Appeal details
Counselvise Citation
[2018] 121 COUNSELVISE.COM (IT) 5501 (ITAT-DELHI)
Assessee PAN
Bench
Appeal Number
Duration Of Justice
2 year(s) 2 month(s) 4 day(s)
Appellant
Respondent
Appeal Type
Income Tax Appeal
Pronouncement Date
08-05-2018
Appeal Filed By
Assessee
Order Result
Dismissed
Bench Allotted
E
Assessment Year
2011-2012
Appeal Filed On
04-03-2016
Judgement Text
IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCHES: C , NEW DELHI BEFORE SHRI N.K.SAINI, ACCOUNTANT MEMBER AND SMT. BEENA A PILLAI, JUDICIAL MEMBER ITA NO. 1206 /DEL/201 6 AY: 201 1 - 12 ITA NO. 6007 /DEL/2016 AY: 201 2 - 13 ITA NO. 6008/DEL/2016 AY: 2013 - 14 & ITA NO. 5693 /DEL/201 7 AY: 201 4 - 15 INTERNATIONAL MANAGEMENT GROUP (UK) LTD. BUILDING 10 - CIT(A), 18 TH FLOOR CYBER CITY GURGAON PAN: AABC19309N VS . DCIT, INTERNATIONAL TAXATION 2(1)(1) 4 TH FLOOR, E 2 BLOCK PRATYAKSH KAR BHAWAN CIVIC CENTRE J.L.NEHRU MARG NEW DELHI (APPELLANT) (RESPONDENT) APPELLANT BY : SH. RAVI SHARMA, ADV. RESPONDENT BY : SH. D.K.DHALL, CIT, D.R. DATE OF HEARING : 0 8/ 05 / 2018 DATE OF PRONOUNCEMENT : 08 / 05 / 2018 ORDER PER BE NCH THESE ARE APPEALS FILED BY ASSESSEE AGAINST ORDER DATED 20 TH JANUARY, 2016, 23 RD SEPTEMBER, 2016, 22 ND SEPTEMBER, 2016 AND 18 TH JULY, 2017 PASSED BY LD.ACIT, CIRCLE 2(1)(1), ITA NOS. 1206/DEL/16, ITA 6007/DEL/16, ITA 6008/DEL/16 & ITA 5693/DEL/17, AYS: 2011 - 12 TO 2014 - 15 INTERNATIONAL MANAGEMENT GROUP (UK) LTD. VS. DCIT 2 INTERNATIONAL TAXATION, FOR AYS 2011 - 12 TO 2014 - 15 RESPECTIVELY. THE IMPUGNED ORDERS PASSED BY LD. ACIT ARE PURSUANT TO DIRECTIONS U/S 144C OF THE INCOME TAX ACT, 1961 (THE ACT) PASSED BY THE DISPUTE RESOLUTION PANEL (DRP) FOR THE AYS UNDER CONSIDERATION . THE ISSUES RAISED BY ASSESSEE AGAINST THE IMPUGNED ORDER ARE COMMON AND IDENTICAL FOR ALL AYS BEFORE US , WITH A SMALL DIFFERENCE OF DISPUTED AMOUNT. FOR THE SAKE OF CONVENIENCE WE ARE REPRODUCING GROUNDS RAISED BY ASSESSEE FOR A.Y. 2011 - 12 AS UNDER: 1. THAT IN THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE ORDER PASSED BY THE LD. DEPUTY COMMISSIONER OF INCOME TAX (AO) UNDER SECTION 143(3) READ WITH SECTION 144C (13) OF THE INCOME TAX ACT (THE ACT) ASSESSING THE INCOME OF THE APPELLANT AT RS. 15,59,22,430/ - INSTEAD OF RETURN INCOME OF RS. 8,10,71,396/ - IS BAD IN LAW. 2. THAT IN FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. A.O. AS WELL AS HON BLE DISPUTE RESOLUTION PANEL (DRP) HAS NOT APPRECIATED THE MANDATE OF CLAU SE 6 OF ARTICLE 13 OF THE INDIA UK DOUBLE TAXATION AVOIDANCE AGREEMENT (DTAA) WHICH STATES THAT IF BUSINESS IS CARRIED THROUGH A P.E. AND THE PROPERTY, RIGHT OR CONTRACT IN RESPECT OF WHICH ROYALTIES/FEES FOR TECHNICAL SERVICES (FTS) ARISE ARE EFFECTIVELY CONNECTED WITH SUCH PE, THEN THE PROVISIONS OF ARTICLE 7 WILL BE APPLICABLE AND NOT ARTICLE 13 OF THE INDIA - UK DTAA. 3. THAT IN FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE HON BLE DISPUTE RESOLUTION PANEL (DRP) HAS NOT APPRECIATED THAT THE ATTRIB UTION TO THE PE HAS ALREADY BEEN EXAMINED AND VERIFIED BY THE LD.TPO AND THE SAME HAS BEEN ACCEPTED BY THE LD.AO AND, THEREFORE, THE BALANCE RECEIPTS CANNOT BE TAXED AS FTS. 4. THAT IN FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. A.O. AS WELL A S HON BLE DISPUTE RESOLUTION PANEL (DRP) HAS ITA NOS. 1206/DEL/16, ITA 6007/DEL/16, ITA 6008/DEL/16 & ITA 5693/DEL/17, AYS: 2011 - 12 TO 2014 - 15 INTERNATIONAL MANAGEMENT GROUP (UK) LTD. VS. DCIT 3 GROSSLY ERRED IN OBSERVING THAT THE BALANCE RECEIPT FROM BCCI AMOUNTING TO RS.7,41,73,414/ - WOULD COME WITHIN THE PURVIEW OF FTS AS PER PROVISIONS OF ARTICLE 13(4)(CIT(A) ) OF THE INDIA - UK DTAA. 5. THAT IN FACT S AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. A.O. AS WELL AS HON BLE DISPUTE RESOLUTION PANEL (DRP) HAS GROSSLY ERRED IN OBSERVING THAT THE RECEIPTS OF RS.6,77,624/ - FROM INTERNATIONAL MERCHANDISING CORPORATION BRANCH OFFICE WOULD COME WITHIN THE PURVIEW OF FTS AS PER PROVISIONS OF ARTICLE 13(4)(C) OF THE INDIA - UK DTAA. 6. THAT IN FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. A.O. AS WELL AS HON BLE DISPUTE RESOLUTION PANEL (DRP) HAS GROSSLY ERRED IN MISCONSTRUING THE PRINCIPLE OF MAKE AVAILABLE AS PER OF ARTICLE 13(4)(C) ) OF THE INDIA - UK DTAA AND ACCORDINGLY, ERRED IN HOLDING THAT THE RECEIPTS OF APPELLANT SATISFIES THE MAKE AVAILABLE PRINCIPLE AND IS TO BE TAXED AS FTS UNDER THE PROVISIONS OF INDIA UK DTAA. 7. THAT IN FACTS AND CIRC UMSTANCES OF THE CASE AND IN LAW, THE LD. A.O. AS WELL AS HON BLE DISPUTE RESOLUTION PANEL (DRP) ERRED IN HOLDING THAT IN THE PROCESS OF PROVIDING THE SERVICES, THE APPELLANT AHS TRANSFERRED THE TECHNICAL KNOWLEDGE, EXPERIENCE, SKILL, KNOW HOW OR PROCE SSES AND THE SAME WOULD REMAIN WITH BCCI EVEN AFTER THE EVENT OF RENDITION OF SERVICES IS COMPLETE. 2. AT THE OUTSET BOTH THE PARTIES SUBMIT TED THAT ALL ISSUES ARE SQUARELY COVERED AGAINST ASSESSEE VIDE ORDER DATED 04.10.2016 PASSED BY THIS TRIBUNAL IN ASSESSEE S OWN CASE FOR A.Y. 2010 - 11 IN ITA NO.1613/DEL/2015 AND 1646/DEL/2015. LD. COUNSEL PLACED BEFORE US COPY OF ORDER OF THIS TRIBUNAL DATED 4 OCTOBER, 2016 FOR A.Y. 2010 - 11. 3. WE HAVE PERUSED THE SUBMISSIONS ADVANCED BY BOTH THE SIDES IN THE LIGHT OF RECORDS FOR A.YS UNDER CONSIDERATION AND ITA NOS. 1206/DEL/16, ITA 6007/DEL/16, ITA 6008/DEL/16 & ITA 5693/DEL/17, AYS: 2011 - 12 TO 2014 - 15 INTERNATIONAL MANAGEMENT GROUP (UK) LTD. VS. DCIT 4 DECISION OF THIS TRIBUNAL IN ASSESSEE S OWN CASE FOR A.Y. 2010 - 11 WHICH IS RELIED UPON BY BOTH THE SIDES. 4 . IT IS OBSERVED THAT THE FACTUAL BACKGROUND FOR THE AYS UNDER CONSIDERA TION AS WELL AS FOR A.Y. 2010 - 11 ARE SIMILAR AND IDENTICAL NATURE. THE DISPUTE RAISED BY ASSESSEE IN GROUNDS OF APPEALS FOR A.YS UNDER CONSIDERATION IS REGARDING APPLICABILITY OF ARTICLE 13 AS PROPOSED BY REVENUE VIS - A - VIS ARTICLE 7 AS CONTENDED BY ASSESSEE , AS PER INDIA UK DTAA ALONG WITH ISSUE REGARDING ATTRIBUTION OF INCOME WHICH ARE EFFECTIVELY CONNECTED WITH THE P.E. OF THE ASSESSEE IN INDIA . 5. IT HAS BEEN OBSERVED THAT THESE ISSUES HAVE BEEN ADDRESSED BY THIS TRIBUNAL AS UNDER. 49 . IN VIEW OF ABOVE FACTS AND CIRCUMSTANCES WE ADJUDICATE THE APPEAL OF THE ASSESSEE AS UNDER: A. WITH RESPECT TO GROUND NO. 2, 3,4,5 AND 6 OF THE APPEAL OF THE ASSESSEE, WE HOLD THAT THAT THE RECEIPTS FROM THE SERVICES RENDERED OUTSIDE INDIA OF RS. 237750181/ - ARE CHARGEABLE TO TAX AS FEES FOR TECHNICAL SERVICES IN TERMS OF ARTICLE 13(4) (C) AS IT MAKES AVAILABLE THE TECHNOLOGY TO THE RECIPIENT OF SERVICES AND FURTHER THE PROVISIONS OF ARTICLE 13(6) OF THE LNDO UK DOUBLE TAXATION AVOIDANCE AGRE EMENT DOES NOT APPLY TO THIS SUM, AS IT DOES NOT 'ARISE THROUGH' AND ALSO NOT 'EFFECTIVELY CO NN ECTED' WITH THE PERMANENT ESTABLISHMENT OF THE APPELLANT. B. WITH RESPECT TO THE GROUND NO. 7 AND 8 OF THE APPEAL WE HOLD THAT INCOME OF RS 237750181/ - IS CHARG EABLE TO TAX UNDER ITA NOS. 1206/DEL/16, ITA 6007/DEL/16, ITA 6008/DEL/16 & ITA 5693/DEL/17, AYS: 2011 - 12 TO 2014 - 15 INTERNATIONAL MANAGEMENT GROUP (UK) LTD. VS. DCIT 5 SECTION 9 (1) (VII) (B) OF THE INCOME TAX ACT AS FEES FOR TECHNICAL SERVICES AND IT DOES NOT FALL INTO THE EXCEPTION THEREOF. C. WITH RESPECT TO GROUND NO. 9 OF THE APPEAL WE HOLD THAT RECEIPT OF THE APPELLANT SATISFIES THE 'MAKE AVAILA BLE' TEST AS PROVIDED UNDER ARTICLE 13 (4) ( C) OF THE INDIA UK DTAA AS FEES FOR TECHNICAL SERVICES. 6 . RESPECTFULLY FOLLOWING THE SAME , WE DISMISS THE APPEALS FILED BY ASSESSEE FOR ALL THE AYS UNDER CONSIDERATION. 7. IN THE RESULT, ALL THE APPEALS FILED BY THE ASSESSEE FOR ALL THE AYS UNDER CONSIDERATION ARE DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 08 TH MAY, 2018. SD/ - SD/ - (N.K.SAINI) (BEENA A PILLAI) ACCOUNTANTMEMBER JUDICIAL MEMBER DT. 08 TH M AY, 2018 MV ITA NOS. 1206/DEL/16, ITA 6007/DEL/16, ITA 6008/DEL/16 & ITA 5693/DEL/17, AYS: 2011 - 12 TO 2014 - 15 INTERNATIONAL MANAGEMENT GROUP (UK) LTD. VS. DCIT 6 COPY FORWARDED TO: - 1 . APPELLANT 2 . RESPONDENT 3 . CIT 4 . CIT(A) 5 . DR, ITAT - TRUE COPY - BY ORDER, ASSISTANT REGISTRAR ITAT DELHI BENCHES
