Live Help
Your Session Will Expire in   seconds.
What should we do?
Reset SessionCancel Session
 

ITAT remands matter to DRP to decide the issue of existence of LG’s PE in India on basis of concurrent findings

September 5, 2019[2019] 109 taxmann.com 36 (Delhi - Trib.)
75 Views

International Taxation : Matter remanded to DRP to decide issue of existence of permanent establishment and consequent profit attribution thereto when DRP passed order under presumption that assessee has conceded aspect of existence of its permanent establishment in India but assessee denies said fact and DRP has not at all given any finding on existence of permanent establishment of assessee in India

Facts : The assessee, South Korean company, engaged in manufacture of household appliances, has entered into several transactions relating to sale of raw materials and finished goods with its wholly owned subsidiary 'LG India' but no tax was deducted by LG India, the payer, on offshore supplies since no portion of income arising from such supplies arose in India. Assessing Officer held that assessee has a business connection in India as 'LG India' was legally and economically dependent on assessee and that assessee exercised total control over 'LG India' and attributed an income in addition to the returned income as income allocable to the assessee's PE in India. The DRP without considering the profit attribution by the Assessing Officer directed him to take the profit attribution at 20 per cent of profit margin.

Held : The Tribunal observed that Dispute Resolution Panel has gone under the presumption that assessee has conceded the aspect of the existence of its permanent establishment in India but assessee denies the said fact and says that it has never considered the issue of the existence of the permanent establishment, and since there is no clear-cut admission of the assessee of the existence of the PE before the Dispute Resolution Panel and, the Dispute Resolution Panel has not at all given any finding on the existence of the permanent establishment of the assessee in India and in its own understanding, rightly or wrongly, considered the concession by the assessee on this issue and has not directed the Assessing Officer on its merit about the existence of PE, the appeals of the assessee were remitted back to the file of the Dispute Resolution Panel to decide the issue of existence of the permanent establishment and consequent profit attribution thereto.

read more

taxmann.com
Payment
Best view in 1140 x 768