Nalco Company, USA V. CIT (IT & TP), Kolkata, Kolkata

ITA 1334/KOL/2018

• Counselvise Citation: [2021] 109 COUNSELVISE.COM (IT) 5806 (ITAT-PUNE)
• Duration Of Justice: 2 year(s) 7 month(s) 18 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 05-02-2021
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Assessment Year: 2012-2013
• Appeal Filed On: 18-06-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Section: 143(3); 263

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH C, PUNE BEFORE SHRI R.S. SYAL, VICE PRESIDENT AND SHRI S.S. VISWANETHRA RAVI, JUDICIAL MEMBER ITA NO.1334/KOL/2018 / ASSESSMENT YEAR : 2012-13 NALCO COMPANY, USA NALCO WATER INDIA LIMITED, S.NO.238/239, 3 RD FLOOR, QUADRA-1, PANCHSHIL, MAGARPATTA ROAD, PUNE 411 028 MAHARASHTRA PAN : AACCN3661R VS. CIT(IT &TP), KOLKATA APPELLANT RESPONDENT / ORDER PER R.S.SYAL, VP : THIS APPEAL BY THE ASSESSEE, TRANSFERRED FROM KOLKATA TO PUNE UNDER DUE PROCESS, IS DIRECTED AGAINST THE ORDER DATE D 28- 03-2018 PASSED BY THE COMMISSIONER OF INCOME-TAX U/S.26 3 OF THE INCOME-TAX ACT, 1961 (HEREINAFTER ALSO CALLED THE ACT) IN RELATION TO THE ASSESSMENT YEAR 2012-13. 2. THIS APPEAL IS TIME BARRED BY 16 DAYS. THE ASSESSEE HAS FILED AN AFFIDAVIT GIVING THE REASONS FOR THE DELAY. SUCH ASSESSEE BY SHRI KETAN VED REVENUE BY SMT. AMRITA MISRA DATE OF HEARING 02-02-2021 DATE OF PRONOUNCEMENT 05-02-2021 ITA NO.1334/KOL/2018 NALCO COMPANY, USA 2 REASONS HAVE BEEN PERUSED AND FOUND TO BE SATISFACTORY. THE DELAY IS CONDONED AND THE APPEAL IS ADMITTED FOR HEARING. 3. WE HAVE HEARD BOTH THE SIDES AND GONE THROUGH THE RELEVANT MATERIAL ON RECORD. THE LD. CIT HELD THE ASSESSME NT ORDER PASSED U/S 143 OF THE ACT ON 29-02-2016 AS ERRO NEOUS AND PREJUDICIAL TO THE INTEREST OF REVENUE INASMUCH AS THE HEADQUARTER SERVICE FEES RECEIVED BY THE ASSESSEE WAS CLAIMED AND ACCEPTED AS NOT CHARGEABLE TO TAX. THE LD. CIT OPINED THAT THE AMOUNT OUGHT TO HAVE BEEN CONSIDERED AS ROYALTY/FEES FOR INCLUDED SERVICES U/S.9(1)(VI)/9(1)(VII) RE AD WITH ARTICLE 12 OF THE DOUBLE TAX AVOIDANCE AGREEMENT (DTAA) BETWEEN INDIA AND USA AND HENCE TAXABLE. IN REACHING THIS CONCLUSION, HE ALSO TOOK INTO CONSIDERATION THE ASSESSMENT ORDER PASSED U/S 143(3) FOR THE ASSESSMENT Y EAR 2014-15 IN WHICH THE AMOUNT OF HEAD QUARTER SERVICE FEE W AS HELD TO BE CHARGEABLE TO TAX. 4. HERE IT IS PERTINENT TO NOTE THAT THE LD. CIT TOOK SIMILA R VIEW IN HIS ORDER U/S 263 FOR THE A.Y. 2011-12. SUCH ORDE R FOR THE IMMEDIATELY PRECEDING YEAR CAME UP FOR CONSIDERATION BEFORE THE TRIBUNAL ALONG WITH THE INSTANT APPEAL. WE HAVE PASSED A SEPARATE ORDER IN ITA NO.1217/KOL/2017 FOR SUC H ITA NO.1334/KOL/2018 NALCO COMPANY, USA 3 PRECEDING YEAR AND ALLOWED THE ASSESSEES APPEAL BY SETTING ASIDE THE REVISION ORDER. WHILE SO HOLDING, THE TRIBUNAL TOOK NOTE OF THE FACT THAT THE AO EXAMINED THE ISSUE; APPLIED HIS MIND TO IT; AND THEN TOOK A POSSIBLE VIEW OF ACCEPTING THE ASSESSEES CLAIM, WHICH WAS BASED ON HIS OWN ORDER PAS SED U/S.143(3) FOR THE ASSESSMENT YEAR 2010-11. INSOFAR AS THE ASSESSMENT YEAR UNDER CONSIDERATION IS CONCERNED, THE AO HAD THE ASSESSMENT ORDERS FOR THE IMMEDIATELY PRECEDING TWO ASSESSMENT YEARS, NAMELY, 2010-11 AND 2011-12, IN BOTH OF WHICH THE ASSESSEES CLAIM ABOUT NON CHARGEABILITY OF THE AMOUNT OF HEADQUARTER SERVICE FEES WAS ACCEPTED. 5. IT IS WORTH MENTIONING THAT THE LD. CIT ALSO TOOK SUP PORT OF THE ASSESSMENT ORDER FOR THE ASSESSMENT YEAR 2014-15 IN CANVASSING A VIEW THAT THE AMOUNT SHOULD HAVE BEEN CHARGED TO TAX FOR THE YEAR UNDER CONSIDERATION. THE ASSESSMENT ORDER FOR THE A.Y. 2014-15 WAS PASSED ON 06-02-2017 MUCH A FTER THE PASSING OF THE ASSESSMENT ORDER BY THE AO FOR THE YE AR UNDER CONSIDERATION. 6. BOTH THE SIDES ARE AGREEABLE THAT THE FACTS AND CIRCUMSTANCES OF THE PRESENT APPEAL ARE MUTATIS MUTANDIS SIMILAR TO THOSE OF IMMEDIATELY PRECEDING ASSESSMENT YEARS. ITA NO.1334/KOL/2018 NALCO COMPANY, USA 4 ADOPTING THE REASONING IN OUR ORDER FOR THE ASSESSMENT YEA R 2011-12, WE SET-ASIDE THE IMPUGNED ORDER AND HOLD THAT THE LD. CIT WAS NOT JUSTIFIED IN BRANDING THE ASSESSMENT ORDER ERRONEOUS AS WELL AS PREJUDICIAL TO THE INTEREST OF THE REVENU E. 7. IN THE RESULT, THE APPEAL IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 05 TH FEBRUARY, 2021. SD/- SD/- (S.S. VISWANETHRA RAVI) (R.S.SYAL) JUDICIAL MEMBER VICE PRESIDE NT PUNE; DATED : 05 TH FEBRUARY, 2021 / COPY OF THE ORDER IS FORWARDED TO : 1. / THE APPELLANT; 2. / THE RESPONDENT; 3. THE CIT(IT&TP), KOLKATA 4. THE PR.CIT (IT&TP), NEW DELHI 5. , , / DR C, ITAT, PUNE 6. / GUARD FILE / BY ORDER, // TRUE COPY // SENIOR PRIVATE SECRETARY , / ITAT, PUNE ITA NO.1334/KOL/2018 NALCO COMPANY, USA 5 DATE 1. DRAFT DICTATED ON 02-02-2021 SR.PS 2. DRAFT PLACED BEFORE AUTHOR 04-02-2021 SR.PS 3. DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER JM 4. DRAFT DISCUSSED/APPROVED BY SECOND MEMBER. JM 5. APPROVED DRAFT COMES TO THE SR.PS/PS SR.PS 6. KEPT FOR PRONOUNCEMENT ON SR.PS 7. DATE OF UPLOADING ORDER SR.PS 8. FILE SENT TO THE BENCH CLERK SR.PS 9. DATE ON WHICH FILE GOES TO THE HEAD CLERK 10. DATE ON WHICH FILE GOES TO THE A.R. 11. DATE OF DISPATCH OF ORDER. *