9911796707
TMI Blog2018 (12) TMI 690X X X X Extracts X X X X X X X X Extracts X X X X ..... 2. The appeal of assessee and Stay Application were heard together and are being disposed of by this consolidated order for the sake of convenience. 3. The assessee has raised the following grounds of appeal:- Ground No.1 - Non-constitution of Permanent Establishment ('PE') of the Appellant in India 1.1 On the facts and in the circumstances of the case, the Assistant Commissioner of Income Tax (International Taxation) - I, Pune, ('AO') erred in proposing and the Dispute Resolution Panel ('DRP') further erred in not interfering with the conclusion of the AO that the Appellant Indian subsidiary constitutes its 'Business Connection' in India under Section 9(1)(i) of the Income-tax Act, 1961('the Act' ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... led to appreciate that since the Appellant operates entirely from outside India (Germany) and carries out no operations in India, no income can be attributed to the alleged PE in India under Article 7 of the Tax Treaty, and even otherwise pursuant to Article 7(3) of the Tax Treaty, the taxation on gross basis at higher rates of 20% on gross basis under Section 115A / 44D of the Act is unwarranted and the taxation ought to be at 10% on gross basis under Articles 11 and 12 of the Tax Treaty as offered in the Return of income and the AO be directed accordingly. Ground No. 3 - Denial of recourse to Non-discrimination clause - Article 24 of the Tax 3.1. Without prejudice to the above and on the facts and the in the circumstances of the case, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... subsidiary on a conservative basis on the reimbursement of expenses. 5.2. It is prayed that the AO be directed to grant the corresponding credit for tax deducted at source by the Indian Subsidiary. Ground No.6 - Lack of adequate opportunity 6.1. Without prejudice to the above and on the facts and in the circumstances of the case and in law, the AO erred in not granting sufficient opportunity to the Appellant before passing the order under Section 144C(1) of the Act and the DRP further erred in not considering the objections / submissions of the appellant while giving directions under Section 144C(5) of the Act and the said orders / directions being passed in violation of the principles of natural justice be kindly quashed or set asid ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ce by the Indian subsidiary. 5. The assessee also furnished an application for admission of additional grounds of appeal along with additional evidence, admittedly which were not filed before the authorities below. 6. Briefly, in the facts of the case, the assessee was a Non-resident entity of Germany and was rendering services to the Indian entities. The assessee had received support service charges against services rendered and as per provisions of Indo-German Treaty had offered the receipts to tax @ 10%. The assessee had also offered interest income similarly. The Assessing Officer on the other hand, applying provisions of section 115A r.w.s. 44DA of the Act had taxed the income attributable to Permanent Establishment (in short 'PE') @ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ier decisions and have held that there is no merit in invoking provisions of section 115A of the Act in respect of interest and 115A r.w.s. 44DA of the Act in respect of support / royalty services; the receipts are to be taxed in the hands of assessee under Indo-German Treaty @ 10%. 9. The issue arising before us is squarely covered by earlier orders of the Tribunal, on which we are placing reliance but for the sake of brevity, the same are not being reproduced. The Revenue has filed appeal before the Hon'ble Bombay High Court. Since the appeal against the order of Tribunal is pending before the Hon'ble Bombay High Court, but the Revenue has not brought on record any change in facts for the year under consideration. Accordingly, following ..... X X X X Extracts X X X X X X X X Extracts X X X X
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