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TMI Blog2016 (3) TMI 1208X X X X Extracts X X X X X X X X Extracts X X X X ..... . Prabhakar Reddy ORDER Amarjit Singh, Judicial Member - The order shall disposed off an application for stay moved by the assessee i.e. Dimension Data Asia Pacific Ptd. Ltd. (Formerly known as Datacraft Asia Pte. Ltd.) (DDIL) incorporated in Singapore. The petitioner is engaged in the business of profit management support services to group entities in Asia Pacific Region. During Assessment Year 2011-12 the Petitioner has rendered management support services to its 100 percent Indian subsidiary, DDIL and has received a management fee of INR 225,691,365/- pursuant to the Agreement for provision of Management, General Support and Administrative services entered into between the said parties. In the return of income filed for the year ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 3. While completing the assessment order u/s. 143(3) r.w. Section 144C(1) of the Income Tax Act, 1961(Act) held that DD Asia has a Permanent Establishment (PE) in India and attributed the entire management fees to the alleged PE Further, the learned AO allowed only 10% as expenses and held balance 90% as business income of the alleged PE. It is asserted by the assessee that the presence of the employees for a period of 9 days was less than the threshold prescribed in Article 5(6) of the India-Singapore DTAA and therefore could not constitute a PE with regard to the services rendered pursuant to the management fee received by the Petitioner. 89 days were not required to be recorded for the expenses of PE in India as no profits resulted fro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... crore (appx), i.e., about 10 times to the returned income, violating CBDT Instruction No.96 dated August 21, 1969, therefore requisite demand is required to be stayed and also place reliance upon Soul v. Dy.CIT [2010] 323 ITR 305/[2008] 173 Taxman 468 (Delhi High Court), Taneja Developers Infrastructure Ltd. v. Asstt. CIT [2010] 324 ITR 247 (Delhi High Court), Valvoline Cummins Ltd. v. Dy. CIT [2008] 307 ITR 103/171 Taxman 241 (Delhi High Court), N. Jegatheesan v. Dy. CIT [2015] 64 taxmann.com 339 (Madras High Court) and J.R. Tantia Charitable Trust v. Asstt. CIT [2013] 34 taxmann.com 166/[2014] 149 ITD 176 (Jodh.) 6. It is also argued that the Petitioner is not a permanent establishment in India because 9 days services was rendered ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ] 155 TTJ 0535 (Jodhpur ITAT). 7. The appellant admitted the 9 days services was rendered in India which is less than the threshold period of 30 days as per Article 5(6) of the India-Singapore Double Tax Avoidance Agreement and the appellant contested that the 89 days because he did not render any kind of service for payment and entered into the project for which no fees of management was charged only travelling cost were recovered from BSNL. Undoubtedly, the question of PE is still required to be decide by the Tribunal in the appeal before it. Moreover, it is also observed that the fee of the appellant is reimbursed on cost plus 10% basis whereas the Assessing Officer allowed deduction only 10% and taxed 90% of the management fees as ..... X X X X Extracts X X X X X X X X Extracts X X X X
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