DIT v. Morgan Stanley & Co.

Hyatt International Southwest Asia Ltd., United Arab Emirates vs. DCIT (International Taxation), New Delhi

In the result, the appeals of the assessee are dismissed

Bench: Sh. H. S. Sidhudr. B. R. R. Kumarita No. 579/Del/2013 : Asstt. Year : 2009-10 Hyatt International-Southwest Vs Additional Director Of Income Asia Ltd., Office 301, Level 3, Tax, Range-1, International Precinct 3, Dubai International Taxation, New Delhi Financial Centre (Difc), Po Box – 506727, Dubai (Appellant) (Respondent) Pan No. Aacch2598H Ita No. 779/Del/2014 : Asstt. Year : 2010-11 Hyatt International-Southwest Vs Assistant Director Of Income Asia Ltd., Office 301, Level 3, Tax, Circle-1(2), International Precinct 3, Dubai International Taxation, New Delhi Financial Centre (Difc), Po Box – 506727, Dubai (Appellant) (Respondent) Pan No. Aacch2598H Ita No. 1762/Del/2015 : Asstt. Year : 2011-12 Hyatt International-Southwest Vs Additional Director Of Income Asia Ltd., Office 301, Level 3, Tax, Range-2(1), International Precinct 3, Dubai International Taxation, New Delhi Financial Centre (Difc), Po Box – 506727, Dubai (Appellant) (Respondent) Pan No. Aacch2598H Ita No. 957/Del/2016 : Asstt. Year : 2012-13 Hyatt International-Southwest Vs Deputy Commissioner Of Asia Ltd., Office 301, Level 3, Income Tax, Circle-2(1)(1), Precinct 3, Dubai International International Taxation, New Financial Centre (Difc), Delhi Po Box – 506727, Dubai (Appellant) (Respondent) Pan No. Aacch2598H

…sion of Galileo International Inc. V. DCIT[2009] 116 ITD 1 (Del) which upheld similar principle. ITA No. 579/Del/2013, ITA No. 779/Del/2014, 20 ITA No. 1762/Del/2015 & ITA No. 957/Del/2016 xi.) The Supreme Court in the case of Morgan Stanley and Co. (2007) 292 ITR 416 (SC) has held that the following two conditions need to be satisfied in order to create a fixed base PE: - Existence of a fixed place of business; and - Carrying out of business from such fixed place of business xii.) There have been several other judicial precedents supporting the above principles / proposition initially laid down by the OECD.…

Hyatt International Southwest Asia Ltd., Gurgaon vs. Addl. CIT, New Delhi

In the result, the appeals of the assessee are dismissed

Bench: Sh. H. S. Sidhudr. B. R. R. Kumarita No. 579/Del/2013 : Asstt. Year : 2009-10 Hyatt International-Southwest Vs Additional Director Of Income Asia Ltd., Office 301, Level 3, Tax, Range-1, International Precinct 3, Dubai International Taxation, New Delhi Financial Centre (Difc), Po Box – 506727, Dubai (Appellant) (Respondent) Pan No. Aacch2598H Ita No. 779/Del/2014 : Asstt. Year : 2010-11 Hyatt International-Southwest Vs Assistant Director Of Income Asia Ltd., Office 301, Level 3, Tax, Circle-1(2), International Precinct 3, Dubai International Taxation, New Delhi Financial Centre (Difc), Po Box – 506727, Dubai (Appellant) (Respondent) Pan No. Aacch2598H Ita No. 1762/Del/2015 : Asstt. Year : 2011-12 Hyatt International-Southwest Vs Additional Director Of Income Asia Ltd., Office 301, Level 3, Tax, Range-2(1), International Precinct 3, Dubai International Taxation, New Delhi Financial Centre (Difc), Po Box – 506727, Dubai (Appellant) (Respondent) Pan No. Aacch2598H Ita No. 957/Del/2016 : Asstt. Year : 2012-13 Hyatt International-Southwest Vs Deputy Commissioner Of Asia Ltd., Office 301, Level 3, Income Tax, Circle-2(1)(1), Precinct 3, Dubai International International Taxation, New Financial Centre (Difc), Delhi Po Box – 506727, Dubai (Appellant) (Respondent) Pan No. Aacch2598H

…sion of Galileo International Inc. V. DCIT[2009] 116 ITD 1 (Del) which upheld similar principle. ITA No. 579/Del/2013, ITA No. 779/Del/2014, 20 ITA No. 1762/Del/2015 & ITA No. 957/Del/2016 xi.) The Supreme Court in the case of Morgan Stanley and Co. (2007) 292 ITR 416 (SC) has held that the following two conditions need to be satisfied in order to create a fixed base PE: - Existence of a fixed place of business; and - Carrying out of business from such fixed place of business xii.) There have been several other judicial precedents supporting the above principles / proposition initially laid down by the OECD.…

M/S. Hyatt International Southwest Asia Ltd., Gurgaon vs. ADIT, New Delhi

In the result, the appeals of the assessee are dismissed

Bench: Sh. H. S. Sidhudr. B. R. R. Kumarita No. 579/Del/2013 : Asstt. Year : 2009-10 Hyatt International-Southwest Vs Additional Director Of Income Asia Ltd., Office 301, Level 3, Tax, Range-1, International Precinct 3, Dubai International Taxation, New Delhi Financial Centre (Difc), Po Box – 506727, Dubai (Appellant) (Respondent) Pan No. Aacch2598H Ita No. 779/Del/2014 : Asstt. Year : 2010-11 Hyatt International-Southwest Vs Assistant Director Of Income Asia Ltd., Office 301, Level 3, Tax, Circle-1(2), International Precinct 3, Dubai International Taxation, New Delhi Financial Centre (Difc), Po Box – 506727, Dubai (Appellant) (Respondent) Pan No. Aacch2598H Ita No. 1762/Del/2015 : Asstt. Year : 2011-12 Hyatt International-Southwest Vs Additional Director Of Income Asia Ltd., Office 301, Level 3, Tax, Range-2(1), International Precinct 3, Dubai International Taxation, New Delhi Financial Centre (Difc), Po Box – 506727, Dubai (Appellant) (Respondent) Pan No. Aacch2598H Ita No. 957/Del/2016 : Asstt. Year : 2012-13 Hyatt International-Southwest Vs Deputy Commissioner Of Asia Ltd., Office 301, Level 3, Income Tax, Circle-2(1)(1), Precinct 3, Dubai International International Taxation, New Financial Centre (Difc), Delhi Po Box – 506727, Dubai (Appellant) (Respondent) Pan No. Aacch2598H

…sion of Galileo International Inc. V. DCIT[2009] 116 ITD 1 (Del) which upheld similar principle. ITA No. 579/Del/2013, ITA No. 779/Del/2014, 20 ITA No. 1762/Del/2015 & ITA No. 957/Del/2016 xi.) The Supreme Court in the case of Morgan Stanley and Co. (2007) 292 ITR 416 (SC) has held that the following two conditions need to be satisfied in order to create a fixed base PE: - Existence of a fixed place of business; and - Carrying out of business from such fixed place of business xii.) There have been several other judicial precedents supporting the above principles / proposition initially laid down by the OECD.…

M/S. Hyatt International-Southwest Asia Ltd vs. ADIT, New Delhi

In the result, the appeals of the assessee are dismissed

Bench: Sh. H. S. Sidhudr. B. R. R. Kumarita No. 579/Del/2013 : Asstt. Year : 2009-10 Hyatt International-Southwest Vs Additional Director Of Income Asia Ltd., Office 301, Level 3, Tax, Range-1, International Precinct 3, Dubai International Taxation, New Delhi Financial Centre (Difc), Po Box – 506727, Dubai (Appellant) (Respondent) Pan No. Aacch2598H Ita No. 779/Del/2014 : Asstt. Year : 2010-11 Hyatt International-Southwest Vs Assistant Director Of Income Asia Ltd., Office 301, Level 3, Tax, Circle-1(2), International Precinct 3, Dubai International Taxation, New Delhi Financial Centre (Difc), Po Box – 506727, Dubai (Appellant) (Respondent) Pan No. Aacch2598H Ita No. 1762/Del/2015 : Asstt. Year : 2011-12 Hyatt International-Southwest Vs Additional Director Of Income Asia Ltd., Office 301, Level 3, Tax, Range-2(1), International Precinct 3, Dubai International Taxation, New Delhi Financial Centre (Difc), Po Box – 506727, Dubai (Appellant) (Respondent) Pan No. Aacch2598H Ita No. 957/Del/2016 : Asstt. Year : 2012-13 Hyatt International-Southwest Vs Deputy Commissioner Of Asia Ltd., Office 301, Level 3, Income Tax, Circle-2(1)(1), Precinct 3, Dubai International International Taxation, New Financial Centre (Difc), Delhi Po Box – 506727, Dubai (Appellant) (Respondent) Pan No. Aacch2598H

…sion of Galileo International Inc. V. DCIT[2009] 116 ITD 1 (Del) which upheld similar principle. ITA No. 579/Del/2013, ITA No. 779/Del/2014, 20 ITA No. 1762/Del/2015 & ITA No. 957/Del/2016 xi.) The Supreme Court in the case of Morgan Stanley and Co. (2007) 292 ITR 416 (SC) has held that the following two conditions need to be satisfied in order to create a fixed base PE: - Existence of a fixed place of business; and - Carrying out of business from such fixed place of business xii.) There have been several other judicial precedents supporting the above principles / proposition initially laid down by the OECD.…

M/S. Lummus Technology Heat Transfer Bv, Gurgaon vs. DCIT, Gurgaon

Bench: Shri N.K. Billaiya & Shri Kuldip Singh

…BO and HO and after conducting FAR analysis the same has been compensated on arm’s level basis. In these circumstances, no further attribution of profit to BO can be made. 67. Hon’ble Supreme Court in the case of DIT vs. Morgan Stanley and Co. Inc. (2007) 292 ITR 416 (SC) decided the issue by returning following findings :- 40 “As regards attribution of further profits to the PE of MSCo where the transaction between the two are held to be at arm's length, we hold that the ruling is correct in principle provided that an associated enterprise (that also constitutes a PE) is remunerated on arm's length basis ta…

The Commissioner of Income Tax - International Taxation -3 vs. Honda Motors Co. Ltd

Bench: HON'BLE MR. JUSTICE VIPIN SANGHI,HON'BLE MR. JUSTICE SANJEEV NARULA

…$~29. * IN THE HIGH COURT OF DELHI AT NEW DELHI + ITA 945/2019 THE COMMISSIONER OF INCOME TAX - INTERNATIONAL TAXATION -3 ..... Appellant Through: Mr. Ruchir Bhatia, Advocate. versus HONDA MOTORS CO. LTD. ..... Respondent Through: Mr. Shashi Mathews, Mr. Abhishek Boob and Mr. Vipin Upadhyay, Advocates. CORAM: HON'BLE MR. JUSTICE VIPIN SANGHI HON'BLE MR. JUSTICE SANJEEV NARULA O R D E R % 08.11.2019 The present appeal is directed against the order dated 10.05.2019 passed by Income Tax Appellate Tribunal „(ITAT)‟ Delhi Bench “I-1”: New De…

M/S. Giesecke & Devrient India Pvt. Ltd., Gurgaon vs. DCIT, New Delhi

In the result, the appeal of the assessee is allowed

Bench: Sh. Sudhanshu Srivastavadr. B. R. R. Kumarita No. 1431/Del/2016 : Asstt. Year : 2011-12 M/S Giesecke & Devrient India Vs Deputy Commissioner Of Pvt. Ltd., Corporate Office- Plot Income Tax, Circle-10(1), # 57, Sector 44, New Delhi Gurgaon-122003, Haryana (Appellant) (Respondent) Pan No. Aabcg4223D Assessee By : Sh. Harpreet Singh Ajmani & Sh. Rohan Khare, Advs. Revenue By : Sh. Sanjay I. Bara, Cit Dr Date Of Hearing: 05.09.2019 Date Of Pronouncement: 30.10.2019

…f this case. 93.56% of revenue is coming from the export of software development only. Functionally Infosys is on a different format whereas L&T is similar. Keeping in view, the judgment of Hon’ble Supreme Court in the case of Morgan Stanley and Company Inc. [292 ITR 416] regarding the functions and comparability thereof, we hold that this can be included an appropriate comparable. Persistent Systems and Solutions Ltd.: 21. It was argued by the ld. AR that this comparable is functionally different as it is engaged in software development and software products also. He also argued that owing to lack of segmental…

Hitachi High- Technologies (Singapore) Pte Ltd., New Delhi vs. DCIT, New Delhi

In the result, the appeals of the assessee in ITA Nos

Bench: Shri N.K. Billaiya & Ms. Suchitra Kamble

…rom those products in relation to which LO held to be involved in negotiation and conclusion of order in India. 81. The ld. counsel for the assessee drew our attention to the decision of the Hon'ble Supreme Court in the case of DIT vs. Morgan Stanley & Co. [292 ITR 416 (SC)] in which the Hon'ble Supreme Court has held that the income attribution to the PE has to be done with reference to analysis of functions performed, assets employed and risks assumed. It is the say of the ld. counsel for the assessee that no opportunity was provided to controvert the basis for taxing the income of Appellant in India. The l…

Lg Electronics Inc., Korea (Lgek), Noida vs. DCIT, Circle- 2(2)(1), International Taxation, New Delhi

In the result all the 9 appeals filed by the assessee are allowed with above direction for statistical purposes

Bench: Smt Diva Singh & Shri Prashant Maharishi

…to be at arm’s length in the transfer pricing assessments of, both, the Appellant as well LGEIL, there can be no further attribution of profit to the alleged PE. For this proposition he relied up on Hon. Supreme Court’s decision in the case of Morgan Stanley (292 ITR 416) , Director of Income Tax V. E-Funds IT Solution [2017 (399 ITR 34) (SC)] , order dated 14.03.2018 in CA no. 2833 of 2018 in the case of Honda Motor Company Japan. He submitted that arm’s length principle as the primary basis for attributing profit to PE laid down by the Hon’ble Supreme Court, has been extensively followed High Courts / benches o…

M/S. Lg Electronics Inc., Korea (Lgek), Noida vs. DCIT (International Taxation), Noida

In the result all the 9 appeals filed by the assessee are allowed with above direction for statistical purposes

Bench: Smt Diva Singh & Shri Prashant Maharishi

…to be at arm’s length in the transfer pricing assessments of, both, the Appellant as well LGEIL, there can be no further attribution of profit to the alleged PE. For this proposition he relied up on Hon. Supreme Court’s decision in the case of Morgan Stanley (292 ITR 416) , Director of Income Tax V. E-Funds IT Solution [2017 (399 ITR 34) (SC)] , order dated 14.03.2018 in CA no. 2833 of 2018 in the case of Honda Motor Company Japan. He submitted that arm’s length principle as the primary basis for attributing profit to PE laid down by the Hon’ble Supreme Court, has been extensively followed High Courts / benches o…

Lg Electronics Inc., Korea (Lgek), Noida vs. DCIT, Circle- Noida, International Taxation, Noida

In the result all the 9 appeals filed by the assessee are allowed with above direction for statistical purposes

Bench: Smt Diva Singh & Shri Prashant Maharishi

…to be at arm’s length in the transfer pricing assessments of, both, the Appellant as well LGEIL, there can be no further attribution of profit to the alleged PE. For this proposition he relied up on Hon. Supreme Court’s decision in the case of Morgan Stanley (292 ITR 416) , Director of Income Tax V. E-Funds IT Solution [2017 (399 ITR 34) (SC)] , order dated 14.03.2018 in CA no. 2833 of 2018 in the case of Honda Motor Company Japan. He submitted that arm’s length principle as the primary basis for attributing profit to PE laid down by the Hon’ble Supreme Court, has been extensively followed High Courts / benches o…

Amadeus Global Travel Distribution Sa, Spain vs. ADIT, New Delhi

The appeal of the assessee is allowed with above direction

Bench: Shri Kuldip Singh & Shri Prashant Maharishiamadeus Global Travel Vs. Adit, Distribution Sa Circle-1(1), (Now Known As Amadeus It International Taxation, Group Sa), New Delhi Salvador De Madariaga, E- 28027, Madrid, Spain Pan: Aafca9629P (Appellant) (Respondent)

…puters to travel agents in India, which is the main premise on which the appellant is held to have a Fixed place PE in India. The assessing officerhad also placed reliance upon the decision of the Supreme Court in the case of DIT v. Morgan Stanley & Co. Inc: 292 ITR 416, to contend that if the activities of the non-resident are not wholly channeled through the agent in India and agent‘s remuneration does not take into account all the risk functions performed in India, then Circular No. 23 of 1969, would not apply and further attribution of income can be made in the hands of the PE of the non-resident in India. I…