Eagle Ltd. a company incorporated in Country Z is an associated enterprise of Nova Inc. of USA. Eagle Ltd. has a branch in India since 2011. It…

Eagle Ltd. a company incorporated in Country Z is an associated enterprise of Nova Inc. of USA. Eagle Ltd. has a branch in India since 2011. It sells goods to Indian customers by importing from various countries, besides selling in India the goods manufactured by it in Country Z. The adjusted total income of the Indian branch of Eagle Ltd. for the year ended 31 st March, 2025 is 90 lakhs. The branch incurred 14 lakhs by way of executive and general administrative expenditure during the financial year 2024-25. The head office has allocated 21 lakhs as the branch’s share of head office expenditure, including 14 lakhs incurred by the branch. A survey under section 133A of the Act was conducted in its branch premises in January, 2024, and unexplained investments of 1 crore were found. Assessment for the assessment year 2024-25 was completed by making addition of the entire unexplained investments of 1 crore. The assessee preferred an appeal before CIT (Appeals), who gave complete relief to the assessee. The Income-tax Department now intends to file an appeal before ITAT on 18 th November 2024. N (P) Ltd., an Indian company and a wholly owned subsidiary of Eagle Ltd., paid 60 lakhs to ABC Inc. of Country N as fee for technical services (FTS). The services were rendered by the employees of the branch of ABC Inc. in India. There is no DTAA between India and Country N. N (P) Ltd. has entered into certain international transactions during the P.Y. 2023-24 and P.Y. 2024-25. N (P) Ltd. invested in TT (P) Ltd. of Country W and received dividend of 600 lakhs during the financial year 2024-25. It declared and distributed interim dividend of 300 lakhs on 10.11.2024 and a final dividend of 260 lakhs on 12.11.2025. N (P) Ltd. filed its return of income on 15.11.2024 for A.Y. 2024-25 and on 30.11.2025 for A.Y. 2025-26.