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TMI Blog2019 (11) TMI 1600X X X X Extracts X X X X X X X X Extracts X X X X ..... nt with its subsidiary in India, i.e. Celltick India, it is engaged in providing software solutions for onward distribution to third party customers in India. In terms of such arrangement effective from March, 2011, a copy of which has been placed it emerges that the price realised from the ultimate customer is shared between the assessee and its Indian subsidiary, i.e. Celltick India, on 50-50 basis. For the present, the issue relating to characterisation of income is not being contested by the assessee as it has sought to challenge the untenability of the addition only on the basis of the proposition that once arm s length principle has been satisfied qua the relevant transactions, there can be no further profits attributable to the assessee in India even if it has a PE in India. While canvassing such proposition, assessee also does not bring into question the stand of the Revenue that there is a PE of the assessee in India. The point sought to be made by the assessee is that the compensation remaining with the Indian subsidiary, i.e. Celltick India, is adequate and justified on the basis of the Transfer Pricing analysis, and the same has been so accepted by the income-tax a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 39; income tinder Section 9(l)(vi) of the Act; 3. erred in holding that the income received by the Appellant from provision of software solutions to Celltick India for onward distribution Co third party customers in India is taxable in India as 'royalty' income tinder the provisions of Article 12 of the India-Israel Tax Treaty; 4. erred in holding that the income received by the Appellant from provision of software solutions to Celltick India for onward distribution to third party customers in India is taxable in India as 'royalty' income under the provisions of Article 12 of the India-Israel Tax Treaty, without appreciating the fact that there is no 'use' or 'right to use' of the 'copyright' in the software solutions provided by the Appellant to celltick India for onward distribution to third party customers in India; 5. erred in holding that the income received by the Appellant from provision of the software solutions for onward distribution to third party customers in India is taxable in India as 'royalty' income under the provisions of Article 12 of the India-Israel Tax Treaty, without appreciating the fact the d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ant; 12. erred in estimating the profits of the alleged DAPE of the Appellant at 40 percent of the gross revenues of the Appellant, on an arbitrary, and ad-hoc basis; Short rant of TDS credit 13. erred in granting snort credit of the IDS of ₹ 49,57,443 while computing the tax liability of the Appellant for the subject AY: Wrong computation of interest under Section 234A of the Act 14. erred in computing interest under Section 234A of the Act; Wrong computation of interest under Section 234B of the Act 15. erred in computing interest under Section 234B of the Act; Initiation of penalty proceedings under Section 271(1)(e) of the Act 16. erred in initiating penalty proceedings under Section 271(1)(c) of the Act, on the ground that the Appellant has concealed and furnished inaccurate particulars of its income. Each of the above ground is independent and without prejudice to one another. The Appellant craves leave to add, to alter, to amend or to delete any or all of the above grounds of appeal, at or prior to hearing of the appeal so as to enable the Income Tax Appellate Tribunal to decide the appeal according to law. Th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssee has argued that the issue has squarely been covered by the decision of the Hon‟ble ITAT in the assessee‟s own case for the A.Y. 2012-13 in IT(TP)A. No.883/M/2016 dated 28.02.2019, therefore, in the said circumstances, the issues are liable to be decided in favour of the assessee. However, on the other hand, the Ld. Representative of the Department has refuted the said contention. The copy of order dated 28.02.2019 is on the file and the relevant finding has been given as under: - 7. We have carefully considered the rival submissions. The appellant before us is a tax resident of Israel and in terms of the arrangement with its subsidiary in India, i.e. Celltick India, it is engaged in providing software solutions for onward distribution to third party customers in India. In terms of such arrangement effective from March, 2011, a copy of which has been placed in the Paper Book at pages 5 to 18, it emerges that the price realized from the ultimate customer is shared between the assessee and its Indian subsidiary, i.e. Celltick India, on 50-50 basis. The Assessing Officer has characterised such receipts as Royalty in the draft assessment order, whereas the DRP ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bsidiary, i.e. Celltick India, have been found to be at an arm s length price by the income-tax authorities in the case of the Indian subsidiary, i.e. Celltick India for the instant assessment year. 8. In view of the aforesaid discussion, in our view, since the appropriate arm s length principle has been satisfied in the present case, nothing more would be left to be taxable in India by attributing any further income to the PE of the assessee in India. Therefore, the point raised by the assessee by way of Ground of appeal no. 11 is allowed and the Assessing Officer is directed to delete the addition of ₹ 5,75,43,604/- made to the returned income. We hold so. 6. Since the issue has been squarely covered by the decision of Hon‟ble ITAT in the assessee‟s own case for the A.Y. 2012-13 dated 28.02.2019 (supra), therefore, we allowed the claim of the assessee and direct the assessee to delete the addition in sum of ₹ 6,36,07,608/-. ISSUE NOs. 2 to 8 7. Since the issue no. 9 has been decided in favor of the assessee, therefore, in the said circumstances, these issues have become academic in nature, hence, nowhere required to be decided. ..... 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