prpri Reassessment merely based on allegation that appellant has PE in India cannot be sustained Reassessment merely based on allegation that appellant has PE in India cannot be sustained

Case Law Details

Case Name : Honda Motor Co. Ltd Vs ADIT (Supreme Court of India)
Appeal Number : Civil Appeal No.(s). 2833 Of 2018
Date of Judgement/Order : 5/8/2014
Related Assessment Year :

Honda Motor Co. Ltd Vs ADIT (Supreme Court of India)

In the judgment of this Court dated 24th October, 2017 in Assistant Director of Income Tax-I, New Delhi v. M/s. E-Funds IT Solution Inc., Civil Appeal NO.6082 of 2015 and connected matters, it has been held that once arm’s length principle has been satisfied, there can be no further profit attributable to a person even if it has a permanent establishment in India.

Since the impugned notice for the reassessment is based only on the allegation that the appellant(s) has permanent establishment in India, the notice cannot be sustained once arm’s length price procedure has been followed.

Accordingly, the impugned order(s) is set aside and the appeals are allowed.

Learned counsel for the Revenue states that he does not have complete instructions. If the Revenue disputes the above factual position, it will be at liberty to move this Court.

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