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TMI Blog2019 (4) TMI 2073X X X X Extracts X X X X X X X X Extracts X X X X ..... n of the services rendered by the Hempel India to the assessee, the former charges commission based on percentage of sales to the later under the arm's length principle. In view of the above, the learned Counsel for the assessee took us through the Tribunals order in assessee's own case for AY 2014-15 [ 2019 (2) TMI 2044 - ITAT MUMBAI] wherein Tribunal has considered this issue and held that there is no dispute about the existence of assessee's agency PE in India but held that a foreign company is liable to be taxed in India on so much of its business profit as is attributable to its PE in India. The Tribunal accepted the assessee's cost plus 8.17% markup as commission on sales and deleted the addition made by AO / DRP, who ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e being recipient of such commission income. For this assessee has raised the following 6 grounds: - 1. On the facts and circumstances of the case and in law, the Hon'ble Dispute Resolution Panel ('Hon'ble DRP') / Learned Assessing Officer ('Ld. AO') erred in further attributing Rs. 6,23,87,957 as income of the Permanent Establishment (PE) of the Appellant, taxable in India. 2. On the facts and circumstances of the case and in law, the Hon'ble DRP / [Ld. AO erred in not appreciating that the Appellant has attributed the appropriate profits having regard to the operations that are carried out in India as required under section 9 of the Income-tax Act, 1961 ('IT Act). The Appellant prays that the return ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion of Instruction NO. 3012016 issued by the CBDT; 5.6 determining an ad-hoc attribution of profits, without any basis / comparative study and without considering the audited financial statement for the year ended on 31 December 2014. 6. On the facts and circumstances of the case and in law, the Hon'ble DRP / Ld. AO erred in: 6.1 not appreciating that no further attribution of income is warranted, once the international transaction has been accepted to be at arm's length price in the assessment proceeding of respective Indian entity i.e. Hempel Paints (India) Pvt. Ltd. ('Hempel India') who is recipient of such commission income; - 6.2 not considering the fact that for the same nature of transaction there could n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s revenue from India arising from above business activity. The rights and responsibilities under the agency agreements between the Assessee and Hempel India created Agency Permanent Establishment (PE) of the assessee in India as per Article 5(4) of the India - Singapore Tax Treaty. In consideration of the services rendered by the Hempel India to the assessee, the former charges commission based on percentage of sales to the later under the arm's length principle. In view of the above, the learned Counsel for the assessee took us through the Tribunals order in assessee's own case for AY 2014-15 in ITA No. 7296/Mum/2017 vide order dated 08.02.2019, wherein Tribunal has considered this issue and held that there is no dispute about the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sessee, once transfer pricing analysis of the transaction between assessee and its agent in India has been undertaken, there is no further need to attribute profits to the agency PE so long as the remuneration to the Indian agent has been held to be at an arm's length price. Undoubtedly, the proposition sought to be canvassed by the assessee has the approval of Hon'ble Supreme Court in the case of M/s. Morgan Stanley Co. Inc (supra). The judgment of the Hon'ble Bombay High Court in the case of SET Satellite Singapore Pte Ltd. (supra) is also on the same lines in terms of which it is safe to draw the premise that if appropriate arm's length price has been found to have been applied and paid, nothing more would be left to be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Indian recipient of income. In our considered opinion, the ratio of the judgment of the Hon'ble Delhi High Court in the case of BBC Worldwise Ltd. (supra) is fully attracted in the present case and, therefore, the addition of Rs. 5,15,05,000/- to the returned income is clearly untenable in the facts of the instant case. We hold so. 9. Since we have deleted the addition on the aforesaid short point, which is covered by Ground of appeal no. 1 read with Ground of appeal no. 4, the other Grounds raised are rendered academic and there is no necessity to adjudicate the same. 4. The learned Sr. Departmental Representative agreed that the facts and circumstances are exactly identical. On the other hand, Ld Sr Dr could not controvert the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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