9911796707
TMI Blog2022 (5) TMI 1057X X X X Extracts X X X X X X X X Extracts X X X X ..... ian subsidiary as income - mark-up of 1% was added to the cost of services - as per AO assessee short reflected income - HELD THAT:- It is found as an admitted position that the sum of Rs.29.50 lakh charged by the assessee is inclusive of 1% mark-up to the actual costs incurred by the assessee. The ld. AR however, contended that only mark-up of 1% should be brought to tax and not the full amount. We are unable to countenance the proposition propounded by the ld. AR for the obvious reason that the sum of Rs.29.50 lakh is admittedly not reimbursement as it has a mark-up added to it. Once a particular receipt is not reimbursement and also includes mark-up, it becomes chargeable to tax in the gross taxation regime. On a specific query, the ld. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Assessing Officer (AO) held in draft order that the assessee was having a Permanent establishment (PE) in India in the form of its Indian subsidiary, namely, M/s EPCOS India Private Ltd. (EIPL). This view was canvassed on the basis of similar decision taken by him in earlier years. In the final analysis, he held that because of the assessee s PE in India, the first two items of income, namely, Support services offered by the assessee as Fees for technical services and Royalty were liable to tax at 10% on gross basis. The Dispute Resolution Panel (DRP) approved the action of AO in treating the assessee s Indian subsidiary as its PE. There is no dispute on the Interest earned on ECB loans amounting to Rs.6.23 crores, for which necessary relie ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... asons, the assessee submitted that the receipt was in the nature of reimbursement of expenses. The AO has given break-up of such amount at page 25 of the draft order. On going through the corresponding Debit notes, he observed that mark-up of 1% was added to the cost of services. He, therefore, held that Rs.29.50 lakhs was liable to tax in India at 10%, being, the rate applied by him on FTS/Royalty. The DRP accorded its imprimatur to the view point of the AO, which led to the making of the addition in the final assessment order. 5. Having heard the rival submissions and perused the relevant material on record, it is found as an admitted position that the sum of Rs.29.50 lakh charged by the assessee is inclusive of 1% mark-up to the actua ..... X X X X Extracts X X X X X X X X Extracts X X X X
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