DDIT, NEW DELHI vs. M/S. NIPRO ASIA PTE. LTD., SATARA

This appeal by the Revenue arises out of the order passed by the CIT(A) on 29.04.2013 in relation to the assessment year 2004-05.

The only issue raised in this appeal is against the attribution of income by the ld. CIT(A) at a mark-up of 15% on costs incurred as against the Assessing Officer's profit attribution to sales activity in India at 40% of the profit from sales made in India.

We have heard the rival submissions and perused the relevant material on record. Appeal of the assessee for the A.Y. 2003-04 was fixed for hearing along with this appeal. Both the sides have made elaborate arguments for the A.Y. 2003-04. It was fairly admitted that facts and circumstances of the instant appeal are mutatis mutandis similar to those of the preceding year. In fact, no separate argument was made by the either side.

We have passed a separate order for the A.Y. 2003-04 holding that 10% of the total sales made by the assessee in India, whether directly or through its branch office in India, should be taken as overall profit. Then we have attributed 30% of such profit to the marketing effort put in by the Indian branch office. That is how, 3% of the total sales has been determined as the total income of the assessee. Following the same view, the amount of sales in India comes to Rs.17,21,31,771 (USD 39,24,573 * Rs.43.86) and total income chargeable to tax at the rate of 3% of such amount of sales is determined at Rs.51,63,953. We order accordingly.

In the result, the appeal is partly allowed.