. 78,64,510/- and the same was processed u/s. 143(1) of the Act. The Return of Income was taken up for scrutiny and information were sought through notice u/s. 142(1) of the Act on 14.10.2019. During the previous year relevant to the AY 2017-18, the assessee had incurred an amount of Rs. 3,19,80,925/- ....
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.... the Honorable Supreme Court of India had upheld the observations made by the ITAT. The relevant extract of the SC's order is reproduced as below: - "...... SLP dismissed against order of High Court that where Liaison Office (LO) of assessee, a non-resident company, did not finalize and transact a business deal and activities carried out by LO could not be said to be preparatory or auxiliary in nature, LO did not constitute Permanent Establishment of assessee. INTERNATIONAL TAXATION SLP dismissed against order of High Court that where MIPL was not performing additional function, in absence of material, it could not be taken as dependant agency PE to assessee, a non-resident company..." To decide this appeal, B....
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....a Company by the Legal Registrar of the Government of Singapore in accordance with the laws in force in the Singapore, and it was engaged in the business of same field of the appellant. Therefore, Anixter Singapore was competent enough to persuade the client, complete the process of online registration, and provide after sale service to the clients based at worldwide. All these facts suggested that, Anixter Singapore was acting as the Permanent Establishment of the appellant company. Therefore, I am of the opinion that, the AO's action of invoking provision of Section of 201 of IT Act is justified. As a result, all the grounds raised by the appellant in this regard are dismissed. Now assessee is in further appeal before us. ....
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....(A) has applied section 195 mechanically, which is impermissible in law. The Ld.CIT(A) has further erred in holding that Anixter Singapore has a Permanent Establishment in India. This finding is completely unsupported by facts. There is no fixed place of business, no permanence, no disposal test satisfied, and no dependent agent. Mere receipt of corporate charges or rendering of support services cannot create a Permanent Establishment under the India-Singapore DTAA. The finding is also internally contradictory, as the Assessing Officer himself had observed that the transactions fall outside section 9(1)(vii)(b). Therefore, he submitted that in these circumstances, the payment being non-taxable in India, there was no obligation to deduct tax....
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....ecord, it is evident that these services do not "make available" any technical knowledge, experience, skill, know-how or processes to the assessee so as to enable it to apply such technical knowledge independently in future. Therefore, the payments do not qualify as Fees for Technical Services within the meaning of Article 12 of the India-Singapore DTAA. Once the DTAA is applicable, the provisions of the treaty, being more beneficial to the assessee, override the provisions of the Act by virtue of section 90 of the Act. Since the impugned payments are not taxable as FTS under the DTAA, the same can at best be regarded as business profits in the hands of the recipient. 10. As regards the finding of the Ld.CIT(A) that Anixter Singapore con....