There is no satisfaction recorded by AO before initiating proceedings under section 153C. Inspite of giving sufficiently adequate time to the Revenue for production of the necessary records and considering the fact that AO refused to allow inspection to assessee as recorded by the bench on 20.04.2011, we have no option than to take an adverse view that no satisfaction was recorded by AO before issuance of notice under section 1 53C.
It is observed that the amount in question payable by BAH India to the USA entity was not paid during the year under consideration and there is no dispute about the same. The said amount payable to the USA entity has been brought to tax in India in its hands by the Revenue authorities as fees for technical services. As per the relevant provisions of the Double Taxation Avoidance Treaty between India and the USA
Dresser Rand Company, USA was covered by Indo-US DTAA and as per Article 12(4) of the said Treaty, technical and consultancy services were not taxable in India and there was no obligation to deduct tax at source for the payment and such technical and consultancy services.
‘Force of attraction rule’ as explained in Article 7(3) of India-UK DTAA – Where a permanent establishment takes an active part in negotiation, concluding or fulfilling contracts entered into by the enterprise, then, notwithstanding that other parts of the enterprise have also participated in those transactions, that proportion of profits of the enterprise arising out of these contracts
This appeal by the revenue is directed against the order dated 16.4.2004 of the Commissioner of Income Tax (Appeals) for the Assessment Year 2001-02.
This is a Revenue appeal against the orders of the CIT (A)-10 Mumbai dated 30.07.2010. The Revenue has raised two grounds which are as under:
Coming to the applicability of most appropriate method, both the parties have agreed that TNMM Method should be most appropriate method for benchmarking the ALP. The contention of learned CITDR is that before the TPO, even though this plea of applicability of TNMM Method was taken by the assessee by way of corroborated method, has neither considered the same nor examined it properly.
As regards the method to be adopted for comparability analysis, the contention of the revenue that CUP is the most appropriate method in the facts and circumstances of the case especially when internal comparables are available for the comparability analysis, has to be accepted. Therefore, there is no infirmity in the action of the Assessing Officer/TPO in adopting CUP method for comparability analysis instead of TNMM applied by the assessee.
The assessee has got the occupancy right in perpetuity as assessee can transfer his occupancy rights of the premises under consideration by way of sale to a third party subject to condition that transferee is to deposit the required amount of interest free security deposit with HPPL. The consideration to be received by the assessee on transfer of his occupancy right is not to be refunded to HPPL.
Article 3(2) in most of the Treaties including the India-USA DTAA provides that any term not defined in the Convention shall unless the context otherwise requires, have the meaning which it has under the laws of that State concerning tax to which the Convention applies.
