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TMI Blog2011 (3) TMI 1348X X X X Extracts X X X X X X X X Extracts X X X X ..... ) erred in holding that the assessee's Liaison office cannot be considered as a permanent establishment in India and no profits can be attributed to the permanent establishment as no profit accrued or arises in India. On the facts and in the circumstances of the case and in law, the learned CIT(A) erred in directing the Assessing Officer to delete the entire addition of Rs.1,64,94,79,200. The appellant prays that the order of the learned CIT(A), Mumbai on the above grounds be set aside and the order of the Assessing Officer be restored. The appellant craves leave to amend or alter any ground or add a new ground which may be necessary." ITA No.3056/Mum./2008 "On the facts and in the circumstances of the case and in law, the learned CIT( ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sides and perused the records. The issue involved in this appeal is discussed by the Tribunal in detail in assessee's own case for the Assessment Years 1999-2000 to 2002-03 and 2003-04 (supra).The relevant portion of the Tribunal order is extracted hereunder : "We have heard the rival contentions and perused the relevant record. Undisputedly, the LO of the assessee was performing the activities of assorting of diamonds, checking of the right quality of diamonds and price negotiation as per the instructions and specification of the assessee. These activities of the LO is only part of the purchasing process of the diamonds and did not bring any physical or qualitative change in the goods purchased. Even otherwise, the function of the LO as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ine the amount of profits which may reasonably be deemed to have been derived by the resident person from that business and include such amount in the total income of the resident person. (6) ** &nb ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ection, some continuity of relationship, between the person in India who helps to make the profits and the person outside India who receives or realises the profits, is necessary. Where all what has happened is that a few transactions of purchases of raw materials have taken place in India and the manufacture and sale of goods have taken place outside India, the profits arising from such sales cannot be considered to have arisen out of a business connection in India. Where, however, there is a regular agency established in India for the purchase of the entire raw materials required for the purpose of manufacture and sale abroad and the agent is chosen by reason of his skill, reputation and experience in the line of trade, it can be said tha ..... X X X X Extracts X X X X X X X X Extracts X X X X
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