ASST. DIRECTOR OF INCOME TAX, Jaipur V. SHRI ASHISH RANIWALA, Jaipur

ITA 1002/JPR/2011

• Counselvise Citation: 100223114 RSA 2011
• Duration Of Justice: 3 year(s) 2 month(s) 26 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-02-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 19-11-2012
• Assessment Year: 2007-2008
• Appeal Filed On: 17-11-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: MADHUKAR GARG CA DHK
• Keywords: Retrospective amendment; Question of law; Tax effect
• Section: 201(1)

Judgement Text

VK;DJ VIHYH; VF/KDJ.K] T;IQJ U;K;IHB] T;IQJ IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHES, JAIPUR JH VKJ-IH-RKSYKUH] U;KF;D LNL; ,OA JH VH-VKJ-EHUK] YS[KK LNL; DS LE{K BEFORE: SHRI R.P. TOLANI, JM & SHRI T.R. MEENA, AM VK;DJ VIHY LA-@ ITA NOS. 1002,1003. 1004 & 1005 /JP/2011 FU/KZKJ.K O'K Z@ ASSESSMENT YEARS : 2007-08 TO 2010-11 THE ADIT (INTERNATIONAL TAXATION), JAIPUR CUKE VS. SHRI ASHISH RANIWALA PROP. M/S. HERITAGE, G-318, EPIP, SITAPURA INDUSTRIAL AREA, JAIPUR LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN/GIR NO .: AAZPR 1834 N VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT JKTLO DH VKSJ LS@ REVENUE BY : SHRI RAJESH OJHA (JCIT). FU/KZKFJRH DH VKSJ LS@ ASSESSEE BY : SHRI MADHUKAR GARG, CA LQUOKBZ DH RKJH[K@ DATE OF HEARING : 30/12/2014 ?KKS'K .KK DH RKJH[K@ DATE OF PRONOUNCEMENT : 13/02/2015 VKNS'K@ ORDER PER R.P. TOLANI, JM THIS IS A SET OF FOUR APPEALS FILED BY THE REVENU E AGAINST COMMON ORDER OF THE LD. CIT(A)-II, JAIPUR DATED 1-08-2011 FOR THE ASSESSMENT YEARS 2007-08 TO 2010-119 WHEREIN THE REVENUE HAS R AISED FOLLOWING COMMON GROUND:- ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW THE LD. CIT(A) HAS ERRED IN HOLDING THAT NO WITHHOLDING OF TAXES ARE REQUIRED U/S 195 ON THE PA YMENTS . 2 MADE BY THE ASSESSEE TO NON-RESIDENT FOR PURCHASE O F NEW DESIGNS OF FURNITURE CLEARLY BEING TRANSFER OF SPEC IAL KNOWLEDGE AND IN IGNORING THE FACT THAT CIRCULAR NO . 786 DATED 7-02-2000 HAS BEEN WITHDRAWN WITH RETROSPECTI VE EFFECT BY CIRCULAR NO. 7/2009 DATED 22-10-2009. 2.1 THE LD. COUNSEL FOR THE ASSESSEE AT THE OUTSET CONTENDS THAT TAX EFFECT IN EACH APPEALS OF THE REVENUE IS LOWER THAN RS. 3.00 LACS. THEREFORE, THE APPEALS OF THE REVENUE ARE NOT MAINT AINABLE AND THEY SHOULD BE DISMISSED ACCORDINGLY. THE LD. AR OF THE ASSESSEE RELIED ON ITAT VISHAKAPATNAM TRIBUNAL JUDGEMENT DATED 27 TH OCT. 2014 IN THE CASE OF ITO VS. PANCHAYAT SECRETARY BHADURCHLAM (20 14, 41 CCH 0213) WHEREIN THE ITAT, VISHAKAPATNAM BENCH HAS HOLD AS UNDER:- 2 AS COULD BE NOTICED, THE ISSUE PERTAINS TO APPLI CATION OF BOARD CIRCULAR TO WORKS EXECUTED UNDER SHG SCHEM E, IT DESERVES TO BE NOTICED HERE THAT THE ORDERS PASSED BY THE ASSESSING OFFICER U/S 201(1) AND 201(1A) OF THE INCOME-TAX AC T, IN ALL THE THREE YEARS, ARE UNDER CHALLENGE AND ACCORDING TO A SSESSING OFFICER, THE TAX DEDUCTIBLE AND THE INTEREST CHARGE ABLE THEREON WORKS OUT TO RS.12,20,375/- INCLUDING THE MANDATORY INTEREST, WHEREAS ON AN APPEAL FILED BY THE ASSESSEE, FULL RE LIEF WAS GRANTED AND IF THE REVENUE IS AGGRIEVED BY THE RELIEF GRANT ED BY THE CIT(A), APPEALS COULD HAVE BEEN PREFERRED ON ALL THE ISSUES WHEREBY THE DISPUTED TAX/INTEREST/PENALTY SHOULD HAVE BEEN MORE THAN RS.4 LAKHS. THE AUTHORIZATION MEMO MERELY SHOWS THE COMM ISSIONER'S APPROVAL TO FILE AN APPEAL BEFORE THE TRIBUNAL AGAI NST THE ORDER OF THE COMMISSIONER, WITHOUT SPECIFYING AS TO WHAT WER E THE ISSUES ON WHICH THE COMMISSIONER AUTHORIZED THE ASSESSING OFF ICER TO PREFER AN APPEAL. THE DEPARTMENTAL REPRESENTATIVE I.E. MR. BABU RAO, . 3 ADDL. CIT WAS NOT ABLE TO PLACE ANY MATERIAL TO SHO W AS TO WHAT WERE THE ISSUES ON WHICH THE LD. COMMISSIONER HAS A UTHORIZED THE ASSESSING OFFICER TO FILE AN APPEAL BUT GOING BY TH E GROUNDS OF APPEAL, IT HAS TO BE ASSUMED THAT THE AUTHORIZATION IS RESTRICTED TO TDS DEMAND RAISED RELATING TO PAYMENT TO SELF-HELP GROUPS (SHGS) FOR LAYING OF ROADS, ETC. THE ASSESSEE MADE PAYMENTS TO SHGS WITHOUT DEDUCTING TAX SINCE THE ASSESSEE IS OF THE IMPRESSION THAT NO TAX IS DEDUCTIBLE IN A CASE WHERE THE WORKS ARE EXECUTED WITH PARTICIPATION OF PEOPLE OF THE PANCHAYATI RAJ INSTITUTIONS I.E. SELF-HELP GROUPS. THE LD. CIT(A) ACCEPTED THE CONTE NTION OF THE ASSESSEE AND THUS THE REVENUE PREFERRED APPEALS ONL Y WITH REGARD TO THE SAID ISSUE. THE TAX EFFECT IN SO FAR AS THAT ISSUE IS CONCERNED APPEARS TO BE LESS THAN RS.50,000/- FOR ALL THE THR EE YEARS UNDER CONSIDERATION. AT ANY RATE, FOR EACH YEAR, THE TAX EFFECT BEING LESS THAN RS.3 LAKHS, THE CIRCULAR ISSUED BY THE CBDT IN 2011 IS APPLICABLE TO THE CASES ON HAND. IT IS NOT IN DISPU TE THAT THE TAX EFFECT MEANS AND INCLUDES PENALTY AND/OR INTEREST A ND IT HAS TO BE CALCULATED SEPARATELY FOR EVERY ASSESSMENT YEAR. IT WAS FURTHER CLARIFIED THAT NO APPEAL NEED TO BE FILED IN RESPEC T OF THE ASSESSMENT YEAR/YEARS IN WHICH THE TAX EFFECT IS LE SS THAN THE MANDATORY LIMIT SPECIFIED IN THE CIRCULAR' IN THE L IGHT OF THE CBDT INSTRUCTIONS (SUPRA), I AM OF THE VIEW THAT THE APP EALS FILED BY THE REVENUE ARE CONTRARY TO THE CBDT GUIDELINES AND THE REFORE LIABLE TO BE DISMISSED. 3. BY FOLLOWING THE CIRCULAR ISSUED BY THE CBDT, TH E APPEALS FILED BY THE REVENUE ARE DISMISSED ON THE GROUND TH AT THE TAX EFFECT IS BELOW THE LIMITS SPECIFIED IN THE CIRCULAR ISSUE D BY CBDT. 2.2 LD. DR ON THE OTHER HAND VEHEMENTLY CONTENDS TH AT THERE IS NO MERIT IN THE ASSESSEE'S PRELIMINARY OBJECTION INASM UCH AS THE DEMAND IN . 4 QUESTION IS OF TDS AND NOT OF ASSESSEES TAX LIABIL ITY. PARA 4 OF INSTRUCTION OF CIRCULAR NO. 3 OF 201 DATED 9 TH FEB. 2011 REFERS TO AS UNDER:- 4. FOR THIS PURPOSE, TAX EFFECT MEANS THE DIFFERENCE BETWEEN THE TAX ON THE TOTAL INCOME ASSE SSED AND THE TAX THAT WOULD HAVE BEEN CHARGEABLE HAD SUCH TO TAL INCOME BEEN REDUCED BY THE AMOUNT OF INCOME IN RESP ECT OF THE ISSUES AGAINST WHICH APPEAL IS INTENDED TO BE F ILED (HEREINAFTER REFERRED TO AS DISPUTED ISSUES). HO WEVER, THE TAX WILL NOT INCLUDE ANY INTEREST THEREON, EXCEPT W HERE CHARGEABILITY OF INTEREST ITSELF IS IN DISPUTE. IN CASE THE CHARGEABILITY OF INTEREST IS THE ISSUE UNDER DISPUT E, THE AMOUNT OF INTEREST SHALL BE THE TAX EFFECT, THE TAX EFFECT WOULD INCLUDE NOTIONAL TAX ON DISPUTED ADDITIONS. IN CASE OF PENALTY ORDERS, THE TAX EFFECT WILL MEAN QUANTUM OF PENALTY DELETED OR REDUCED IN THE ORDER TO BE APPEALED AGAINST. THUS THE TAX LIMIT APPLIES TO ASSESEES TAX LIABILIT Y AND NOT TDS. TDS IS NOT PAID BY THE ASSESSEE AS TAX ON HIS INCOME BUT I T IS AN OBLIGATION TO RECOVER FROM PAYEE, HOLD IT ON BEHALF OF GOVT. AND PAY IN THE TREASURY AS PER LEGAL PROVISIONS IN THIS BEHALF. THUS THE LIABI LITY AS AN AGENT OF CENTRAL GOVT. TO DEDUCT WITHHOLDING TAX ON THE AMOUNT PAYAB LE TO THE PAYEE CAN NOT BE EQUATED WITH ASSESEES OWN TAX LIABILITY. TH EREFORE, MONITORY LIMIT OF CIRCULAR IS NOT APPLICABLE IN THE FACTS OF THIS CASE. BESIDES IT IS A REPETITIVE QUESTION OF LAW TO WHICH ALSO THE CIRCUL AR IS NOT APPLICABLE. . 5 2.3 WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE MATERIALS AVAILABLE ON RECORD. IN OUR CONSIDERED VIEW THE ISS UE IN QUESTION IS NOT ABOUT THE OWN TAX LIABILITY OF THE ASSESSE; THE DE MAND IS QUA THE OBLIGATION TO DEDUCT TDS WHICH SHOULD HAVE BEEN EFF ECTGED BY THE ASSESSEE FROM PAYEE AS WITHHOLDING THE TAX FOR AND ON BEHALF OF GOVT. AS AN AGENT. THEREFORE, IT IS NOT THE TAX LIABILITY OF THE ASSESSEE AND FOR PURPOSE OF RECOVERY, BY A STATUTORY OBLIGATION ASSE SSEE IS HELD TO BE DEEMED IN DEFAULT FOR NOT DEDUCTING THE TAX. THEREF ORE, IN OUR CONSIDERED VIEW, THE TDS LIABILITY BEING IN THE NATURE OF OBLI GATION TO DEDUCT FROM SOMEBODY ELSE I.E. PAYEE CANNOT BE EQUATED WITH THE ASSESSEES TAX LIABILITY SO AS TO APPLY THE MONITORY THE TAX LIMIT PRESCRIBED BY THE CIRCULAR OF THE BOARD. IN VIEW THEREOF, WE ARE UNAB LE TO ACCEDE TO THE REQUEST OF THE ASSESSEE THAT THESE APPEALS ARE NOT MAINTAINABLE. HENCE, THEY ARE HEARD ON MERITS AND DECIDE THEM ACCORDINGL Y. 3.1 BRIEF FACTS OF THE CASE ARE THAT THE A IS A PRO PRIETOR OF M/S. HERITAGE WHICH IS ENGAGED IN EXPORT OF WOODEN FURNITURE AN D URING THE FINANCIAL YEAR 2006-07 TO 209-10, THE AMOUNT HAS BEEN PAID AS COMMISSION AND PURCHASES OF DESIGN OF FURNITURE AS A TRANSACTION O F SALE AND PURCHASE; IT IS CLAIMED THAT NO TDS WAS DEDUCTIBLE AT SOURCE U/S 1 95. IN RESPONSE TO THE . 6 SHOW CAUSE NOTICE ISSUED ON 10-03-2010, DETAILED SU BMISSIONS WERE MADE BEFORE THE ASSISTANT DIRECTOR AND IT WAS POINTED OU T THAT NO TAX WAS DEDUCTIBLE AT SOURCE IN VIEW OF CIRCULAR NO. 786 DA TED 7-02-200 OF CBDT. IT WAS ALSO POINTED OUT THAT DESIGN PURCHASES MADE BY THE ASSESSEE DID NOT FALL UNDER THE CATEGORY OF RENDERI NG OF CONSULTANCY, TECHNICAL SERVICES OR ROYALTY; VARIOUS CASE LAWS WE RE ALSO RELIED ON TO SUPPORT THE CONTENTIONS. HOWEVER, THE ASSISTANT DIR ECTOR HELD THAT THE CONTENTIONS OF THE ASSESSEE ARE NOT ACCEPTABLE. IT HAS ALSO BEEN HELD BY HIM THAT CIRCULAR NO. 786 DATED 7-02-2000 HAS BEEN WITHDRAWN BY ISSUING A FRESH CIRCULAR NO. 7 DATED 22-10-2009. TH E ADIT HAS HELD THAT THE TERM FEES FOR TECHNICAL SERVICES IN CLAUSE 9(1) (VII) HAS BEEN GIVEN A WIDE DEFINITION COVERING SERVICES RENDERED FOR ANY MANAGERIAL, TECHNICAL OR CONSULTANCY SERVICES INCLUDING PROVISIONS OF SER VICES OF TECHNICAL OR OTHER PERSONNEL. IT WAS HELD THAT THE SERVICES REND ERED FOR PROMOTING SALES OR ORDERS PROCURED WERE ALSO COVERED IN THE EXPRESS ION OF TECHNICAL SERVICES. THUS ANY REMITTANCES WITHOUT WITHHOLDING THE TAX U/S 195 WOULD RISE IN THE TAX LIABILITY OF THE REMITTER U/S 201 & 201A. CONSEQUENTLY, THE AO HELD THE ASSESSEE TO BE LIABLE FOR DEDUCTION OF TDS IN ALL THESE YEARS . 7 AND RESPECTIVE DEMANDS WAS CREATED U/S 201 & 201A A ND INTEREST THEREON U/S 201(1A). 3.2 AGGRIEVED, THE ASSESSEE PREFERRED FIRST APPEAL WHERE IT WAS CONTENDED THAT EVEN AFTER INSERTION OF EXPLANATION 2 TO SECTION 9(A))(1)(VII) OF THE FINANCE ACT, 2010, ONLY THOSE AMOUNTS WERE LIABLE FOR TDS WHICH WERE IN THE NATURE OF PAYMENTS MADE FOR FEE FOR TECHNICAL SERVICES (FTS) WHICH REQUIRE RENDERING SPECIALIZE D KNOWLEDGE OR SKILL. SIMILARLY, THE MEANING OF CONSULTANCY SIGNIFIES THE CONSULTATION GIVEN BY THE EXPERT. THE REAL NATURE OF THE IMPUGNED TRANSAC TION IS SALE AND PURCHASE OF DESIGNS SIMPLICITER AND NOT AMOUNTED TO RENDERING OF CONSULTANCY / PROFESSIONAL SERVICES; THE SAME WERE NOT LIABLE TO BE HELD AS TRANSACTIONS FOR TECHNICAL SERVICES AS DEFINED IN S ECTION 9(A)(VII)(B). THERE IS A WELL KNOWN DISTINCTION BETWEEN AN OUT AN D OUT SALE OF PROPERTY AND ALLOWING USE OF THE PROPERTY IN THE FORMER CASE THE PROPERTY IS TRANSFERRED UNCONDITIONALLY AND BECOME PROPERTY OF THE PURCHASER. IN THE LATER CASE, THE PURCHASER GETS ONLY THE RIGHT TO US E THE PROPERTY. THUS WHEN THE PURCHASER GETS THE RIGHT TO USE THE PROPER TY, THE PAYMENT CAN BE TREATED AS LICENSING FEE OR ROYALTY BUT WHEN THERE IS AN OUTRIGHT PURCHASE . 8 OF PROPERTY, IT CANNOT BE TREATED AS ROYALTY. THE L D. AR OF THE ASSESSEE HAS RELIED ON THE FOLLOWING CASES LAWS: 1. ISHIKAWAJMA HARIMA HEAVYINDUSTRIES LTD., 288 ITR 408 (SC) 2. CIT VS. KLAYMAN PROCELAINS LTD., 229 ITR 735 (A.P.) 3. CIT VS. MAGGRONIC DEVICES (P) LTD. , 329 ITR 442 (H.P) 4. CIT VS. DAVY ASHMORE INDIA LTD. , 190 ITR 626 (CAL. ) 5. PARSON BRINCKERHOFF INDIA (P) LTD. VS. ADIT (INV .), 118 TTJ 214 (DEL.) 6. ACIT VS. KING TAUDEVIN & GREGSO LTD. , 80 ITD 28 1 (BANG.) 7. PROQUIP CORP. VS. CIT, 255 ITR 354 8. CIT VS. MITSUI ENGINEERING 259 ITR 248 (DEL.) 9. PINTASH BAMAG, 318 ITR 190 10. VELANKANI MAURITIUS VS. DDIT , 132 TTJ 124 (DEL.) 3.3 THE LD. CIT(A) HELD THAT REAL NATURE OF THE TRA NSACTION WAS IN THE NATURE OF PURCHASES EFFECTED FROM FOUR PARTIES FROM PHILIPPINE, FRANCE, GERMANY AND NETHERLANDS. THEY BEING THE TRANSACTION S OF PURCHASES OF DESIGNS BY ASSESSE WERE NOT LIABLE FOR TDS. THE COP IES OF THE INVOICES IN RESPECT OF PURCHASE AND DESIGNS WERE MODIFIED AND FOUND TO BE LIKED . 9 DESIGNS OF PALTRY AMOUNTS LIKE DINING TABLES, CHAIR S, COFFEE TABLES, CABINETS, SIDE BOARDS FOR PALTRY AMOUNT AS LOW AS 2 00US$ OR 500 EROS. IN CONCLUSION, THE LD. CIT(A) HELD THE ASSESSEE TO BE NOT LIABLE FOR TDS BY FOLLOWING OBSERVATIONS. 3.4 THE JUDGEMENT OF THE HON'BLE KARNATAKA HIGH COURT IN THE CASE OF CIT VS. SAMSUNG ELECTRONICS CO. LTD. (320ITR 209), RELIED ON BY THE AO DEAL WITH WHETHER TAX IS TO BE DEDUCTED AT SOURCE U/S 195 OF THE ACT IN RESPECT OF PAYMENT MA DE TO NON- RESIDENT ON IMPORT OF SOFTWARE. THE JUDGEMENT OF T HE KARNATAKA HIGH COURT IS LARGELY BASED ON THE JUDGEMENT OF THE SUPREME COURT IN THE CASE OF TRANSMISSION CORPORATION A.P. LTD. VS. CIT 239 ITR 587. HOWEVER, KARNATAKA HIGH COURT HAS NOT FOLLOWED THE SUBSEQUENT BINDING JUDGEMENT OF THE SUPREME COURT I N THE CASE OF VIJAY SHIP BREAKING CORPORATION VS. CIT, 314 ITR 30 9 WHEREIN THE APEX COURT IN THE CASE OF COURT HAS CATEGORICALLY H ELD THAT THE RESIDENT IS NOT REQUIRED TO DEDUCT TDS U/S 195(1) O F THE ACT, IF THE INCOME OF THE NON-RESIDENT RECIPIENT IS NOT TAXABLE IN INDIA. GIVEN THIS BINDING PRECEDENT, THE JUDGEMENT OF THE KARNAT AKA HIGH COURT IN THE CASE OF SAMSUNG ELECTRONICS CO. LTD., 320 IT R 209 WOULD NOT APPLY TO CASES WHERE THE NON-RESIDENT RECIPIENT IS NOT TAXABLE IN INDIA. IN THE JUDGEMENT OF THE APEX COURT IN THE CASE OF ISHIKAWAJIMA HARIMA HEAVY INDUSTRIES LTD. VS. DIT , 288 ITR 408, IT WAS HELD FOR SECTION 195 TO BE ATTRACTED, T HE SERVICES RENDERED BY THE NON-RESIDENT SHOULD HAVE BEEN RENDE RED IN INDIA AND ALSO SHOULD HAVE BEEN USED IN INDIA AND THAT TH E TWIN TESTS HAVE TO BE SATISFIED FOR SECTION 195 TO BE ATTRACTE D. THEREFORE, THE LEGISLATURE INTRODUCED THE EXPLANATION TO SECTION 9 (2) OF THE ACT AFTER THIS JUDGEMENT, WITH RETROSPECTIVE EFFECT FRO M JUNE 1, 1976 IN THE FINANCE ACT , 2007. DESPITE THIS INTRODUCTION O F EXPLANATION TO SECTION 9(2) OF THE ACT, THE KARNATAKA HIGH COURT I N THE CASE OF JINDAL THERMAL POWER CO. LTD. VS. DCIT, 321 ITR 31 HELD THAT THE LAW LAID DOWN BY THE APEX COURT IN THE CASE OF ISHI KAWAJIMA HARIMA HEAVY INDUSTRIES LTD. , 288 ITR 408 STILL HO LDS GOOD . 10 DESPITE THE RETROSPECTIVE AMENDMENT TO SECTION 9 OF THE ACT. THEREFORE, THE REQUIREMENT OF SERVICES TO THE NON-R ESIDENT BEING RENDERED IN INDIA AND BEING UTILIZED IN INDIA IS ST ILL VALID, DESPITE THE JUDGEMENT OF KARNATAKA HIGH COURT IN THE CASE O F SAMSUNG ELECTRONIC CO. LTD. , 320 ITR 209 AND WITHDRAWAL OF EARLIER CIRCULARS ISSUED ON THIS ON THIS SUBJECT BY THE CEN TRAL BOARD OF DIRECT TAXES. IT IS WELL SETTLED LAW THAT THE PROVI SIONS OF DOUBLE TAXATION AVOIDANCE AGREEMENT WOULD PREVAIL OVER THE PROVISIONS OF THE INCOME-TAX ACT. THEREFORE, THIS PREPOSITION WAS NOT COMPLETELY FOLLOWED BY THE KARNATAKA HIGH COURT WHI LE RENDERING ITS DECISION IN THE CASE OF SAMSUNG ELECTRONICS CO. LTD. (320 ITR 209). THEREFORE, IN MY CONSIDERED OPINION, THE LAW RELATING TO DEDUCTION OF TAX AT SOURCE U/S 195 HAS NOT BEEN CHA NGED CONSEQUENT TO JUDGEMENT OF SAMSUNG ELECTRONICS OR W ITHDRAWAL OF EARLIER CIRCULARS ON THIS ISSUE BY THE CENTRAL BOAR D OF DIRECT TAXES. THEREFORE, NO DEMAND U/S 201(1) AND INTEREST U/S 201(1A) CAN BE CHARGED IN THE PRESENT CIRCUMSTANCES. I THER EFORE, DIRECT THE AO TO CANCEL THE ORDER CHARGING TAX OF RS. 8,37,106 /- U/S 201(1) AND INTEREST OF RS. 2,43,557/- U/S 201(1A) OF THE A CT. THESE GROUNDS OF APPEAL ARE ALLOWED. 3.4 AGGRIEVED REVENUE IS BEFORE US. LD. DR RELIED O N THE ORDER OF AO. 3.5 THE LD. COUNSEL FOR THE ASSESSEE REITERATED THE ARGUMENTS AND CONTENDS THAT HON'BLE KARNATAKA HIGH COURT IN THE CASE OF CIT VS. SAMSUNG ELECTRONICS CO. LTD. 320 ITR 209 EMPHATICAL LY RELIED ON BY LD. AO HAS BEEN REVERSED BY THE HON'BLE APEX COURT IN T HE CASE OF G.E. INDIA TECHNOLOGY CENTRE (P) LTD. VS. CIT, (2010) 32 7 ITR 456 (SC). THEREFORE, THE JUDGMENT OF CIT VS. SAMSUNG ELECTRON ICS CO. LTD. (SUPRA) IS NO MORE A GOOD LAW AND NOT APPLICABLE TO THE ASS ESSEE'S CASE. . 11 3.6 THE DEPARTMENT HAS NOT RAISED ANY GROUND ABOUT THE PART OF TDS ON COMMISSION PAID TO NON-RESIDENT. BESIDES, THE GR OUND AS RAISED BY REVENUE ITSELF READS PAYMENT MADE BY THE ASSESSEE TO NON-RESIDENT FOR PURCHASE OF NEW DESIGN OF FURNITURE. THEREFORE, EV IDENTLY DEPARTMENT HAS ACCEPTED THE NATURE OF THE TRANSACTION TO THE P URCHASES IN THE GROUND ITSELF AND ONLY BECAUSE OF THE MISINTERPRETATION OF BOARDS CIRCULAR MENTIONED ABOVE, THE APPEAL HAS BEEN FILED. IT IS P LEADED THAT BOARD CIRCULAR OR CLARIFICATIONS DO NOT SUGGEST DEPARTMEN TAL GROUND AND LEGALLY THEY ARE NOT BINDING ON THE ITAT. BESIDES LD. CIT(A ) IN ORDER TO ARRIVE AT A CONCLUSION IN FAVOR OF THE ASSESSE HAS RELIED ON PLETHORA OF CASES; WHOSE ORDER IS RELIED ON. 3.7 WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE MATERIALS AVAILABLE ON RECORD. THE DEPARTMENT HAS RAISED ONLY THE GROUND ABOUT THE PAYMENT MADE BY THE ASSESSEE RELATING TO PURCHASES OF NEW DESIGNS OF FURNITURE WHICH IS EQUATED BY AO AS RENDERING OF FT S. IN OUR CONSIDERED VIEW THE ISSUE OF PURCHASES AND SALES OF IMPUGNED F URNITURE DESIGNS IS NEITHER COVERED U/S 9(A))(1)(VII)(B) OR SECTION 195 OF THE ACT. LD. CIT(A) HAS TAKEN A CONSIDERED VIEW AFTER APPRECIATING THE NATURE OF TRANSACTIONS I.E OF PURCHASE AND SALE; FACTS AND CIRCUMSTANCES O F THE CASE AND RELEVANT . 12 JUDICIAL PRECEDENTS IN THIS BEHALF. HIS VIEW IS FOR TIFIED BY OTHER JUDGMENT CITED BY THE LD. COUNSEL FOR THE ASSESSEE MENTIONE D ABOVE. THUS IN THE ENTIRETY OF THE FACTS AND CIRCUMSTANCES OF THE CASE , WE SEE NO INFIRMITY IN THE ORDERS OF THE LD. CIT(A) WHICH IS CONFIRMED. TH US THE APPEALS OF THE REVENUE ARE DISMISSED. 4.0 IN THE RESULT, THE APPEALS OF THE REVENUE ARE D ISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 13/02/2015. SD/- SD/- VH-VKJ-EHUK VKJ-IH-RKSYKUH (T.R. MEENA) (R.P.TOLANI) YS[KK LNL;@ ACCOUNTANT MEMBER U;KF;D LNL;@ JUDICIAL MEMBER TK;IQJ@ JAIPUR FNUKAD@ DATED:- 13 TH FEB, 2015 *MISHRA VKNS'K DH IZFRFYFI VXZSFKR@ COPY OF THE ORDER FORWARDED TO: 1. VIHYKFKHZ@ THE APPELLANT- THE ADIT (INTERNATIONAL .) , JAIPUR 2. IZR;FKHZ@ THE RESPONDENT- SHRI ASHISH RANIWALA, JAIPUR . 3. VK;DJ VK;QDRVIHY@ THE CIT(A). 4. VK;DJ VK;QDR@ CIT, JAIPUR 5. FOHKKXH; IZFRFUF/K] VK;DJ VIHYH; VF/KDJ.K] T;IQJ@ DR, ITAT, JAIPUR 6. XKMZ QKBZY@ GUARD FILE (ITA NO.1002/JP/2011) VKNS'KKUQLKJ@ BY ORDER, LGK;D IATHDKJ@ ASSISTANT. REGISTRAR . 13