TVS Srichakra Limited, Maharashtra V. JCIT, Madurai

ITA 1146/CHNY/2014

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 90681 (ITAT-CHENNAI)
• Duration Of Justice: 1 year(s) 2 month(s) 16 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-07-2015
• Appeal Filed By: Assessee
• Bench Allotted: C
• Next Hearing Date: 19-05-2015
• Assessment Year: 2009-2010
• Appeal Filed On: 01-05-2014
• Court: TRIBUNAL
• Department Lawyers: A V SREEKANTH
• Assessee Lawyers: S A BALASUBRAMANYAN

Judgement Text

, , IN THE INCOME-TAX APPELLATE TRIBUNAL C BENCH, CHE NNAI , . ! ! ! ! , ' ' ' ' #$ #$ #$ #$ BEFORE SHRI CHANDRA POOJARI, ACCOUNTANT MEMBER & SHRI V. DURGA RAO, JUDICIAL MEMBER ./ I.T.A.NO.1146/MDS/2014 ' ! %! / ASSESSMENT YEAR :2009-10 M/S. TVS SRICHAKRA LIMITED, 10, JAWAHAR ROAD, MADURAI 625 002. [PAN: AAACT5557G] VS. THE JOINT COMMISSIONER OF INCOME TAX, CIRCLE I(1), MADURAI 652 002. ( &' &' &' &' /APPELLANT ) ( ()&' ()&' ()&' ()&' / RESPONDENT ) &' * + / APPELLANT BY : SHRI S.A.BALASUBRAMANYAN, ADVOCATE ()&' * + / RESPONDENT BY : SHRI A.V. SREEKANTH, JCIT * , / DATE OF HEARING : 19.05.2015 -.% * , /DATE OF PRONOUNCEMENT : 17.07.2015 / / / / / O R D E R PER V. DURGA RAO, JUDICIAL MEMBER : THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAIN ST THE ORDER OF THE LD. COMMISSIONER OF INCOME TAX (APPEALS) I, MADURAI , DATED 26.02.2014 RELEVANT TO THE ASSESSMENT YEAR 2009-10. 2. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE I S IN THE BUSINESS OF MANUFACTURER OF TYRES. IN THE ASSESSMENT ORDER, THE ASSESSING OFFICER HAS OBSERVED THAT THE ASSESSEE COMPANY HAS MADE PAYMENT S TOWARDS FOREIGN CONSULTANCY AMOUNTING TO .31,22,806/-. THE ASSESSING OFFICER HAS CALLED I.T.A. I.T.A. I.T.A. I.T.A. NO NONO NO. .. .1146 1146 1146 1146/M/ /M/ /M/ /M/14 1414 14 2 EXPLANATION FROM THE ASSESSEE WITH REGARD TO NON-CO MPLIANCE WITH TDS PROVISIONS. THE ASSESSEE HAS EXPLAINED BEFORE THE A SSESSING OFFICER THAT THE PAYMENT IS MADE TO THE PERSONS OUTSIDE INDIA FO R THE SERVICES RENDERED BY THEM OUTSIDE INDIA. THE COMMISSION IS PAID TO FO REIGN AGENT FOR PROCURING ORDERS BY THEM OUTSIDE INDIA AND PAYMENTS MADE IS N EITHER TECHNICAL SERVICES NOR PROFESSIONAL SERVICES; NO TDS IS REQUI RED TO BE DEDUCTED. THE ASSESSEE HAS NOT FILED ANY DETAILS BEFORE THE ASSES SING OFFICER IN RESPECT OF PAYMENTS MADE. THE ASSESSING OFFICER INVOKED SECTIO N 40A(I) OF THE ACT AND OBSERVING THAT THE ASSESSEE HAS NOT CONVINCED WHETH ER THE SAID TRANSACTION HAS BEEN CARRIED IN THE NATURE OF COMMISSION, OR FE ES FOR TECHNICAL SERVICES AND IF FEES FOR TECHNICAL SERVICES HAD BEEN THE CAS E, THEN TDS IS MANDATORY EVEN FOR NON-RESIDENT UNLESS COVERED UNDER DOUBLE T AXATION AVOIDANCE AGREEMENT. 3. ON APPEAL, THE LD. CIT(A) HAS CONSIDERED BASED ON THE INVOICES AND OBSERVED THAT PAYMENTS ARE MADE TOWARDS PROFESSIONA L SERVICES IN THE FORM OF CONSULTANCY AND UPHELD THE ORDER OF THE ASSESSIN G OFFICER. 4. BEFORE THE TRIBUNAL, THE LD. COUNSEL FOR THE AS SESSEE HAS SUBMITTED THAT THE PAYMENTS MADE TO THE PERSONS OUTSIDE INDIA FOR THE SERVICES RENDERED BY THEM, NO TDS PROVISIONS ARE ATTRACTED. 5. ON THE OTHER HAND, THE LD. DR SUPPORTED THE ORD ERS OF AUTHORITIES BELOW. I.T.A. I.T.A. I.T.A. I.T.A. NO NONO NO. .. .1146 1146 1146 1146/M/ /M/ /M/ /M/14 1414 14 3 6. WE HAVE HEARD BOTH SIDES, PERUSED THE MATERIALS ON RECORD AND GONE THROUGH THE ORDERS OF AUTHORITIES BELOW. WE FIND TH AT IT IS NOT CLEAR EITHER FROM THE ASSESSMENT ORDER OR FROM THE ORDER OF THE LD. C IT(A) AS WHAT ARE THE SERVICES ACTUALLY RENDERED BY THE PERSONS OUTSIDE I NDIA. UNLESS, THE DETAILS ARE FILED IN RESPECT OF THE PAYMENTS MADE FOR SERVI CES RENDERED, IT IS NOT APPROPRIATE TO DECIDE THE ISSUE I.E. 40A(I) APPLICA BLE OR NOT. THEREFORE, WE SET ASIDE THE ORDER OF THE LD. CIT(A) ON THIS ISSUE AND REMIT THE MATTER BACK TO THE ASSESSING OFFICER TO DECIDE THE ISSUE AFRESH AFTER CONSIDERING THE DETAILS OF PAYMENTS MADE BY THE ASSESSEE. THE ASSES SEE IS ALSO DIRECTED TO FILE ALL THE DETAILS OF PAYMENTS, NATURE OF SERVICE S RENDERED BY THE PERSONS OUTSIDE INDIA, ETC. BEFORE THE ASSESSING OFFICER. 7. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED ON FRIDAY, THE 17 TH OF JULY, 2015 AT CHENNAI. SD/- SD/- (CHANDRA POOJARI) ACCOUNTANT MEMBER (V. DURGA RAO) JUDICIAL MEMBER CHENNAI, DATED, THE 17.07.2015 VM/- / * (',01 21%, /COPY TO: 1. &' / APPELLANT, 2. ()&' / RESPONDENT, 3. 3 ( ) /CIT(A), 4. 3 /CIT, 5. 14 (',' /DR & 6. 5! 6 /GF.