TMI Blog2011 (12) TMI 285X X X X Extracts X X X X X X X X Extracts X X X X ..... e disposal of the appeal whichever event occurs first X X X X Extracts X X X X X X X X Extracts X X X X ..... before the Assessing Officer that its case falls under sub-clause (6)(e) of Article 5 of the DTAA between India and Japan. Assessing Officer has rejected all the contentions of the assessee and he proposed the profits attributable to the alleged PL of the assessee as under: Particulars Amount Total turnover from sales to Indian customers JPY 19,906,472,649 Total turnover s above converted into INR Rs. 699,51,34,490 Estimated gross profit rate of 10% holding that no contrary material was produced by the appellant to the contrary Rs. 69,95,13,449 50% of profits estimated to be attributable to PE(A) Rs. 34,97,56,724 Less: Deduction for expenditure incurred by the LO in India restricted to 50 per cent of such expenditure on the groun ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sh that PE is in existence. He further submitted that the profit has been computed by applying an estimated rate of g.p. at 10%. The assessee has a profit margin of 2.5% of the global receipt at the Head Office, therefore, the profit ought to have not been estimated more than 2.5% on the turnover attributable to alleged PE in India. He also submitted that 50% of the profit on the alleged sales made from India has been attributed to the PE in India. This attribution should not be more than 10%. He made a reference to the decision of Madras High Court in the case of Annamalais Timber Trust & Co. v. CIT [1961] 41 ITR 781. He also relied upon the decision of Hon'ble Delhi High Court in the case of Rolls Royce Singapore (P.) Ltd. v. Asstt. DIT [ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y considered the rival contentions and gone through the record carefully. In our opinion, the short controversy is whether Assessing Officer was possessing sufficient material demonstrating that assessee has a PE in India. If it is established that there is PE then the next issue would be quantification of the profit attributable to such PE. To our mind, it is quite a debatable issue. We have a glance over the assessment order as well as the order of the Learned DRP. The Assessing Officer has called for certain material from the assessee. The learned counsel for the assessee pointed out that all these materials were submitted before the Assessing Officer but we find that the Assessing Officer has observed that the details were sketchy. Ther ..... X X X X Extracts X X X X X X X X Extracts X X X X
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