Oceans Connect (India) Pvt Ltd, Pune V. Dy Director of Income Tax (International Taxation)-II, Pune

ITA 1282/PUN/2013

• Counselvise Citation: [2017] 126 COUNSELVISE.COM (IT) 7744 (ITAT-PUNE)
• Duration Of Justice: 4 year(s) 2 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-08-2017
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: A
• Next Hearing Date: 25-07-2017
• Assessment Year: 2009-2010
• Appeal Filed On: 10-06-2013
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Assessee Lawyers: PRAKASH K JOTWANI
• Keywords: Double taxation relief; Retrospective amendment; Permanent establishment; Question of law
• Section: 201(1); 2; 10

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH, PUNE . , , , BEFORE SHRI D. KARUNAKARA RAO, AM AND SHRI VIKAS AWASTHY, JM . / ITA NO S. 1282, 1283 & 1284 /P U N/201 3 / ASSESSMENT YEAR S : 20 09 - 10, 2010 - 11 & 2011 - 12 OCEANS CONNECT (INDIA) PVT. LTD., 501, 6 TH FLOOR, BUILDING NO. 6, COMMERZONE, YERAWADA, PUNE 411006 PAN : AAGCS0318E ....... / APPELLANT / V/S. DY. DIRECTOR OF INCOME TAX, (INTERNATIONAL TAXATION) - II, PUNE / RESPONDENT ASSESSEE BY : S HRI PRAKASH K. JOTWANI REVENUE BY : SHRI ACHAL SHARMA / DATE OF HEARING : 25 - 07 - 2017 / DATE OF PRONOUNCEMENT : 18 - 0 8 - 2017 / ORDER PER VIKAS AWASTHY, JM : TH ESE THREE APPEALS BY THE ASSESSEE FOR ASSESSMENT YEARS 2009 - 10, 2010 - 11 AND 2011 - 12 ARE DIRECTED AGAINST THE ORDER OF COMMISSIONER OF INCOME TAX (APPEALS) - IT/TP, PUNE DATED 21 - 03 - 2013 COMMON FOR ALL THE AFORESAID ASSESSMENT YEARS , PASSED U/S. 201(1) AND 201(1A) O F THE INCOME TAX ACT, 1961 (HEREINAFTER REFERRED TO AS THE ACT ). 2 ITA NO S. 1282, 1283 & 1284/PUN/2013, A.YS. 2009 - 10, 2010 - 11 & 2011 - 12 SINCE, ALL THE THREE APPEALS ARE EMANATING FROM SAME SET OF FACTS AND THE GROUNDS RAISED BY THE ASSESSEE IN ALL THE ASSESSMENT YEARS ARE IDENTICAL, T HESE APPEALS ARE TAKEN UP TOGETHER FOR ADJUDICATION AND ARE DECIDED BY THIS COMMON ORDER. 2. THE BRIEF FACTS OF THE CASE AS EMANATING FROM RECORDS ARE: THE ASSESSEE IS A CALL CENTRE AND IS PROVIDING SERVICES TO CUSTOMERS BASED IN UNITED KINGDOM (UK) . TO CARRY OUT THE BUSINESS EFFICIENTLY, THE ASSESSEE IS USING INTERNATIONAL PRIVATE LEASED CIRCUIT (IPLC). THE IPLC IS POINT - TO POINT PRIVATE LINE USED BY AN ORGANIZATION TO COMMUNICATE BETWEEN OFFICES THAT ARE GEOGRAPHICALLY DISPERSED THROUGHOUT THE WORLD. THE ASSESSEE IS USING IPLC SERVICES PROVIDED BY VIDESH SANCHAR NIGAM LIMITED (VSNL) AND VERIZON COMMUNICATIONS, SINGAPORE PTE LTD. (VERIZON) USING UNDER - SEA CABLES. VSNL IS PROVIDING SERVICES TO ASSESSEE WITHIN INDIAN TERRITORY, WHEREAS VERIZON IS PROVIDING CONNECTIVITY TO ASSESSEE OUTSIDE INDIA. DURING THE ASSESSMENT YEARS UNDER APPEAL, THE ASSESSEE HAD MADE PAYMENTS TO VERIZON FOR USING ITS IPCL SERVICES. ON THE PAYMENTS SO MADE , THE ASSESSEE DID NOT DEDUCT TAX AT SOURCE. THE ASSESSING OFFIC ER INITIATED PROCEEDINGS AGAINST THE ASSESSEE FOR VIOLATING THE PROVISIONS OF SECTION 195 OF THE ACT. THE ASSESSEE WAS HELD TO BE DEEMED ASSESSEE IN DEFAULT U/S. 201(1) AND INTEREST WAS ALSO CHARGED FOR NON - DEDUCTION OF TAX AT SOURCE U/S. 201(1A) OF THE A CT. AGGRIEVED BY THE ORDER S PASSED U/S. 201(1) AND 201(1A) FOR ASSESSMENT YEARS 2009 - 10, 2010 - 11 AND 2011 - 12 ALL DATE D 05 - 03 - 2015, THE ASSESSEE FILED SEPARATE APPEAL S BEFORE THE COMMISSIONER OF INCOME TAX (APPEALS). THE COMMISSIONER OF INCOME TAX (APPE ALS) REJECTED THE CONTENTIONS OF THE ASSESSEE AND DISMISSED THE APPEALS. NOW, THE ASSESSEE 3 ITA NO S. 1282, 1283 & 1284/PUN/2013, A.YS. 2009 - 10, 2010 - 11 & 2011 - 12 IS IN SECOND APPEAL BEFORE THE TRIBUNAL ASSAILING THE FINDINGS OF COMMISSIONER OF INCOME TAX (APPEALS). 3. SHRI PRAKASH K. JOTWANI APPEARING ON BEHALF OF THE ASSE SSEE SUBMITTED THAT IDENTICAL GROUNDS HAVE BEEN RAISED IN ALL THE THREE APPEALS. THE ASSESSEE IS NOT PRESSING GROUND NO. 1. THE SUBSTANTIVE GROUNDS IN THE APPEALS ARE GROUND NOS. 4 AND 5. THE OTHER GROUNDS ARE ARGUMENTATIVE AND ARE IN SUPPORT OF THE MAI N GROUNDS RAISED. THE LD. AR SUBMITTED THAT THE ASSESSEE HAS MADE PAYMENT TO VERIZON FOR USE OF B ANDWIDTH. ADMITTEDLY, THE PAYMENTS WERE MADE WITHOUT DEDUCTION OF TAX AT SOURCE . THE ASSESSEE HAS NOT DEDUCTED TAX AT SOURCE ON THE SAID PAYMENTS ON STRENGT H OF LETTER DATED 21 - 06 - 2007 ISSUED BY VERIZON . THE SAID LETTER IS AT PAGE 7 OF THE PAPER BOOK. THE LD. AR SUBMITTED THAT VERIZON HAS PROVIDED SERVICES TO THE ASSESSEE OUTSIDE INDIA. VERIZON HAS NO OFFICE OR PERMANENT ESTABLISHMENT IN INDIA. THEREFORE, THERE WAS NO QUESTION OF DEDUCTING TAX AT SOURCE ON THE PAYMENTS MADE TO VERIZON FOR THE SERVICES RENDERED BEYOND INDIAN TERRITORY. THE ASSESSEE MADE FIRST PAYMENT TO VERIZON FOR UTILIZING ITS IPCL SERVICES IN THE PERIOD RELEVANT TO ASSESSMENT YEAR 2004 - 05. THE FIRST PAYMENT MADE WAS ALSO WITHOUT DEDUCTING TAX AT SOURCE. NO OBJECTION WAS RAISED BY THE DEPARTMENT ON SUCH PAYMENTS TILL ASSESSMENT YEAR 2008 - 09. DURING THE ASSESSMENT YEAR 2008 - 09 REOPENING PROCEEDINGS WERE INITIATED AND IT WAS HELD THAT P AYMENTS MADE TO VERIZON ARE LIABLE TO TAX. THE CHENNAI BENCH OF THE TRIBUNAL IN THE CASE OF VERIZON COMMUNICATION SINGAPORE PTE LTD. VS. INCOME TAX OFFICER REPORTED AS 45 SOT 263 VIDE ORDER DATED 07 - 01 - 2011 HELD THAT VERIZON COMMUNICATION SINGAPORE PTE LT D. IS A TAXABLE ENTITY IN INDIA. TILL THE TIME CHENNAI BENCH OF THE TRIBUNAL HA D NOT PASSED THE ORDER HOLDING VERIZON AS TAXABLE ENTITY IN INDIA THE ASSESSEE WAS UNDER BONAFIDE BELIEVE THAT NO TDS IS TO BE 4 ITA NO S. 1282, 1283 & 1284/PUN/2013, A.YS. 2009 - 10, 2010 - 11 & 2011 - 12 DEDUCTED ON THE PAYMENTS MADE TO VERIZON. THEREA FTER, FROM ASSESSMENT YEAR 2012 - 13 THE ASSESSEE HAS STARTED DEDUCTING TAX AT SOURCE ON THE PAYMENTS MADE TO VERIZON ALTHOUGH THE VERIZON HAS BEEN PROTESTING AGAINST SUCH DEDUCTION OF WITHHOLDING TAX. THE LD. AR SUBMITTED THAT WHERE THE ASSESSEE WAS UNDER BONAFIDE BELIE F THAT TAX IS NOT DEDUCTIBLE PROVISIONS OF SECTION 201(1) AND 201(1A) CANNOT BE INVOKED. TO SUPPORT THIS CONTENTION , THE LD. AR PLACED RELIANCE ON THE DECISION OF HONBLE DELHI HIGH COURT IN THE CASE OF COMMISSIONER OF INCOME TAX VS. NESTLE INDIA LTD. REPORTED AS 243 ITR 435. VERIZON ASSAILED THE ORDER PASSED BY THE TRIBUNAL BEFORE THE HONBLE MADRAS HIGH COURT. THE H ONBLE HIGH COURT VIDE ORDER DATED 07 - 11 - 2013 DISMISSED THE APPEAL OF VERIZON AND AFFIRMED THE ORDER OF TRIBUNAL [361 ITR575]. 3.1 THE LD. AR SUBMITTED THAT THE ISSUE WHETHER PAYMENTS MADE FOR USE OF B ANDWIDTH SERVICES PROVIDED BY OVERSEAS ENTITIES IS TAXABLE IN INDIA OR NOT IS A DEBATABLE ISSUE. THE HONBLE DELHI HIGH COURT IN THE CASE OF COMMISSIONER OF INCOME TAX VS. ESTEL COMMUNICATION (P) LTD. REPORTED AS 217 CTR 102 HAS UPHELD THE FINDINGS OF DEL HI BENCH OF THE TRIBUNAL , WHEREIN IT WAS HELD THAT PROVIDING OF B ANDWIDTH SERVICES TO THE SUBSCRIBERS IS NOT A TECHNICAL SERVICES AND IS THUS OUTSIDE THE PROVISIONS OF SECTION 9(1)(VII) OF THE ACT. THEREFORE, THE PAYMENTS MADE FOR SUCH SERVICES ARE NOT LI ABLE TO BE TAXED IN INDIA. SIMILAR VIEW WAS TAKEN BY DELHI BENCH OF TRIBUNAL IN THE CASE OF INCOME TAX OFFICER VS. PRIMENET GLOBAL LTD. REPORTED AS 48 ITR (TRIB.) 451 AND KOLKATA BENCH OF THE TRIBUNAL IN THE CASE OF DEPUTY COMMISSIONER OF INCOME TAX VS. S UBHOTOSH MAJUMDER REPORTED AS 176 TTJ 600. 5 ITA NO S. 1282, 1283 & 1284/PUN/2013, A.YS. 2009 - 10, 2010 - 11 & 2011 - 12 3.2 THE LD. AR SUBMITTED THAT THE SECOND ISSUE IN APPEAL IS WITH REGARD TO PAYMENT OF RENT TO VERIZON IN RESPECT OF PROPERTY SITUATED IN ENGLAND. THE AUTHORITIES BELOW HAVE NOT CONSIDERED AND APPRECIATED THE FACT S WITH REGARD TO PAYMENT OF RENT BY ASSESSEE IN RESPECT OF PROPERTY SITUATED IN ENGLAND. 4. SHRI ACHAL SHARMA REPRESENTING THE DEPARTMENT VEHEMENTLY DEFENDED THE ORDER OF COMMISSIONER OF INCOME TAX (APPEALS) IN CONFIRMING THE ADDITION. THE LD. DR SUBMI TTED THAT TO RESOLVE ANY DOUBT IN THE MINDS OF ASSESSEE I.E. WHETHER ANY PAYMENT MADE OR RECEIVED ARE LIABLE TO BE TAXED AS PER PROVISIONS OF THE ACT , THE REMEDY IS PROVIDED TO THE ASSESSEE WITHIN THE ACT ITSELF. THE ASSESSEE COULD HAVE APPROACHED A UTHORITY OF A DVANCE R ULING S SEEKING CLARIFICATION WHETHER ON SUCH PAYMENTS , THE ASSESSEE IS REQUIRED TO DEDUCT WITHHOLDING TAX. THE ASSESSEE HAS NOT MADE ANY EFFORT TO MAKE USE OF SUCH PLATFORM TO RESOLVE ITS DOUBT OR REINFORCE BONAFIDE BELIE F. THE LD. D R SUBMITTED THAT THE ORDER OF DELHI BENCH OF THE TRIBUNAL ON WHICH THE LD. AR HAS PLACED RELIANCE IS IN RESPECT OF SECTION 195J, THEREFORE, THE SAME IS NOT RELEVANT FOR DECIDING PRESENT APPEAL OF THE ASSESSEE. IT IS DISTINGUISHABLE ON FACTS. THE HONBLE MADRAS HIGH COURT HAS CATEGORICALLY HELD THAT IN VIEW OF RETROSPECTIVE AMENDMENT MADE TO DEFINITION OF ROYALTY IN SECTION 9(1)(VI) BY THE FINANCE ACT, 2012 BY INSERTING EXPLANATION 4 AND 5 W.E.F. 01 - 06 - 1976, B ANDWIDTH PAYMENT S MADE BY INDIAN CUSTOMERS TO VERIZON FOR USE OF INTERNATI ONAL PRIVATE LEASED C IRCUIT FOR PROVIDING END TO END INTERNET CONNECTIVITY OUTSIDE INDIA IS TAXABLE AS ROYALTY U/S. 9(1)(VI) , AS WELL AS UNDER ARTICLE 12(3) OF INDIA - SINGAPORE DTAA. 6 ITA NO S. 1282, 1283 & 1284/PUN/2013, A.YS. 2009 - 10, 2010 - 11 & 2011 - 12 5. W E HAVE HEARD THE SUBMISSIONS MADE BY THE REPRESENTATIVES OF RIVAL SIDES AND HAVE PERUSED THE ORDERS OF THE AUTHORITIES BELOW . IN APPEAL, THE ASSESSEE HAS ASSAILED THE ORDER OF COMMISSIONER OF INCOME TAX (APPEALS) IN INVOKING PROVISIONS OF SECTION 201(1) AND 201(1A) OF THE ACT IN RESPECT OF NON - DEDUCTION OF TAX AT SOURCE ON THE PAYMENTS MADE TO VERIZON. THE ASSESSEE HAS MADE PAYMENT TO VERIZON ON TWO COUNTS : I . PAYMENT MADE FOR USE OF IPCL SERVICES AND II . PAYMENT OF RENT IN RESPECT OF BUILDING IN UK. 6. THE ASSESSEE IN APPEAL HAS RAISED 8 GROUN DS. THE LD. AR OF THE ASSESSEE HAS STATED AT THE BAR THAT HE IS NOT PRESSING GROUND NO. 1. ACCORDINGLY, THE SAME IS DISMISSED AS NOT PRESSED. 7. THE ASSESSEE HAS ASSAILED INVOKING OF PROVISIONS OF SECTION 201(1) AND 201(1A) OF THE ACT IN RESPECT OF PA YMENT OF RENT IN PARA 4 OF THE GROUNDS OF APPEAL. THE ASSESSEE IN PARA 5 OF THE GROUNDS OF APPEAL HAS ASSAILED THE FINDINGS OF COMMISSIONER OF INCOME TAX (APPEALS) IN CONFIRMING THE DEMAND RAISED U/S. 201(1) AND 201(1A) OF THE ACT IN RESPECT OF PAYMENTS M ADE FOR USE OF IPCL SERVICES. THE OTHER GROUNDS RAISED IN APPEALS I.E. GROUND NOS. 2, 3, 6 AND 7 ARE ARGUMENTATIVE AND ARE IN SUPPORT OF GROUND NOS. 4 AND 5. THE GROUND NO. 8 OF THE APPEAL IS GENERAL IN NATURE. IN ALL THE THREE APPEALS THE GROUNDS RAISED BY THE ASSESSEE ARE IDENTICAL EXCEPT FOR THE AMOUNTS INVOLVED. 8. AS PER GROUNDS OF APPEAL , THE ASSESSEE HAS MADE PAYMENT OF RENT IN THE IMPUGNED ASSESSMENT YEARS FOR THE BUILDING TAKEN ON RENT LOCATED IN UK AS UNDER : 7 ITA NO S. 1282, 1283 & 1284/PUN/2013, A.YS. 2009 - 10, 2010 - 11 & 2011 - 12 ASSESSMENT YEAR RENT PAID 2009 - 10 RS.4,85,625/ - 2010 - 11 RS.6,31,313/ - 2011 - 12 RS.4,85,625/ - 9. THE CONTENTION OF THE ASSESSEE IS THAT THE AUTHORITIES BELOW HAVE FAILED TO CONSIDER THE FACT THAT PAYMENT OF RENT IS IN RESPECT OF PROPERTY SITUATED OUTSIDE INDIA. AFTER PERUSAL OF THE ORDERS PASSED BY AUTHORITI ES BELOW WE ALSO FIND THAT THERE IS NO DELIBERATION WITH REGARD TO PAYMENT OF RENT MADE BY ASSESSEE. THEREFORE, IN ALL FAIRNESS WE ARE OF VIEW THAT THIS ISSUE NEEDS A REVISIT TO THE FILE OF ASSESSING OFFICER FOR VERIFICATION AND DE NOVO ADJUDICATION. THE ASSESSING OFFICER IS DIRECTED TO CONSIDER THE CLAIM OF ASSESSEE AFTER AFFORDING OPPORTUNITY OF HEARING TO THE ASSESSEE, IN ACCORDANCE WITH LAW. ACCORDINGLY, GROUND NO. 4 RAISED IN THE APPEAL IS ALLOWED FOR STATISTICAL PURPOSE. 10. THE SECOND ISSUE RAI SED BY THE ASSESSEE IN APPEAL IS WITH REGARD TO PAYMENT S FOR USE OF IPCL SERVICES PROVIDED BY VERIZON. UNDISPUTEDLY, THE PAYMENTS FOR USING SUCH SERVICES HAVE BEEN MADE BY THE ASSESSEE WITHOUT DEDUCTION OF TAX AT SOURCE. THE STAND OF THE ASSESSEE IS THAT THE ASSESSEE HAS NOT DEDUCTED TAX AT SOURCE ON SUCH PAYMENTS ON THE STRENGTH OF LETTER DATED 21 - 07 - 2007 FROM VERIZON (AT PAGE 7 OF THE PAPER BOOK). THE MAIN DEFEN CE OF THE ASSESSEE IS THAT THE TDS WAS NOT DEDUCTED UNDER BONAFIDE BELIE F. 11. THE ISSUE WHETHER PAYMENTS MADE TO VERIZON FOR USE OF IPCL SERVICES ARE LIABLE TO BE TAXED WAS RAISED BEFORE THE HONBLE MADRAS HIGH IN THE 8 ITA NO S. 1282, 1283 & 1284/PUN/2013, A.YS. 2009 - 10, 2010 - 11 & 2011 - 12 CASE OF VERIZON COMMUNICATIONS SINGAPORE PTE LTD. VS. INCOME TAX OFFICER (SUPRA). THE SUBSTANTIAL QUESTION OF LAW RAISED BEF ORE THE HONBLE HIGH COURT ARE AS UNDER : '1. WHETHER THE TRIBUNAL WAS RIGHT ON FACTS AND IN LAW IN HOLDING THAT THE PAYMENTS RECEIVED BY THE APPELLANT FROM THE INDIAN CUSTOMERS FOR PROVISION OF BANDWIDTH/TELECOM SERVICES OUTSIDE INDIA IS ROYALTY FOR THE 'USE OF, OR THE RIGHT TO USE EQUIPMENT' UNDER SECTION 9(1)(VI) OF THE ACT? 2. WHETHER THE TRIBUNAL WAS RIGHT ON FACTS AND IN LAW IN HOLDING THAT THE PAYMENTS RECEIVED BY THE APPELLANT FROM THE INDIAN CUSTOMERS FOR PROVISION OF BANDWIDTH/TELECOM SERVICES OU TSIDE INDIA IS ROYALTY FOR THE 'USE OF, OR THE RIGHT TO USE EQUIPMENT' UNDER ARTICLE 12(3)(B) OF THE TAX TREATY?' THE HONBLE HIGH COURT AFTER CONSIDERING CATENA OF JUDGMENTS AND DTAA BETWEEN INDIA - SINGAPORE HELD : 102. IN THE CIRCUMSTANCES, WE REJECT THE CASE OF THE ASSESSEE HOLDING THAT THE RECEIPTS ARE LIABLE TO BE TREATED AS 'ROYALTY' FOR THE USE OF IPLC UNDER SECTION 9(1)(VI) READ WITH EXPLANATION 2(IVA) AND CORRESPONDINGLY ARTICLE 12(3) OF DTAA BETWEEN INDIA AND SINGAPORE. WE ALSO AGREE WITH THE T RIBUNAL THAT EVEN IF THE PAYMENT IS NOT TREATED AS ONE FOR THE USE OF THE EQUIPMENT, THE USE OF THE PROCESS WAS PROVIDED BY THE ASSESSEE, WHEREBY THROUGH THE ASSURED BANDWIDTH THE CUSTOMER IS GUARANTEED THE TRANSMISSION OF THE DATA AND VOICE. THE FACT THAT THE BANDWIDTH IS SHARED WITH OTHERS, HOWEVER, HAS TO BE SEEN IN THE LIGHT OF THE TECHNOLOGY GOVERNING THE OPERATION OF THE PROCESS AND THIS BY ITSELF DOES NOT TAKE THE ASSESSEE OUT OF THE SCOPE OF ROYALTY. THUS THE CONSIDERATION BEING FOR THE USE AND THE RIGHT TO USE OF THE PROCESS, IT IS 'ROYALTY' WITHIN THE MEANING OF CLAUSE (III) OF EXPLANATION 2 TO SECTION 9(1)(VI) OF THE INCOME TAX ACT. THUS, IN VIEW OF THE FACT THAT THE PAYMENTS MADE BY INDIAN ENTITIES TO VERIZON FOR USE OF IPCL SERVICES FOR PROVID ING END TO END CONNECTIVITY OUTSIDE INDIA ARE HELD TO BE IN THE NATURE OF ROYALTY U/S. 9(1)(VI) , AS WELL AS UNDER ARTICLE 12(3) OF INDIA - SINGAPORE DTAA , TH E ASSESSEE WAS LIABLE TO DEDUCT TDS ON SUCH PAYMENTS. SINCE, THE ASSESSEE HAS VIOLATED THE 9 ITA NO S. 1282, 1283 & 1284/PUN/2013, A.YS. 2009 - 10, 2010 - 11 & 2011 - 12 PROVISI ONS OF SECTION 195 OF THE ACT THE ASSESSEE HAS BEEN RIGHTLY HELD AS ASSESSEE IN DEFAULT. 1 2 . AS FAR AS PLEA OF BONAFIDE BELIE F FOR NON - DEDUCTION OF TDS IS CONCERNED , T HE ACT PROVIDES MECHANISM IN THE FORM OF AAR. IF THE ASSESSEE HAD ANY ELEMENT OF DOUB T REGARDING DEDUCTION OF TAX OR OTHER RELATED ISSUES , THE ASSESSEE COULD HAVE APPROACHED A UTHORITY OF A DVANCE R ULING S UNDER THE PROVISIONS OF SECTION 245Q OF THE ACT. BONAFIDE BELIE F ITSELF CANNOT BE TAKEN AS ALIBI FOR NOT COMPLYING WITH THE PROVISIONS OF THE ACT. 1 3 . THE ASSESSEE HAS PLACED RELIANCE ON THE DECISION OF HONBLE DELHI HIGH COURT IN THE CASE OF COMMISSIONER OF INCOME TAX VS. NESTLE INDIA LTD. (SUPRA) . W E FIND THAT THE HONBLE HIGH COURT REJECTED THE APPEAL OF REVENUE , AS THE RELIEF WAS GRANTED BY THE TRIBUNAL TO ASSESSEE THEREIN, ON FACTS. THE HONBLE HIGH COURT REFUSED TO INTERFERE WITH THE FINDINGS OF FACT. THE TRIBUNAL ON PECULIAR FACTS OF THAT CASE HAD GRANTED BENEFIT OF BONAFIDE BELIE F TO THE ASSESSEE AFTER HOLDING THAT THE CONVEYANCE ALLOWANCE WAS NOT TAXABLE AND THUS PROVISIONS OF SECTION 201(1) AND 201(1A) THE ACT ARE NOT OPERATIVE. THE RATIO LAID DOWN BY THE TRIBUNAL IN THE SAID CASE WAS ENTIRELY ON DIFFERENT SET OF FACTS AND THUS WOULD NO T APPLY IN THE FACTS OF THE PRESENT CASE. 1 4 . THE ASSESSEE DURING THE COURSE OF HIS SUBMISSIONS HAS PLACED RELIANCE ON THE DECISION S RENDERED BY HONBLE DELHI HIGH COURT IN THE CASE OF COMMISSIONER OF INCOME TAX VS. ESTEL COMMUNICATION (P) LTD. (SUPRA) AN D CERTAIN OTHER DECISIONS OF THE TRIBUNAL WHEREIN PAYMENTS MADE FOR BANDWIDTH ARE HELD TO BE NOT TAXABLE. WE ARE OF CONSIDERED VIEW THAT SUCH DECISIONS WOULD NOT COME TO THE RESCUE OF ASSESSEE AS THESE DECISIONS HAVE 10 ITA NO S. 1282, 1283 & 1284/PUN/2013, A.YS. 2009 - 10, 2010 - 11 & 2011 - 12 BEEN RENDERED IN THE FACTS AND CIRCUMS TANCES OF THE CASES OF PARTICULAR ASSESSEE S . THE HONBLE MADRAS HIGH IN THE CASE OF VERIZON COMMUNICATIONS SINGAPORE PTE LTD. (SUPRA) ITSELF HAS HELD THAT THE PAYMENTS FOR USE OF IPCL SERVICES IS IN THE NATURE OF PAYMENT OF ROYALTY AND IS THUS TAXABLE. WE DO NOT FIND ANY MERIT IN THE SUBMISSIONS OF THE ASSESSEE. THUS, GROUND NOS. 5 TO 7 ARE DIS MISSED . 1 5 . IN THE RESULT, ALL THE THREE APPEALS BY THE ASSESSEE ARE PARTLY ALLOWED FOR STATISTICAL PURPOSE IN THE AFORESAID TERMS. ORDER PRONOUNCED ON FRIDAY, THE 18 TH DAY OF AUGUST, 2017 . SD/ - SD/ - ( . /D. KARUNAKARA RAO ) ( / VIKAS AWASTHY) / ACCOUNTANT MEMBER / JUDICIAL MEMBER / PUNE; / DATED : 18 TH AUGUST, 2017 RK / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT. 2. / THE RESPONDENT. 3. ( ) / THE CIT(A) - IT/TP, PUNE 4. THE DIT (TP/IT), PUNE 5. , , , / DR, ITAT, A BENCH, PUNE. 6. / GUARD FILE. / / // TRUE COPY// / BY ORDER, / PRIVATE SECRETARY, , / ITAT, PUNE