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TMI Blog2010 (3) TMI 917X X X X Extracts X X X X X X X X Extracts X X X X ..... e assessment years 2002-03, 2003-04, 2004-05 and 2006-07, after considering the total demand raised by the AO and payments made by the assessee in various years beginning from A.Y. 1997-1998 to 2006-07. 2. We have heard both the parties and carefully perused the materials on record. 3. Since the defect in the stay petition as pointed out by the Bench at the time of hearing on 19.03.2010, has been rectified by the assessse by filing appropriate Power of Attorney on 22nd day of March, 2010, the stay petition is being disposed off on merit. 4. The assessee company is incorporated under the laws of Finland and is engaged in the business of supply of advanced telecom systems and equipments for use in fixed and mobile networks. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... there is no need to bifurcate the payment from supply of telecom systems separately into hardware and software. The CIT(A) then held that in the light of the decision of Special Bench of the Income Tax Appellate Tribunal in the assessee's own case for the A.Y. 1997-98 and 1998-99, the attribution of profit is to be made at 20 per cent of the resultant figure to the PE in India. With regard to the income from vendor financing, the CIT(A) held that addition of ₹ 5 crores in each of the A.Y. 2003-04 to 2006-07, made by the AO is justified. With regard to the attribution of income from R D activities undertaken by the PE in India, the CIT(A) has taken a view that it would be fair that the portion of profit to the total R D expens ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o account, the amount payable by the assessee would come to ₹ 69,88,54,109/-. 9.1 The department had also submitted that even if after applying the decision of Special Bench in the assessee's case to all the years across the Board, the total demand payable by the assessee comes to ₹ 45,01,89,009/-. 9.2 The department further submitted that even if the profit attributable to the PE on R D activities is excluded for time being, there would still a demand of ₹ 32,67,89,474/- payable by the assessee. 9.3 In these premises, the department has submitted that the assessee should at least be directed to make the payment of ₹ 32,67,89,474/-, at this stage, out of the total demand of ₹ 69,88,54,109/- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... comes to ₹ 32,67,89,474/-. 11. The ld. counsel for the assessee, on the other hand, has submitted that if the tax is determined in the light of the order of Special Bench and profit attributable to R D activities is excluded, and interest charged u/s. 234B is not to be included, and after considering various payments so far made by the asssessee in various years, the total amount of tax and interest that could be said to be payable by the assessee at this stage would only be ₹ 6,11,46,452/-. 12. After perusing the orders of the authorities below, and hearing both the parties, we find that the main controversy involved in these appeals are as under:- (i) Whether attribution of profit to the activity of supply of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n appeal before us against that issue. The Special Bench of the Tribunal in assessee's own case for A.Y. 1997-98 and 1998-99 has upheld that the income from vendor financing would be taxable in the hands of PE. 14.2 The profit attributable to PE in India on account of R D activities has been excluded by the department itself while working out the total amount of ₹ 32,67,89,474/-, that should at least be paid by the assessee at this stage. 14.3 Now the question arises as to whether for the purpose of realization of demand at this stage, where interest u/s. 234B charged by the AO is to be taken into account or not. This issue is also debatable. 15. Considering the aforesaid position about rate of profit to be attrib ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessee to furnish a suitable security for the balance outstanding amount to the satisfaction of the AO. Be it ordered here that upon payment of ₹ 12 crores by 30th day of March 2010, the demand draft of ₹ 30.75 crores, which has been deposited by the department for collecting the dues, shall stand cancelled and shall be given back to the Bank of America, Sansad Marg, New Delhi. We further direct the Bank of America, Sansad Marg, New Delhi, not to release the payment of demand draft of ₹ 30.75 crores to the Income Tax Department or its banker viz., State Bank of India, till 30th day of March 2010, subject to the condition that in case the assessee fails to make the payment of ₹ 12 crores by 30th day of March 2010 a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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