The UK Trade Desk Ltd. Vs ACIT (International Taxation-4(3)(1)

Parties Involved

Facts Summary

The assessee, The UK Trade Desk Ltd., is engaged in the business of providing technology and services related to internet advertising. It filed its return of income for the assessment year 2022-23 declaring Nil income. The case was selected for scrutiny. During the assessment, the assessing officer noted that the assessee has associated enterprises (AE) in India, namely TTD India, through which its business is carried out in India. The assessing officer held that TTD India (AE) of the assessee focused on generating new leads and liaising with existing clients to promote new products, thereby acting as a dependent agent of the assessee company. The assessing officer issued a show cause notice proposing that 25% of revenue from Indian operations should be attributed to the Indian entity and why 20% profit should not be estimated from India operations by invoking Rule 10. The assessee filed a detailed reply, arguing that no profit should be attributed to the Permanent Establishment (PE) in India as the transaction between the assessee and its AE is at arm’s length price. The assessing officer, however, upheld the addition, which was later confirmed by the Dispute Resolution Panel (DRP). Aggrieved by this, the assessee filed the present appeal before the Tribunal.…

Legal Issues

• 1. Whether the final assessment order passed by the Assistant Commissioner of Income-tax (International Taxation) suffers from legal defects.
• 2. Whether the Impugned order is void-ab-initio, invalid, without jurisdiction, and bad in law on account of being barred by the period of limitation prescribed under Section 153 of the Act.
• 3. Whether the Lower Authorities erroneously applied Section 9(1)(i) of the Act and whether further profits could be attributed to the Permanent Establishment (PE) when the Indian Associated Enterprise (AE) is remunerated at arm’s length.
• 4. Erroneous computation of interest and demand.

Judgment Outcome

Decided in favour of Assessee.

Precedents Relied Upon

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