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59. It is further contended by the ld. AR for the taxpayer that AO has wrongly relied upon the order of Reserve Bank of India (RBI) dated 13.04.1999 because BO was granted specific approval by the RBI for performing certain activities which was restricted only to permit activities, and the income earned from such permitted activities has already been offered to tax in India.

60. No activities have been performed by the BO on behalf of the HO as presumed by the AO. Moreover, the taxpayer has specifically explained the functions performed and risk undertaken by the HO and BO in its TP study, relevant pages 558 to 590 of the paper book, showing activities of the BO being restricted to basic design and engineering services. Furthermore, HO was otherwise responsible for its own market development research and negotiation for contract.