The Tax Publishers2020 TaxPub(DT) 4420 (Del-Trib)

INCOME TAX ACT, 1961

Section 143(3) Section 4 Section 5

Following the consistent decisions of the Tribunal in assessee's own case in the preceding assessment years and in absence of any contrary material brought to notice against the decision of the Tribunal, MIPL was not a Dependent Agency Permanent Establishment of the assessee.

Assessment - Addition to income - Dependent Agent Permanent Establishment (DAPE] -

Assessee company incorporated in Japan and was one of biggest trading houses of the world. The assessee was involved in trading from needle to airplane engines. Assessee also undertakes several projects. AO asked the assessee to explain why Mitsui India (P) Ltd. (MIPL) should not be treated Department Agent Permanent Establishment (DAPE) in India and also why the assessment should not be completed as per the preceding assessment year. Rejecting various explanations given by the assessee the AO held that MIPL was DAPE of Mitsui & Co. (Assessee) Japan. CIT(A) upheld the view of the AO that MIPL had been constituted as a dependent agency permanent establishment of the assessee company in India. He however, held that 20% of the gross trading profit was to be attributable to the operations of the assessee in India. CIT(A) held that only 20% of the gross trading profit out of the operations in India as against 50% determined by the AO was attributable to the Indian operations. He allowed deduction of commission to the permanent establishment of the assessee at Rs. 84,06,07,736 as against Rs. 35,33,48,865 determined by the AO. Held: The order of the CIT(A) in holding that Mitsui India (P) Ltd. had been constituted as a Dependent Agency Permanent Establishment of the assessee company in India, the issue stands squarely covered in favour of the assessee by the Tribunal in assessee's own case for assessment year 2010-11. Tribunal vide ITA No. 4377/Del/2016, Order, dated 2-9-2020 for the assessment year 2010-11 had held that MIPL was not a DAPE of assessee. Following the consistent decisions of the Tribunal in assessee's own case in the preceding assessment years and in absence of any contrary material brought to notice against the decision of the Tribunal, MIPL was not a Dependent Agency Permanent Establishment of the assessee.

Followed:ITA No. 4377/Del/2016, dated 22-9-2020 for the assesment year 2010-11.

REFERRED :

FAVOUR : In assessee's favour.

A.Y. : 2012-13


INCOME TAX ACT, 1961

Section 37(1) Section 143(3) Section 92C

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