I.T.O Wd - 12(3),kolkata., Kolkata V. M/s Jai Vikshu Niketan Pvt Ltd, Kolkata

ITA 1133/KOL/2013

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 4458 (ITAT-KOLKATA)
• Duration Of Justice: 3 year(s) 4 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-09-2016
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 10-08-2016
• Assessment Year: 2009-2010
• Appeal Filed On: 08-05-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: DEBASISH LAHIRI
• Keywords: Double taxation relief; Permanent establishment
• Section: 143(3); 142(1)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL KOLKATA BENCH A KOLKATA BEFORE SHRI WASEEM AHMED, ACCOUNTANT MEMBER AND SHRI S.S.VISWANETHRA RAVI, JUDICIAL MEMBER ITA NO.1133/KOL/2013 ASSESSMENT YEARS:2009-10 ITO WARD-12(3), P-7, CHOWRINGHEE SQUARE, 7 TH FLOOR, KOLKTA-700 069 / V/S . M/S JAI VIKSHU NIKETAN PVT. LTD., 132/1, MAHATMA GANDHI ROAD, 4 TH FLOOR, KAVERI HOUSE, BURRABAZAR, KOLKATA-700 007 [ PAN NO.AABCJ 3771 F ] /APPELLANT .. /RESPONDENT /BY APPELLANT SHRI DEBASISH LAHIRI ADDL. CIT-DR /BY RESPONDENT SHRI SUBASH AGARWAL, ADVOCATE /DATE OF HEARING 10-08-2016 /DATE OF PRONOUNCEMENT 23-09-2016 /O R D E R PER WASEEM AHMED, ACCOUNTANT MEMBER:- THIS APPEAL BY THE REVENUE IS AGAINST THE ORDER OF COMMISSIONER OF INCOME TAX (APPEALS)-XII, KOLKATA DATED 21.01.2013. ASSESS MENT WAS FRAMED BY ITO WARD- 12(3), KOLKATA U/S 143(3) OF THE INCOME TAX ACT, 19 61 (HEREINAFTER REFERRED TO AS THE ACT) VIDE HIS ORDER DATED 27.12.2011 FOR ASSESSMEN T YEAR 2009-10. THE GROUNDS RAISED BY THE REVENUE PER ITS APPEAL ARE AS UNDER:- 1. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF T HE CASE, THE LD. CIT(A) HAS ERRED IN DIRECTING THE A.O TO DELETE DISALLOWANCE O F EXPENSES UNDER THE HEAD COMMISSION OF RS.4,29,46,229/- WHILE THE ASSESSEE FAILED TO SUBSTANTIATE THAT THESE ARE GENUINE EXPENSES. ITA NO.1133/KOL/2013 A.Y.2009-1 0 ITO WD-12(3) KOL. VS. M/S JAI VIKSHU NI KETAN PVT. LTD. PAGE 2 2. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF TH E CASE, THE LD. CIT(A) HAS ERRED IN OBSERVING THAT TDS WAS NOT REQUIRED TO BE DEDUCTED ON PAYMENTS OF RS.4,29,46,229/-, WHICH HAVE BEEN CLAIMED BY THE AS SESSEE AS EXPENSES TOWARDS COMMISSION PAID TO FOREIGN PARTIES. SHRI DEBASISH LAHIRI, LD. ADDL. CIT DR REPRESENTED ON BEHALF OF REVENUE AND SHRI SUBASH AGARWAL, LD. ADVOCATE APPEARED ON BEHALF OF ASSESSEE. 2. BRIEF FACTS OF THE CASE AS PER THE RECORD ARE TH AT THE ASSESSEE IN THE PRESENT CASE IS A PRIVATE LIMITED COMPANY AND ENGAGED IN THE BUS INESS OF EXPORTING OF FABRICS, SAREES, BABY WEAR ETC. THE ASSESSEE HAS FILED ITS R ETURN OF INCOME FOR THE AY 2009-10 SHOWING TOTAL INCOME OF RS. 19,34,220/- UNDER HEAD BUSINESS & PROFESSION ON DATED 30.09.2009. THEREAFTER THE CASE WAS SELECTED FOR SC RUTINY UNDER CASS MODULE AND ACCORDINGLY THE NOTICES U/S 143(2) AND 142(1) OF TH E ACT WERE DULY SERVED TO THE ASSESSEE. THE ASSESSING OFFICER FRAMED THE ASSESSME NT AT RS. 4,48,80,450/- U/S 143(3) OF THE ACT. 3. THE SOLITARY ISSUE RAISED IN THIS APPEAL BY REVE NUE IN GROUND NO. 1 & 2 IS THAT LD. CIT(A) ERRED IN DELETING THE ADDITION OF COMMIS SION EXPENSE OF RS. 4,29,46,229/- MADE BY THE AO ON ACCOUNT OF IN-GENUINE EXPENSES AN D NON-DEDUCTION OF TDS ON THE COMMISSION EXPENSES. THE ASSESSEE CLAIMED COMMISSION EXPENSES OF RS. 4,2 9,46,229.00 IN THE PROFIT & LOSS ACCOUNT AS AGENCY COMMISSION ON SALE WHICH WAS PA ID TO THE FOLLOWING PARTIES : S. NO. NAME OF THE PARTY ADDRESS COMMISSION CLAIMED 1 AAYPEE INTERNATIONAL LTD. 15/F,RM E, NATHAN ROAD, KOWLOON, HONG KONG 32,48,223 2 SHAKEEL AHMED TRADING CO LLC P.O.BOX 28706, DUBAI, UAE 3,96,98,006 TOTAL 4,29,46,229 ITA NO.1133/KOL/2013 A.Y.2009-1 0 ITO WD-12(3) KOL. VS. M/S JAI VIKSHU NI KETAN PVT. LTD. PAGE 3 ON QUESTION BY THE AO FOR GENUINENESS AND NON-DEDUC TION OF TDS ON THE COMMISSION EXPENSES THE ASSESSEE SUBMITTED THAT IT WAS NECESSA RY TO APPOINT THE FOREIGN AGENTS FOR GETTING THE EXPORT ORDERS IN THE COMPETITIVE MARKET S. REGARDING THE GENUINENESS OF THE COMMISSION EXPENSE S THE ASSESSEE SUBMITTED THE COPIES OF THE COMMISSION BILLS, TRANSACTION WISE DE TAILS OF THE COMMISSION ALONG WITH THE RATE OF COMMISSION AND PAYMENT DETAILS OF THE C OMMISSION. REGARDING THE NON-DEDUCTION OF TDS THE ASSESSEE SUB MITTED THAT THE TDS HAS NOT BEEN DEDUCTED FROM THE COMMISSION EXPENSES ON THE B ASIS OF THE FOLLOWING REASONS:- 1. THE COMMISSION AGENTS ARE NON RESIDENT PERSON. 2. THE COMMISSION AGENTS ARE PROVIDING SERVICES OUTSID E INDIA. 3. THE COMMISSION PAID OR PAYABLE TO THE COMMISSION AG ENTS ARE RELATED TO THE SERVICES PROVIDED OUT OF INDIA. 4. THE COMMISSION AGENTS ARE NOT HAVING ANY PERMANENT ESTABLISHMENT IN INDIA. 5. THE COMMISSION WAS PAID DIRECTLY TO THE AGENT OUTSI DE INDIA. AS THE COMMISSION WAS NOT TAXABLE IN INDIA THEREFOR E THE QUESTION OF DEDUCTION OF TDS DOES NOT ARISE. HOWEVER, THE AO DISALLOWED THE COMMISSION EXPENSES BY OBSERVING THAT I) THE ASSESSEE FAILED TO SUBSTANTIATE WHETHER THE ABO VE COMPANIES ARE ACTUALLY IN EXISTENCE. II) THE FOREIGN COMPANIES DO NOT HAVE ANY PERMANENT EST ABLISHMENT IN INDIA AS WELL AS BUSINESS CONNECTION IN INDIA. PROV ISION FOR NON DEDUCTION OF TDS WILL BE APPLICABLE ONLY AFTER FULF ILLING THE CRITERIA AS DISCUSSED ABOVE. III) THE RATE OF COMMISSION PAID TO THE AGENTS WAS WORKE D OUT @ 8% TO 10% OF THE EXPORT ORDER WHICH IS QUITE HIGHER THAN THE MARKET RATE. IV) OUT OF THE TOTAL COMMISSION DUE I.E. RS 4,29,46,229 .00 A SUM OF RS. 3,96,98,006.00 IS UNPAID TILL DATE FOR THE FY 2008- 09 WHICH IS NOT A COMMON SCENARIO. THERE WAS NOT ANY DOCUMENTARY EVID ENCE THAT THE AGENTS ARE PUTTING EFFORT TO GET RELEASE THEIR PAYM ENTS. ITA NO.1133/KOL/2013 A.Y.2009-1 0 ITO WD-12(3) KOL. VS. M/S JAI VIKSHU NI KETAN PVT. LTD. PAGE 4 V) THE ASSESSEE HAS SHOWN THE COMMISSION PAYABLE UNDER THE HEAD SUNDRY CREDITORS FOR GOODS ALTHOUGH THERE IS NO I MPORT CLAIMED BY THE ASSESSEE DURING THE YEAR. IN VIEW OF ABOVE THE AO TREATED THE COMMISSION EXPE NSE CLAIMED BY THE ASSESSEE AMOUNTING TO RS.4,29,46,229/- AS NOT GENUINE EXPENS E AND ADDED BACK TO THE TOTAL INCOME OF THE ASSESSEE. 4. AGGRIEVED, ASSESSEE PREFERRED AN APPEAL BEFORE L D.CIT(A) FOR THE STERN ACTION OF THE AO. THE ASSESSEE BEFORE THE CIT(A) SUBMITTED THE AGENCY AGREEMENT, CERTIFICATE THAT THE PARTY DOES NOT HAVE ANY PERMAN ENT ESTABLISHMENT IN INDIA AS WELL AS DETAILS OF COMMISSION PAYMENTS MADE TO THE PARTIES AFTER 31.03.2009 PERTAINING TO THE RELEVANT ASSESSMENT YEAR 2009-10. IN REMAND REP ORT, THE AO ADMITS THAT THE AGENCY AGREEMENTS TALLIES WITH CLAIM OF THE ASSESSE E. IT WAS ALSO ADMITTED BY THE AO THAT THERE IS DIFFERENCE IN THE AMOUNTS PAID BY THE ASSESSEE AS WELL AS APPEARING IN THE BANK STATEMENT WHICH WAS EXPLAINED DUE TO THE FOREI GN EXCHANGE FLUCTUATION. IT WAS ALSO ADMITTED IN THE REMAND REPORT THAT THE ASSESSE E HAS PAID RS 2,69,84,278/- OUT OF THE TOTAL OUTSTANDING AMOUNT OF RS. 3,96,98,006/- T O SHAKEEL AHMED TRADING CO. LLC. AS THE ASSESSEE FOLLOWED THE MERCANTILE ACCOUN TING SYSTEM SO BOOKING OF ENTIRE LIABILITY IN THAT PARTICULAR YEAR WAS THE CORRECT T REATMENT. AAYPEE INTERNATIONAL IS NOT REGISTERED WITH MCA AS WELL AS THE AO WAS NOT ABLE TO FIND ANY DELHI POSTAL ADDRESS FROM THE WEBSITE OF THE SAME PARTY. LD.CIT(A) CONSIDERED THE SUBMISSION OF THE LD. AR O F ASSESSEE AS WELL AS OF THE REMAND REPORT AND DELETED THE ADDITION MADE BY THE AO BY OBSERVING AS UNDER:- 4. I HAVE CONSIDERED THE FINDING OF THE AO IN HIS ORDER DT. 27.12.2011 AND THE WRITTEN SUBMISSION MADE BY THE AR DURING THE APPELL ATE PROCEEDING. APPEAL ON GROUND NO. 1 IS GENERAL IN NATURE. APPEAL ON GROUNDS NO. 2 AND 4 ARE AGAINST THE ADDIT ION OF COMMISSION EXPENSES OF RS.4,29,46,229/-. THE FACT OF THE CASE IS THAT THE ASSESSEE IS ENGAGED IN THE BUSINESS OF SYNTHETIC FABRICS, SARERE, ARNA, BABY WEAR ETC. THE AO FOUND FROM THE AUDITED ACCOUNTS THAT THE ASSESSEE HAS MAD E PAYMENT OF RS.4,29,46,229/- AS COMMISSION TO DIFFERENT PARTIES . THE AO IN HIS ASSESSMENT ORDER HAS GIVEN THE FINDING THAT IT IS UNBELIEVABLE THAT FOR SALES MADE DURING FY 2008-09 COMMISSION TO FOREIGN AGENTS HAVE NOT BEEN PAID TILL DATE. THE FURTHER ITA NO.1133/KOL/2013 A.Y.2009-1 0 ITO WD-12(3) KOL. VS. M/S JAI VIKSHU NI KETAN PVT. LTD. PAGE 5 OBSERVED THAT IT IS NOT KNOWN WHETHER SOLD SAID PAR TY IS PURSUING FOR PAYMENTS OR NOT. THE ASSESSEE COULD NOT FURNISH DOCUMENTARY EVIDENCES IN SUPPORT OF THAT. THEREFORE, THE AO ADDED THE AMOUNT OF COMMISS ION OF RS.42946229/-. DURING THE APPELLATE PROCEEDING THE AR SUBMITTED MA NY DOCUMENTS SHOWING THE PAYMENT OF COMMISSION ETC. SINCE AO HAS WRITTEN IN HIS ASSESSMENT ORDER THAT ALL PARTICULARS DETAILS AND DOCUMENT WERE NOT FURNISHED DURING THE ASSESSMENT PROCEEDING. THEREFORE, DOCUMENTS AND DET AILS FILED BY THE AR WERE SENT TO THE AO FOR THE REMAND REPORT. THE AO HAS SU BMITTED HIS REMAND REPORT VIDE LETTER NO. ITO WD-12(3)/KOL/AABCJ3771F/12-13/1 141 DT. 19-12-2012. IN HIS REMAND REPORT THE AO HAS MENTIONED THAT THE ASS ESSEE HAS CLAIMED TO HAVE PAID RS.3248223/- TO AAYPEE INTERNATIONAL LTD. AND RS.3,96,98,006/- TO M/S SHAKEEL AHMED TRADING CO. LC. THE AO IN THE REMAND REPORT HAS SUBMITTED THAT AS THE PARTIES ARE NOT MAINTAINING HEAD OFFICE IN INDIA, VERIFICATION HAS BEEN RESTRICTED TO THE STUDY OF THE DOCUMENTARY EVI DENCES PRODUCED AND FROM INTERNET SURFING. THE ASSESSEE COULD NOT PRODU CE ORIGINAL COPIES OF A NUMBER OF DOCUMENTS FURNISHED E.G. COMMISSION BIL LS, AGREEMENT COPIES ETC. THE ASSESSEE VIDE LETTER DT. 118-12-201 2, HAS STATED THAT THESE WERE RECEIVED OVER FAX OR E-MAILS EITHER IN MS WORD FORMAT OR JPEG FORMAT AND IT IS NOT POSSIBLE FOR THE ASSESSEE TO F URNISH ORIGINAL PRINT OUT OF THESE DOCUMENTS. THE EXISTENCE OF THE ABOVE TWO PARTIES HAS BEEN FOUND FROM THE INTERNET SURFING AND PRINT OUT OF 23 PAGES OF DOCUMENTS DOWNLOADED FROM THE INTERNET HAVE BEEN SERVED ON TH E A/R OF THE ASSESSEE DURING THE COURSE OF HEARING FOR FURNISHIN G OF WRITTEN EXPLANATION IN THIS REGARD. THE AO HAS ALSO MENTIONED IN HIS REMAND REPORT THAT OUT OF TOTAL AMOUNT OF RS.39698006/- AGAINST SHAKEEL AHMED TRADING CO. AN AMOUNT OF RS.26984278/- HAVE ALREADY BEEN PAID AS PER THE LED GER MAINTAINED BY THE ASSESSEE. REGARDING AAYPEE INTERNATIONAL LTD., THE TOTAL AMOUNT OF COMMISSION OF RS.3248223/- HAS BEEN PAID AS PER THE ASSESSEES LEDGER. I HAVE CONSIDERED THE FINDING OF THE AO IN THE ASSESSMENT ORDER WHERE HE HAD REJECTED THE CLAIM OF THE ASSESSEE OF COMMISSION PAYMENT AS THE ASSESS EE COULD NOT PRODUCE DETAILS. I HAVE ALSO CONSIDERED THE FINDING GIVEN B Y THE AO IN THE REMAND REPORT AS WELL AS THE WRITTEN SUBMISSION FILED BY T HE AR. I FIND THAT FROM THE REMAND REPORT IT IS CLEAR THAT THE ASSESSEE FILED A LL THE RELEVANT DOCUMENTS TO THE SATISFACTION OF THE AO AND THE AO HAS VERIFIED THEM AND HE HAS GIVEN HIS FINDING THAT THE TOTAL COMMISSION PAYMENT TO M/S AA PYEE INTERNATIONAL LTD. WAS MADE. THE ASSESSEE HAS ALSO PAID MAJOR PORTION OF T HE COMMISSION TO M/S SHAKEEL AHMED TRADING CO., THUS, IT IS CLEAR FROM T HE REMAND REPORT THAT THE ASSESSEE HAS MADE PAYMENT OF COMMISSION AND HAS PRO DUCED ALL RELEVANT DOCUMENTS TO THE AO FOR VERIFICATION. KEEPING IN VI EW THE FINDING OF THE AO IN THE REMAND REPORT, ASSESSEES APPEAL ON GROUNDS NO. 2 AND 4 ARE ALLOWED. 5. APPEAL ON GROUND NO. 3 IS AGAINST THE ASSESSING OFFICER' FINDING THAT THE ASSESSEE DID NOT DEDUCT TDS ON COMMISSION PAYMENTS. THE AO IN HIS ITA NO.1133/KOL/2013 A.Y.2009-1 0 ITO WD-12(3) KOL. VS. M/S JAI VIKSHU NI KETAN PVT. LTD. PAGE 6 ASSESSMENT ORDER HAS MENTIONED THAT THE ASSESSEE FA ILED TO DEDUCT TAX AT SOURCE ON THE COMMISSION PAYMENT TO PARTIES ALREADY MENTIO NED ABOVE. THE AR IN HIS WRITTEN SUBMISSION HAS MENTIONED THAT BOTH THE PART IES TO WHOM THE COMMISSION HAS BEEN PAID, ARE FOREIGN COMPANIES AND THEY DONT HAVE ANY OFFICE ESTABLISHMENT ANYWHERE IN INDIA. IN THE REMA ND REPORT ALSO THE AO HAS POINTED OUT THAT AAYPPE INTERNATIONAL LTD. IS A HON G KONG BASED TRADING COMPANY AN M/S SHAKEEL AHMED TRADING COMPANY IS BAS ED IN DUBAI UAE. IN THE REMAND REPORT THE AO HAS DOWNLOADED THE DETAILS OF AAYPEE INTERNATIONAL LTD. FROM THE INTERNET WHICH SHOWS THAT AN OFFICE O F THIS COMPANY HAS BEEN OPENED IN DELHI AND IT IS A MEMBER OF THE WEB HOSTI NG ORGANIZATION SINCE 2009. THE AR HAS SUBMITTED THAT THIS COMPANY MIGHT HAVE OPENED IT OFFICE IN DELHI IN OR AFTER 2009, BUT DEFINITELY AS IT IS CLE AR FROM THE INTERNET SITE IT DID NOT HAVE ANY OFFICE IN INDIA DURING FY 2008-09. THE AR HAS FURTHER SUBMITTED THAT AS BOTH THE COMPANIES ARE FOREIGN COMPANIES HA VING NO OFFICE IN INDIA, THEREFORE, THERE IS NO QUESTION OF DEDUCTING TAX FR OM THEM. THE AR HAS SUBMITTED THE CASE OF TRANSMISSION CORPORATION OF INDIA 239 ITR 587 WHEREIN THE HON'BLE SUPREME COURT HAS HELD IF PAYMENT TO NON-RESIDENT IS NOT CHARGEABLE TO TAX UNDER THE INDIAN INCOME TAX A CT, THEN NO TD HAS TO BE DEDUCTED. . I HAVE CONSIDERED THE FINDING OF THE AO IN THE ASSE SSMENT ORDER AND THE REMAND REPORT AND THE SUBMISSION FILED BY THE AR. IT IS CL EAR THAT COMMISSION WAS PAID TO FOREIGN COMPANIES WHICH HAD NO AGENT OR OFFICE I N INDIA AS IT IS CLEAR FROM THE REMAND REPORT OF THE AO. THEREFORE, AO'S FINDIN G IN THE ASSESSMENT ORDER THAT THE ASSESSEE FAILED TO DEDUCT TAX AT SOURCE ON COMMISSION PAYMENT IS NOT JUSTIFIED. HENCE, ASSESSEES APPEAL ON GROUND NO. 3 IS ALLOWED. BEING AGGRIEVED BY THE ORDER OF LD. CIT(A), REVENUE IS IN APPEAL BEFORE US. 6. BEFORE US LD. DR SUBMITTED THAT THE ACTIVITIES O F THE BUSINESS OF SHAKEEL AHMED TRADING CO. LLC ARE NOT MATCHING WITH THE BUS INESS OF THE ASSESSEE. AS PER THE LD. DR THE ASSESSEE IS INTO THE BUSINESS OF ELE CTRONICS PRODUCTS WHEREAS THE ASSESSEE DEALS INTO THE BUSINESS OF FABRIC EXPORT B USINESS. THEREFORE THE COMMISSION PAID/PAYABLE IS BOGUS AND LIABLE TO BE DISALLOWED. SIMILARLY THE LD. DR SUBMITTED THAT THE COMMISSION AGENT AAYPEE INTERNATIONAL LIMITED H AS ITS BRANCH OFFICE IN INDIA AS EVIDENCED FROM THE PRINT OUT TAKEN FROM THE WEBSITE OF THE PARTY. THEREFORE THE ASSESSEE WAS LIABLE TO DEDUCT THE TAX WHICH IT FAIL ED TO DO SO. IN VIEW OF ABOVE THE EXPENSES OF THE COMMISSION NEEDS TO BE DISALLOWED. THE LD. DR VEHEMENTLY SUPPORTED THE ORDER OF THE AO. ITA NO.1133/KOL/2013 A.Y.2009-1 0 ITO WD-12(3) KOL. VS. M/S JAI VIKSHU NI KETAN PVT. LTD. PAGE 7 ON THE OTHER HAND THE LD. AR FILED A PAPER BOOK COM PRISING OF PAGES FROM 1 TO 136 AND SUBMITTED THAT THE EXPORT BUSINESS OF THE ASSES SEE HAS INCREASED MANY FOLDS AFTER TAKING THE SERVICES FROM THE COMMISSION AGENTS. THE COMMISSION EXPENSES TO M/S SATC CANNOT BE SUBJECT TO DISPUTE ON THE GROUND THA T THE ACTIVITIES AS DEPICTED ON ITS WEBSITE ARE NOT MATCHING WITH THE ASSESSEE. THE LD. AR IN SUPPORT OF HIS CLAIM HAS SUBMITTED THE LEDGER COPIES, BILLS, BANK PAYMENT AD VICES, COPY OF BANK STATEMENT, CERTIFICATE THAT THE PARTIES HAVE NO PERMANENT ESTA BLISHMENT IN INDIA FROM BOTH THE ABOVE STATED PARTIES WHICH ARE PLACED ON RECORD IN THE FORM OF THE PAPER BOOK. THE LD. AR RELIED ON THE ORDER OF THE LD. CIT(A). 7. WE HAVE HEARD THE RIVAL CONTENTION OF BOTH THE P ARTIES AND PERUSED THE MATERIALS AVAILABLE BEFORE US. ASSESSEE IN THE PRES ENT CASE HAS PAID COMMISSION TO TWO FOREIGN PARTIES. THE AO HAS DISALLOWED THE SAME ON TWO COUNTS I.E. WITHOUT DEDUCTION OF TDS AND GENUINENESS OF THE PARTIES TO WHOM THE C OMMISSION WAS PAID. HOWEVER THE LD. CIT(A) HAS DELETED THE ADDITION FOR THE REA SONS AS SPECIFIED IN PARA NO.4 & 5 OF HIS ORDER. NOW THE ISSUES BEFORE US ARISE SO AS TO WHETHER : 1. THE COMMISSION PAID TO FOREIGN PARTIES WHO ARE REND ERING SERVICES OUTSIDE INDIA AND HAVING NO PERMANENT ESTABLISHMENT IN INDI A ARE ELIGIBLE FOR PAYMENT WITHOUT TDS AS PER THE PROVISIONS OF THE ACT. 2. THE PARTIES TO WHOM THE PAYMENT OF COMMISSION PAID /TO BE PAID ARE GENUINE. FROM THE ABOVE FACTS, WE FIND THAT THE QUESTION OF TDS FROM THE PAYMENT OF COMMISSION ARISES IN THE AFORESAID FACTS & CIRCUMST ANCES WHEN THE PAYEE HAS SOME PERMANENT ESTABLISHMENT IN INDIA. IN THE INSTANT CA SE THE LD. DR FAILED TO BRING ANY SUBSTANTIVE EVIDENCE TO PROVE THAT THE PAYEE HAS AN Y PERMANENT ESTABLISHMENT IN INDIA. SIMILARLY, WE ALSO FIND THAT THE SERVICES WE RE RENDERED BY THE AFORESAID COMMISSION AGENTS OUTSIDE INDIA. THEREFORE THE INCO ME TO THESE COMMISSION AGENTS HAS NOT ACCRUED OR AROSE IN INDIA. ACCORDINGLY THE PAYMENT OF THE COMMISSION TO THE FOREIGN AGENTS IS GOVERNED BY THE PROVISIONS OF SEC TION 195 OF THE ACT. THEREFORE IN OUR CONSIDERED VIEW WE HOLD THAT THE ASSESSEE WAS N OT LIABLE TO DEDUCT THE TDS FROM THE PAYMENT OF THE COMMISSION. IN THIS CONNECTION W E RELY IN THE CASE OF GE INDIA ITA NO.1133/KOL/2013 A.Y.2009-1 0 ITO WD-12(3) KOL. VS. M/S JAI VIKSHU NI KETAN PVT. LTD. PAGE 8 TECHNOLOGY CENTRE PVT. LTD. VS. CIT & ANR 327 ITR 4 56 WHERE THE HONBLE SUPREME COURT OF INDIA HAS HELD AS UNDER:- THE MOST IMPORTANT EXPRESSION IN S. 195(1) CONSIST S OF THE WORDS ' CHARGEABLE UNDER THE PROVISIONS OF THE ACT '. A PERSON PAYING INTEREST OR ANY OTHER SUM TO A NON-RESIDENT IS NOT LIABLE TO DEDUCT TAX IF SU CH SUM IS NOT CHARGEABLE TO TAX UNDER THE IT ACT. FOR INSTANCE, WHERE THERE IS NO O BLIGATION ON THE PART OF THE PAYER AND NO RIGHT TO RECEIVE THE SUM BY THE RECIPI ENT AND THAT THE PAYMENT DOES NOT ARISE OUT OF ANY CONTRACT OR OBLIGATION BE TWEEN THE PAYER AND THE RECIPIENT BUT IS MADE VOLUNTARILY, SUCH PAYMENTS CA NNOT BE REGARDED AS INCOME UNDER THE IT ACT. IT MAY BE NOTED THAT S. 195 CONTE MPLATES NOT MERELY AMOUNTS, THE WHOLE OF WHICH ARE PURE INCOME PAYMENTS, IT ALS O COVERS COMPOSITE PAYMENTS WHICH HAS AN ELEMENT OF INCOME EMBEDDED OR INCORPORATED IN THEM. THUS, WHERE AN AMOUNT IS PAYABLE TO A NON-RESIDENT, THE PAYER IS UNDER AN OBLIGATION TO DEDUCT TAX AT SOURCE IN RESPECT OF SU CH COMPOSITE PAYMENTS. THE OBLIGATION TO DEDUCT TAX AT SOURCE IS, HOWEVER, LIM ITED TO THE APPROPRIATE PROPORTION OF INCOME CHARGEABLE UNDER THE ACT FORMI NG PART OF THE GROSS SUM OF MONEY PAYABLE TO THE NON-RESIDENT. THIS OBLIGATI ON BEING LIMITED TO THE APPROPRIATE PROPORTION OF INCOME FLOWS FROM THE WOR DS USED IN S. 195(1), NAMELY, 'CHARGEABLE UNDER THE PROVISIONS OF THE ACT '. IT IS FOR THIS REASON THAT VIDE CIRCULAR NO. 728, DT. 30TH OCT., 1995 THE CBDT HAS CLARIFIED THAT THE TAX DEDUCTOR CAN TAKE INTO CONSIDERATION THE EFFECT OF DTAA IN RESPECT OF PAYMENT OF ROYALTIES AND TECHNICAL FEES WHILE DEDUCTING TAX AT SOURCE. THE APPLICATION OF S. 195(2) PRE-SUPPOSES THAT THE PERSON RESPONSIBLE FOR MAKING THE PAYMENT TO THE NON-RESIDENT IS IN NO DOUBT THAT TAX IS PAYABLE IN RESPECT OF SOME PART OF THE AMOUNT TO BE REMITTED TO A NON-RESIDENT BUT IS NOT SURE AS TO WHAT SHOULD BE THE PORTION SO TAXABLE OR IS NOT SURE AS TO THE AMOUNT OF TAX TO BE DEDUCTED. IN SUCH A SITUATION, HE IS REQUIRED TO MAKE AN APPLICATION TO THE ITO(TDS) FOR DETERMINING THE AMOUNT. IT IS ONLY WHEN THESE CONDI TIONS ARE SATISFIED AND AN APPLICATION IS MADE TO THE ITO(TDS) THAT THE QUESTI ON OF MAKING AN ORDER UNDER S. 195(2) WILL ARISE. WHILE DECIDING THE SCOP E OF S. 195(2) IT IS IMPORTANT TO NOTE THAT THE TAX WHICH IS REQUIRED TO BE DEDUCT ED AT SOURCE IS DEDUCTIBLE ONLY OUT OF THE CHARGEABLE SUM. THIS IS THE UNDERLY ING PRINCIPLE OF S. 195. HENCE, APART FROM S. 9(1), SS. 4, 5, 9, 90, 91 AS W ELL AS THE PROVISIONS OF DTAA ARE ALSO RELEVANT, WHILE APPLYING TDS PROVISIONS. R EFERENCE TO ITO(TDS) UNDER S. 195(2) OR S. 195(3) EITHER BY THE NON-RESI DENT OR BY THE RESIDENT PAYER IS TO AVOID ANY FUTURE HASSLES FOR BOTH RESIDENT AS WELL AS NON-RESIDENT. SECS. 195(2) AND 195(3) ARE SAFEGUARDS. THE SAID PROVISIO NS ARE OF PRACTICAL IMPORTANCE. FROM THIS IT FOLLOWS THAT WHERE A PERSO N RESPONSIBLE FOR DEDUCTION IS FAIRLY CERTAIN THEN HE CAN MAKE HIS OWN DETERMIN ATION AS TO WHETHER THE TAX WAS DEDUCTIBLE AT SOURCE AND, IF SO, WHAT SHOULD BE THE AMOUNT THEREOF. IF THE CONTENTION OF THE DEPARTMENT THAT THE MOMENT THERE IS REMITTANCE THE OBLIGATION TO DEDUCT TAX AT SOURCE ARISES IS TO BE ACCEPTED THEN THE WORDS ' CHARGEABLE UNDER THE PROVISIONS OF THE ACT ' IN S. 195(1) WOULD BE OBLITERATED. THE SAID EXPRESSION IN S. 195(1) SHOWS THAT THE REMITTANCE HAS GOT TO BE OF A TRADING RECEIPT, THE WHOLE OR PART OF WH ICH IS LIABLE TO TAX IN INDIA. ITA NO.1133/KOL/2013 A.Y.2009-1 0 ITO WD-12(3) KOL. VS. M/S JAI VIKSHU NI KETAN PVT. LTD. PAGE 9 THE PAYER IS BOUND TO DEDUCT TAX AT SOURCE ONLY IF THE INCOME IS ASSESSABLE IN INDIA. IF INCOME IS NOT SO ASSESSABLE, THERE IS NO QUESTION OF TAX AT SOURCE BEING DEDUCTED. TRANSMISSION CORPORATION OF A.P. LTD. VS. CIT (1999) 155 CTR (SC) 489 : (1999) 239 ITR 587 (SC) AND VIJAY SHIP BREAKING CORPN. & ORS. VS. CIT (2008) 219 CTR (SC) 639 : (2008) 14 DTR (SC) 74 : (2009) 314 ITR 309 (SC) RELIED ON; CIT VS. COOPER ENGINEERING LTD. (1968) 68 ITR 457 (BOM) IMPLIEDLY APPROVED. SEC. 195 FALLS IN CHAPTER XVII WHICH DEALS WITH COL LECTION AND RECOVERY. CHAPTER XVII-B DEALS WITH DEDUCTION A T SOURCE BY THE PAYER. ON ANALYSIS OF VARIOUS PROVISIONS OF CHAPTER XVII ONE FINDS USE OF DIFFERENT EXPRESSIONS, HOWEVER, THE EXPRESSION 'SUM CHARGEABL E UNDER THE PROVISIONS OF THE ACT' IS USED ONLY IN S. 195. IN NONE OF THE PRO VISIONS THE EXPRESSION 'SUM CHARGEABLE UNDER THE PROVISIONS OF THE ACT' IS FOUN D, WHICH, IS AN EXPRESSION USED ONLY IN S. 195(1). IT FOLLOWS, THEREFORE, THAT THE OBLIGATION TO DEDUCT TAX AT SOURCE ARISES ONLY WHEN THERE IS A SUM CHARGEABLE U NDER THE ACT. SEC. 195(2) IS NOT MERELY A PROVISION TO PROVIDE INFORMATION TO TH E ITO (TDS). IT IS A PROVISION REQUIRING TAX TO BE DEDUCTED AT SOURCE TO BE PAID TO THE REVENUE BY THE PAYER WHO MAKES PAYMENT TO A NON-RESIDENT. THER EFORE, S. 195 HAS TO BE READ IN CONFORMITY WITH THE CHARGING PROVISIONS, I. E., SS. 4, 5 AND 9. THIS REASONING FLOWS FROM THE WORDS 'SUM CHARGEABLE UNDE R THE PROVISIONS OF THE ACT' IN S. 195(1). THE FACT THAT THE REVENUE HAS NO T OBTAINED ANY INFORMATION PER SE CANNOT BE A GROUND TO CONSTRUE S. 195 WIDELY SO AS TO REQUIRE DEDUCTION OF TAX AT SOURCE EVEN IN A CASE WHERE AN AMOUNT PAI D IS NOT CHARGEABLE TO TAX IN INDIA AT ALL. SEC. 195 CANNOT BE READ, AS SUGGES TED BY THE DEPARTMENT, NAMELY, THAT THE MOMENT THERE IS REMITTANCE THE OBL IGATION TO DEDUCT TAX AT SOURCE ARISES. IF SUCH A CONTENTION IS ACCEPTED IT WOULD MEAN THAT ON MERE PAYMENT INCOME WOULD BE SAID TO ARISE OR ACCRUE IN INDIA. THEREFORE, AS STATED EARLIER, IF THE CONTENTION OF THE DEPARTMENT WAS AC CEPTED IT WOULD MEAN OBLITERATION OF THE EXPRESSION ' SUM CHARGEABLE UNDER THE PROVISIONS OF THE ACT ' FROM S. 195(1). WHILE INTERPRETING A SECTION ONE HAS TO GIVE WEIGHTAGE TO EVERY WORD USED IN THAT SECTION. WHILE INTERPRETING THE PROVISIONS OF THE IT ACT ONE CANNOT READ THE CHARGING SECTIONS OF THAT ACT D E HORS THE MACHINERY SECTIONS. THE ACT IS TO BE READ AS AN INTEGRATED CO DE. HENCE, THE PROVISION RELATING TO TDS APPLIES ONLY TO THOSE SUMS WHICH AR E CHARGEABLE TO TAX UNDER THE IT ACT. IF THE CONTENTION OF THE DEPARTMENT THA T ANY PERSON MAKING PAYMENT TO A NON-RESIDENT IS NECESSARILY REQUIRED TO DEDUCT TAX AT SOURCE IS ACCEPTED THEN THE CONSEQUENCE WOULD BE THAT THE DEPARTMENT W OULD BE ENTITLED TO APPROPRIATE THE MONEYS DEPOSITED BY THE PAYER EVEN IF THE SUM PAID IS NOT CHARGEABLE TO TAX BECAUSE THERE IS NO PROVISION IN THE IT ACT BY WHICH A PAYER CAN OBTAIN REFUND. SEC. 237 R/W S. 199 IMPLIES THAT ONLY THE RECIPIENT OF THE SUM, I.E., THE PAYEE COULD SEEK A REFUND. IT MUST T HEREFORE FOLLOW, IF THE DEPARTMENT IS RIGHT, THAT THE LAW REQUIRES TAX TO B E DEDUCTED ON ALL PAYMENTS. THE PAYER, THEREFORE, HAS TO DEDUCT AND PAY TAX, EV EN IF THE SO-CALLED DEDUCTION COMES OUT OF HIS OWN POCKET AND HE HAS NO REMEDY WH ATSOEVER, EVEN WHERE THE SUM PAID BY HIM IS NOT A SUM CHARGEABLE UNDER THE A CT. THE INTERPRETATION OF THE DEPARTMENT, THEREFORE, NOT ONLY REQUIRES THE WO RDS 'CHARGEABLE UNDER THE PROVISIONS OF THE ACT' TO BE OMITTED, IT ALSO LEADS TO AN ABSURD CONSEQUENCE. ITA NO.1133/KOL/2013 A.Y.2009-1 0 ITO WD-12(3) KOL. VS. M/S JAI VIKSHU NI KETAN PVT. LTD. PAGE 10 THE INTERPRETATION PLACED BY THE DEPARTMENT WOULD R ESULT IN A SITUATION WHERE EVEN WHEN THE INCOME HAS NO TERRITORIAL NEXUS WITH INDIA OR IS NOT CHARGEABLE IN INDIA, THE GOVERNMENT WOULD NONETHELESS COLLECT TAX. SEC. 195(2) PROVIDES A REMEDY BY WHICH A PERSON MAY SEEK A DETERMINATION O F THE ' APPROPRIATE PROPORTION OF SUCH SUM SO CHARGEABLE ' WHERE A PROPORTION OF THE SUM SO CHARGEABLE IS LIABLE TO TAX. THE ENTIRE BASIS OF TH E DEPARTMENT'S CONTENTION IS BASED ON ADMINISTRATIVE CONVENIENCE IN SUPPORT OF I TS INTERPRETATION. THERE IS NO MERIT IN THE CONTENTION. AS STATED HEREINABOVE, S. 195(1) USES THE EXPRESSION 'SUM CHARGEABLE UNDER THE PROVISIONS OF THE ACT.' O NE HAS TO GIVE WEIGHTAGE TO THOSE WORDS. FURTHER, S. 195 USES THE WORD ' PAYER ' AND NOT THE WORD ' ASSESSEE '. THE PAYER IS NOT AN ASSESSEE. THE PAYER BECOMES AN ASSESSEE-IN- DEFAULT ONLY WHEN HE FAILS TO FULFILL THE STATUTORY OBLIGATION UNDER S. 195(1). IF THE PAYMENT DOES NOT CONTAIN THE ELEMENT OF INCOME THE PAYER CANNOT BE MADE LIABLE. HE CANNOT BE DECLARED TO BE AN ASSESSEE-IN- DEFAULT. THE CONTENTION OF THE DEPARTMENT IS BASED ON AN APPREHENSION WHICH IS ILL FOUNDED. THE PAYER IS ALSO AN ASSESSEE UNDER THE ORDINARY PROVISIONS OF T HE IT ACT. WHEN THE PAYER REMITS AN AMOUNT TO A NON-RESIDENT OUT OF INDIA HE CLAIMS DEDUCTION OR ALLOWANCES UNDER THE IT ACT FOR THE SAID SUM AS AN ' EXPENDITURE '. UNDER S. 40(A)(I), INSERTED VIDE FINANCE ACT, 1988 W.E.F. 1S T APRIL, 1989, PAYMENT IN RESPECT OF ROYALTY, FEES FOR TECHNICAL SERVICES OR OTHER SUMS CHARGEABLE UNDER THE IT ACT WOULD NOT GET THE BENEFIT OF DEDUCTION I F THE ASSESSEE FAILS TO DEDUCT TAX AT SOURCE IN RESPECT OF PAYMENTS OUTSIDE INDIA WHICH ARE CHARGEABLE UNDER THE IT ACT. THIS PROVISION ENSURES EFFECTIVE COMPLI ANCE OF S. 195 RELATING TO TDS IN RESPECT OF PAYMENTS OUTSIDE INDIA IN RESPECT OF ROYALTIES, FEES OR OTHER SUMS CHARGEABLE UNDER THE IT ACT. IN A GIVEN CASE W HERE THE PAYER IS AN ASSESSEE HE WILL DEFINITELY CLAIM DEDUCTION UNDER T HE IT ACT FOR SUCH REMITTANCE AND ON INQUIRY IF THE AO FINDS THAT THE SUMS REMITT ED OUTSIDE INDIA COMES WITHIN THE DEFINITION OF ROYALTY OR FEES FOR TECHNI CAL SERVICE OR OTHER SUMS CHARGEABLE UNDER THE IT ACT THEN IT WOULD BE OPEN T O THE AO TO DISALLOW SUCH CLAIM FOR DEDUCTION. SIMILARLY, VIDE FINANCE ACT, 2 008, W.E.F. 1 ST APRIL, 2008 SUB-S. (6) HAS BEEN INSERTED IN S. 195 WHICH REQUIR ES THE PAYER TO FURNISH INFORMATION RELATING TO PAYMENT OF ANY SUM IN SUCH FORM AND MANNER AS MAY BE PRESCRIBED BY THE BOARD. THEREFORE, THERE ARE ADEQU ATE SAFEGUARDS IN THE ACT WHICH WOULD PREVENT REVENUE LEAKAGE. CIT VS. ELI LILLY & COMPANY (INDIA) (P) LTD. (2009) 223 CTR (SC) 20 : (2009) 21 DTR (SC) 74 : ( 2009) 312 ITR 225 (SC) RELIED ON; TRANSMISSION CORPORATION OF A.P. LTD. VS. CIT (1999) 155 CTR (SC) 489 : (1999) 239 ITR 587 (SC) DISTINGUISHED; CIT VS. SAMSUNG ELECTRONICS CO. LTD. & ORS. (2009) 227 CTR (KAR) 335 : (2009) 31 DTR (KAR) 257 AND CIT (INTERNATIONAL TAXATION) & ANR. VS. SONATA INFO RMATION TECHNOLOGY LTD. (2010) 232 CTR (KAR) 20 : (2010) 38 DTR (KAR) 350 SET ASIDE. SINCE THE HIGH COURT DID NOT GO INTO THE MERITS OF THE CASE ON THE QUESTION OF PAYMENT OF ROYALTY, THE IMPUGNED JUDGME NTS OF THE HIGH COURT ARE SET ASIDE AND THESE CASES ARE REMITTED TO THE HIGH COURT FOR DE NOVO CONSIDERATION OF THE CASES ON MERITS. A PERSON PAYI NG INTEREST OR ANY OTHER SUM TO A NON-RESIDENT IS LIABLE TO DEDUCT TAX UNDER S. 195 ONLY IF SUCH SUM IS CHARGEABLE TO TAX IN INDIA AND NOT OTHERWISE. ITA NO.1133/KOL/2013 A.Y.2009-1 0 ITO WD-12(3) KOL. VS. M/S JAI VIKSHU NI KETAN PVT. LTD. PAGE 11 SIMILARLY FOR THE GROUNDS OF APPEAL OF THE REVENUE THAT THE ASSESSEE FAILED TO SUBSTANTIATE THE GENUINENESS OF THE EXPENSES WE FIN D THAT THE PAYMENT HAS BEEN PAID THROUGH BANKING CHANNEL, THE ASSESSEE HAS PRODUCED THE COPIES OF THE BILLS OF THE COMMISSION AGENTS. WE ALSO FIND THAT THERE IS A HUG E INCREASED IN THE EXPORT TURNOVER OF THE ASSESSEE BUSINESS. IN THE EARLIER YEAR THE E XPORT TURNOVER OF THE BUSINESS OF THE ASSESSEE WAS RS.13 CRORES ONLY AND FOR THE YEAR UND ER CONSIDERATION THE TURNOVER FROM THE EXPORT BUSINESS HAS BEEN SHOWN FOR RS. 80 CRORE S. IN VIEW OF ABOVE, WE ARE OF THE CONSIDERED OPINION THAT THE ASSESSEE HAS JUSTIFIED ITS COMMISSION EXPENSES CLAIMED IN THE PROFIT AND LOSS ACCOUNT. IN THIS CONNECTION WE RELY IN THE CASE OF CIT VS INBUILT MERCHANT PRIVATE LIMITED IN ITAT NO. 225 OF 2013 , G.A. NO. 3825 OF 2013 WHERE THE JURISDICTIONAL HIGH COURT OF CALCUTTA HAS HELD AS UNDER:- THE VIEWS EXPRESSED BY THE ASSESSING OFFICER ARE E RRONEOUS IN LAW. THE ASSESSING OFFICER HAS OVERLOOKED THE IMPORTANCE OF THE BOOKS OF ACCOUNT MAINTAINED IN THE ORDINARY COURSE OF BUSINESS. REFE RENCE IN THIS REGARD MAYBE MADE TO SUB-SECTION (2) OF SECTION32 OF THE INDIAN EVIDENCE ACT, 1872. THE BOOKS OF ACCOUNT MAINTAINED IN THE ORDINARY COURSE OF BUSINESS ARE RELEVANT AND THEY CANNOT BE DISCARDED IN THE ABSENCE OF APPR OPRIATE REASONS. THE MERE FACT THAT RECIPIENT DID NOT REPLY IN SOME CASES OR THEY WERE NOT FOUND AT THE ADDRESS FURNISHED BY THE ASSESSEE DOES NOT IN THE L EAST PROVE THE FACT THAT THEY WERE NON EXISTENT OR THAT THE PAYMENTS SHOWN TO HAV E BEEN MADE BY THE ASSESSEE WERE IMAGINARY. WITH THE ADVANCEMENT OF TE CHNOLOGY, IT HAS BECOME POSSIBLE TO SELL GOODS THROUGHOUT THE COUNTRY THROU GH THE INTERNET. FOR THAT PURPOSE, AGENTS ARE REQUIRED THROUGHOUT THE COUNTRY . THE MECHANISM IN THAT REGARD HAS BEEN DISCLOSED BY THE SE AND HAS BEEN RE CORDED IN THE ORDER OF THE CIT(APPEALS). FOR THE PURPOSE OF CARRYING ON ITS BU SINESS, THE ASSESSEE HAS TO RECRUIT THE AGENTS. IT MAY NOT BE POSSIBLE FOR THE ASSESSEE TO KNOW THEM PERSONALLY. WHATEVER ADDRESS WAS FURNISHED TO THE A SSESSEE, HAS BEEN DISCLOSED TO THE INCOME-TAX DEPARTMENT. PAYMENTS WERE ADMITTE DLY MAD BY CHEQUE AFTER DEDUCTION OF TAX. THE TAX DEDUCTED AS SOURCE HAS DU LY BEEN DEPOSITED. THE JUDGMENT IN THE CASE OF CIT VS. PRECISION FINANCE V T. LD., REPORTED IN 208 ITR 465 RELIED UPON BY MR. BHOWMICK DOES NOT REALLY ASS IST HIM. THE AFORESAID JUDGMENT IS AN AUTHORITY FOR THE PROPOSITION THAT M ERE PAYMENT BY ACCOUNT PAYEE CHEQUE CANNOT ESTABLISH THAT THE TRANSACTIONS WAS GENUINE, BUT IN THE CASE BEFORE US. BESIDES THE FACT THAT PAYMENT WAS M ADE BY CHEQUUE, THERE ARE OTHER PIECES OF EVIDENCE AVAILABLE WHICH ARE FOLLOW S: A) BOOKS OF ACCOUNTS MAINTAINED BY THE ASSESSEE IN THE ORDINARY COURSE OF BUSINESS; B) DEDUCTION OF TAX AT SOURCE; C) DEPOSIT OF THE MONEY DEDUCTED AT SOURCE; D) PARTICU LARS OF THE RECIPIENT WERE DULY FURNISHED; WE ARE, AS SUCH, OF THE OPINIO N THAT THE VIEWS ITA NO.1133/KOL/2013 A.Y.2009-1 0 ITO WD-12(3) KOL. VS. M/S JAI VIKSHU NI KETAN PVT. LTD. PAGE 12 EXPRESSED BY THE LEARNED TRIBUNAL ARE UNEXCEPTIONAB LE. WE, THEREFORE REFUSE TO ADMIT THE APPEAL. THE APPEAL IS THUS DISM ISSED. RESPECTFULLY FOLLOWING THE PRECEDENT AS ABOVE WE FI ND NO REASON TO INTERFERE WITH THE FINDING ARRIVED BY THE LD. CIT(A). IN THE CIRCUMST ANCES, THIS ISSUE OF REVENUES APPEAL IS DISMISSED. ACCORDINGLY, AO IS DIRECTED. 8. IN THE RESULT, REVENUES APPEAL STANDS DISMISSED. ORDER PRONOUNCED IN OPEN COURT ON 23/09/2016 SD/- SD/- (S.S.VISWANETHRA RAVI) (WASEEM AHMED) JUDICIAL MEMBER ACCOUNTANT MEMBER *DKP ! - 23/09/2016 / KOLKATA / COPY OF ORDER FORWARDED TO:- 1. /APPELLANT-ITO WARD-12(3), P-7, CHOWRINGHEE SQ. 7 TH FL, KOLKATA-69 2. /RESPONDENT-M/S JAI VIKSHU NIKETAN PVT. LTD., 132/1 MAHATMA GANDHI ROAD, 4 TH FLOOR, KAVERI HOUSE, BURRAABAZR, KOLKATA-007 3. '# % / CONCERNED CIT 4. % - / CIT (A) 5. &'( ))'# , '# / DR, ITAT, KOLKATA 6. (*+ / GUARD FILE. /TRUE COPY/ BY ORDER/ , / '#,