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TMI Blog2025 (2) TMI 648X X X X Extracts X X X X X X X X Extracts X X X X ..... f the Philippine's branch in its profit & loss account prepared in India for the company as a whole and has offered the income earned in Philippine's to tax in India. As required by the Article 24 of the DTAA, the assessee has computed the taxable income of the Philippines branch as per the provisions of Indian Income Tax Act to determine the income doubly taxed in India & Philippines. Such doubly taxed income worked out to Rs. 13,32,45,195/- which has been mentioned in the Form no 67. From the entire events and accounting, it is clear that the income as mentioned in the notice of Rs. 29,17,91,560/- being 100% of the tax payable in Manila of Rs. 8,75,37,468/- @ 30% is taxed in India. Accordingly, no further income needs to be taxed i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o Sub-Section (1) of Section 263 of the Act while holding that the assessment order was passed without proper enquiry and verification of facts when in fact inquiry had been made-and-details were submitted in the course of regular assessment proceedings. It is submitted it be so held now. 2.2. The learned PCIT erred in facts and in law in holding that the contention raised by the Appellant necessitates re-verification of the matter in its entirety without appreciating that Section 263 does not confer the power to re-review the same set of records. It is submitted it be so held now. 3. The learned PCIT has erred in law and in facts in not appreciating that during assessment proceedings inquiry regarding deduction under Section 90 was mad ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as of the opinion that since the assessee had paid tax of Rs. 8,75,37,468/- in Philippines @ 30%, then the income offered by the assessee in Philippines should be at least Rs. 29,17,91,560/-; therefore, instead of offering income of Rs. 29,17,91,560/-, the assessee had only offered the income of Rs. 13,32,45,195/- from Philippines, thereby the assessee had not offered the correct income for taxation in India which resulted in under-assessment of Rs. 15,85,46,365/- (291791560- 133245195). 4. The Ld. PCIT accordingly held that the assessment order passed by the Assessing Officer u/s 143(3) of the Act dated 20.09.2021 was erroneous and prejudicial to the interest of the Revenue. She therefore set aside the issue and directed the Assessing Off ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Philippines. * Since Form no.67, tax paid outside India is mentioned at Rs. 8,75,37,468/- and tax rate is 30%, accordingly the Ld. PCIT held that the income of Philippines branch ought to have been Rs. 29,17,91,560/-. The Ld. AR submitted that as per Philippines law the tax is computed on gross income without granting deduction of operating expenses. The Ld. AR enclosed the Financials of the Philippines branch along with the copy of the return of income filed in Philippines Branch. 6. On the other hand, Ld. DR submitted that :- * The assessee has tried to demonstrate that taxable income in Philippine's tax return of Peso 23,48,74,438/-, INR. 29,76,23,986/- has already considered in the taxable income of Rs. 13,32,45,195/-. * The Ld. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... espect to the above issue was conducted by the then AO during the course of assessment proceeding. Failure to do so, has resulted in underassessment of Rs. 15,85,46,365/-. * The Ld DR argued that the Assessing Officer has failed to bring the above details on record and did not verify the above issue in its right perspective or on the above lines. Thus, the income of the assessee has resulted in underassessment of Rs. 15,85,46,365/-. Therefore, the impugned assessment order is erroneous and it is prejudicial to the interest of revenue, as income was under assessed leading to the loss of revenue. 7. Heard both the parties and perused the material available on record. 7.1 From financials, we find that the income before taxes is PHP 11,15,0 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 549,025 695,704 Leave expense reversed later in PH financials 2,355,907 2,985,316 Intercompany transactions (Write off of IC balance between India and PH) 2,863,639 3,628,695 Additional Expenses booked for provision for salary expense 3,015,670 3,821,343 Profit before tax 97,542,412 123,602,048 Profit before tax in India books 37,542,412 123,602,048 Based on the profit as per books in India, taxable income under Indian Income Tax Act has been worked out as under: Particulars Amount (INR) Profit before tax 12,36,02,048 Add: Depreciation as per Companies Act 20,098,451 Penalties disallowed u/s 37 69,980 Bonus, leave encashment & gratuity u/s 43B 1,04,58,526 Provision for Bad debts 19,62,593 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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