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TMI Blog2015 (10) TMI 1887X X X X Extracts X X X X X X X X Extracts X X X X ..... t attribution of India Branch @ 20% does not inbspire confidence.We, therefore, accept the gross profit margin declared by the assessee for the year under consideration - Decided in favour of assessee. Non-reduction of the management fees offered to tax - CIT(A) directing AO to reduce the management fee offered to tax by the Appellant in its return of income in respect of direct sales by the Head Office - Held that:- As decided in earlier AY's the fact which remains uncontroverted by the revenue authorities and the DR are that the assessee in the year under consideration was covered under the TP regulations and in those proceedings, the factum of management fee has dealt with extensively and in the process, the TPO found the receipt of m ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ioner of Incometax (Appeals) ought to have held as such. I : 3. The Appellant submits that the Assessing Officer be directed to delete the addition so made by him and to re-compute its total income accordingly. Without prejudice to the foregoing: 2 : 0 Re.: Estimation of gross profit: 2 : 1. The Commissioner of Income tax (Appeals) has erred in upholding the action of the Assessing Officer of estimating 20% of the direct sales made by the Head Office in India as part of the total income of the Indian Branch of the Appellant. 2 : 2. The Appellant submits that considering the facts and circumstances of its case and the law prevailing on the subject, the stand of the Assessing Officer in considering 20% of the dir ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mits that considering the facts and circumstances of its case and the law prevailing on the subject no disallowance whatsoever is called for u/s. 40(a)(ia) of the Income tax Act, 1961 and the Commissioner of Income tax (Appeals) ought to have held as such. 4.3. The Appellant submits that the Assessing Officer be directed to delete the addition so made by him and to re-compute its total income accordingly. 5.0. Re.: Non consideration of additional evidence admissible in terms of Rule 46A of the Income-tax Rules, 1962~ 5.1. The Commissioner of Income tax (Appeals) has erred in not admitting the additional evidence filed by the Appellant. 5.2. The Appellant submits that considering the facts and circumstance of its case ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of ₹ 37,80,857/- in respect of the sales. 3.3. The Head Office has sold the same medical products directly in India amounting to USD 9,59,774/-. The assessee explained that the branch has no role to play in such sales and therefore the profits from such sales are not attributable to the Indian Branch. 3.4. On the basis of the above factual matrix, the Assessing Officer adopted the findings of his predecessor given in A.Y. 2004-05 and held that 20% of the direct sales made by the Head Office should be treated as income taxable in India and accordingly made an addition of ₹ 86,37,962/-. 4. Aggrieved by this, the assessee carried the matter before the Ld. CIT(A). The Ld. CIT(A) while deciding the grievance of the assessee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er consideration. 8.1. Further at para-39 to 42, the Tribunal has made the following observations: 39. Before us, the AR submitted that the fact that receipt of ₹ 79,20,240/pertained to management fee SJMH and SJMI is evident from the accounts submitted before the revenue authorities. The AR submitted that the issue has been from TP regimen as well. It was submitted that the transaction was declared in TP report submitted, wherein it was categorically mentioned that transaction involved the receipt of management fee from AE during the year ended 31.3.2002. The AR pointed out that the assessee had declared the same in the TP report in identification of revenues, which showed that ₹ 79,20,240/pertained only to SJMH and ..... X X X X Extracts X X X X X X X X Extracts X X X X
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