Facts:
1) The assessee, M/s Brown & Sharpe Inc.
incorporated in USA,had started a LO in India for which permission of the RBI
was taken.
2) The Assessing Officer held that since LO
was promoting sales of assessee’s product, income attributable to LO’s
activities was taxable in India.
The Tribunal held in favour of revenue as
under:
1) The assessee-company was registered with
the Registrar of Companies in India for carrying on the business. The LO, apart
from having Chief Representative Officer and other staff, was also having a technical
expert;
2) The employees of LO were promoting the sales
of the goods of the assessee-company as per service conditions.There was a
sales incentive plan by which employees were provided the incentive for
achieving the sales target and the performance of the employees was being judged
by the orders secured by the assessee-company;
3) All these activities established that the LO
of the assessee was promoting the sales of the assessee-company in India and,
therefore, the revenue was fully justified in holding that the income
attributable to LO was taxable in India;
4) The liaison office received more amount than
the expenses actually incurred by it. Thus,the sum received by it over and
above the expenses actually incurred, year after year, were rightly treated as
income by revenue. - Brown & Sharpe Inc. v. ACIT (2014) 41 taxmann.com 345 (Delhi - Trib.)
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