9911796707
TMI Blog2017 (5) TMI 1104X X X X Extracts X X X X X X X X Extracts X X X X ..... the following grounds:- "1. That in the absence of a PE in India in terms of DTAA (Double Taxation Avoidance Agreement with the US, no business profit can be said to have accrued in India, accordingly the appellant is not liable to be taxed in India. 2. That as the activities of Branch in India are only preparatory and auxiliary services rendered to Head Office in the US and consequently there is no PE, hence in the absence of PE no income is liable to be taxed in India. 3. That there is no international transaction with an Associated Enterprise (AE) as contemplated under Section 92C of the Income Tax Act, 1961 hence no income ought to have been deemed under Section 92C of the Income Tax Act, 1961. 4. That the provisions of Section 9 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cts of the case are that the assessee, a premier engineering consultancy company was established in 1986 by Maharaj Jalla, a licensed professional engineer to provide quality structural, civil and geotechnical engineering consulting services. The mission of the corporation was to deliver to its clients the best quality service with the least turnaround time in the most economical way. To take advantage of the growing trend in globalization and to arbitrage cost differences CEC established a software development unit at Delhi in 1991. The Indian Branch had filed return of income declaring taxable income of Rs. 20,86,609/-. A reference was made to the Transfer Pricing Officer (TPO) for determining the arm's length price (ALP) in respect of in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... arketing and quality control activity have taken place and all developmental activities have taken place in India. In this situation, it cannot be said that risk is involved exclusively either on the Head office or on the PE branch office in India. Obviously, from stage of discussion and obtaining the contract till its final marketing to the respective client have been undertaken by the US Head office but at the same time this fact cannot be ignored that the PE branch office in India contributed towards all development activities at the cheaper cost of service and human resources in comparison to USA, therefore, we are of the view that for earning higher profit in comparison to USA, comparable companies as adopted in transfer pricing study, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he US Head office are not sustainable. At the same time, we also observe that the CIT(A) was reasonable and justified in directing the AO to calculate the attributable profit at 50% of the figure arrived by the AO after applying global profit rate of US Head office for the respective assessment years under consideration in these appeals. Accordingly, ground no. 11 & 12 for AY 2003-04 and ground no. 6 & 7 for AY ITA No.1597,1598,1275,1172/D/2009 Asstt.Years: 2003-04, 2004-05 31 2004-05 of the assessee as well as ground no. 1 to 4 of the revenue in both the appeals for AY 2003-04 and 2004-05 are dismissed." 5. In assessment year 2006-07, the Tribunal has directed the Assessing Officer to recompute the income of the assessee in the light of ..... X X X X Extracts X X X X X X X X Extracts X X X X
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