2012 (5) TMI 680 - AT - Income Tax

Summary

Issues involved:
1. Whether the assessee has a permanent establishment in India.
2. Disallowance made u/s.40(a)(i) on various payments.
3. Carry forward and set off of losses.
4. Disallowance on payments made to advertising and collecting agents.

Issue 1: Permanent Establishment in India
The appeal by the assessee challenges the order of CIT(A)- XXXIII, Mumbai, for the assessment year 2005-06 regarding the existence of a permanent establishment in India. The Tribunal, consistent with a previous decision, ruled in favor of the assessee, allowing ground nos. 1 & 2.

Issue 2: Disallowance u/s.40(a)(i) on Various Payments
Ground nos. 3(a), 3(b), 3(e), 3(c), 3(d), and an additional ground relate to disallowances under u/s.40(a)(i) on payments to different entities. The Tribunal decided in favor of the assessee for each of these grounds, following previous rulings and allowing the respective grounds of appeal.

Issue 3: Carry Forward and Set Off of Losses
The assessee raised a ground seeking carry forward and set off of losses, which was dismissed as infructuous since other grounds were allowed in favor of the assessee.

Issue 4: Disallowance on Payments to Advertising and Collecting Agents
Ground no. 3(f) concerns disallowance on payments to advertising and collecting agents, with the contention that these were trade discounts, not commissions. The matter was remanded to the CIT(A) for further consideration.

In conclusion, the Tribunal partially allowed the appeal of the assessee, with various grounds decided in favor of the assessee concerning permanent establishment, disallowances on payments, and an additional ground. The issue of carry forward and set off of losses was deemed infructuous, and the matter of payments to advertising and collecting agents was remanded for review.