DCIT, CHENNAI V. Kerry Reliable Logistics P Ltd., CHENNAI

ITA 1339/CHNY/2014

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 8139 (ITAT-CHENNAI)
• Duration Of Justice: 2 year(s) 5 month(s) 13 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-10-2016
• Appeal Filed By: Department
• Bench Allotted: D
• Next Hearing Date: 21-09-2016
• Assessment Year: 2009-2010
• Appeal Filed On: 15-05-2014
• Court: TRIBUNAL
• Department Lawyers: R DURAIPANDIAN
• Assessee Lawyers: S SRIDHAR
• Keywords: Deemed to accrue or arise in india; Retrospective amendment; Permanent establishment
• Section: 143(3); 260A

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL D BENCH : CHENNAI , . ! ' , # '$ % [ BEFORE SHRI CHANDRA POOJARI, ACCOUNTANT MEMBER AND SHRI G. PAVAN KUMAR, JUDICIAL MEMBER ] ./ I.T.A.NO. 1339/MDS/2014 / ASSESSMENT YEAR : 2009-10 THE DY. COMMISSIONER OF INCOME-TAX CENTRAL CIRCLE II(4) CHENNAI VS. M/S KERRY RELIABLE LOGISTICS P LTD OLD NO.12, NEW NO.23, JOSIER STREET, THIRUMURTHYNAGAR, NUNGAMBAKKAM, CHENNAI 34 [PAN AAACR 4683 H ] ( &' / APPELLANT) ( ()&' /RESPONDENT) / APPELLANT BY : SHRI R. DURAIPANDIAN, JCI T /RESPONDENT BY : SHRI S. SRIDHAR, ADVOCATE / DATE OF HEARING : 21 - 9 - 2016 ! / DATE OF PRONOUNCEMENT : 28 - 10 - 2016 * / O R D E R PER G. PAVAN KUMAR, JUDICIAL MEMBER : THIS APPEAL OF THE REVENUE IS DIRECTED AGAINST THE ORDER OF THE COMMISSIONER OF INCOME-TAX (APPEALS)-II, CHENN AI, DATED 18.12.2013 IN I.T.A.NO.576/2013-14 PASSED U/S 143( 3) AND 250(6) OF THE INCOME-TAX ACT, 1961 (IN SHORT THE ACT). 2. THE REVENUE HAS RAISED THE FOLLOWING GROUNDS: 1. THE ORDER OF THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) IS CONTRARY TO THE LAW AND FACTS OF THE C ASE. ITA NO. 1339/14 :- 2 -: 2. THE ID CIT(A)ERRED IN DELETING THE DISALLOWANCE U/S.40(A)(I) AMOUNTING TO RS.44.53 LAKHS; 2.1 THE ID CIT(A) OUGHT TO HAVE APPRECIATED THE FAC T THAT ACCORDING TO THE AGREEMENT, THE SERVICES OF M/S. KERRY FREIGH T SERVICES (FAR EAST) P LTD. AS REPRESENTATIVE TO THE ASSESSEE COMP ANY WAS TO EXPLORE THE BUSINESS OPPORTUNITIES AT SINGAPORE IN CONNECTION WITH LOGISTICS, PROCURE ORDER AND CUSTOMER SATISFACTION. THE SERVICES RENDERED BY THE NON RESIDENT COMPANY TO ASSESSEE CO MPANY IS IN THE NATURE OF AGENCY SERVICES; 2.2 THE ID CIT(A) OUGHT TO HAVE APPRECIATED THE FACT THAT ACCORDING TO THE AMENDMENT BY THE FINANCE ACT 2004, I.E., FRO M 01.04.2005, ANY INTEREST, COMMISSION, ROYALTY, FEE FOR TECHNICA L SERVICES OR OTHER SUMS CHARGEABLE UNDER THIS ACT ARE PAYABLE OUTSIDE INDIA OR IN INDIA TO A NON RESIDENT, THEN THE SAID AMOUNT IS LIABLE F OR DEDUCTION OF TAX AT SOURCE. 2.3 THE CIT(A) FAILED TO APPRECIATE THAT ACCORDING TO THE AGREEMENT, FOR PROCURING ORDERS FOR THE ASSESSEE COMPANY, THE SAID NON RESIDENT COMPANY IS FUNCTIONING AT SINGAPORE AS ITS REPRESEN TATIVE AND IT IS ONLY BECAUSE OF THE BUSINESS CONNECTION WITH THE AS SESSEE, THE REPRESENTATIVE WAS RECEIVING THE COMPOSITE PAYMENT INCLUDING THE REIMBURSEMENT OF EXPENSES WHICH IS OTHERWISE KNOWN AS FEE FOR AGENCY SERVICES / COMMISSION. 2.4 HAVING REGARD TO EXPLANATION 4 TO SEC. 9(1)(I) AND EXPLANATION 2 TO SEC. 195(1), INTRODUCED BY THE FINANCE ACT, 2012 , WITH RETROSPECTIVE EFFECT FROM 1.4.1962, THE ACTION OF T HE AO IN MAKING THE DISALLOWANCE U/S 40(A)(I) IS JUSTIFIED. . 2.5 THE ID CIT(A) FAILED TO APPRECIATE THAT THE ASS ESSING OFFICER HAD NO DISCRETION U/S 195 OF THE ACT WITH REGARD TO DED UCTION OF TAX AT SOURCE ON VARIOUS PAYMENTS BEING MADE TO THE PERSON SPECIFIED U/S 195(1) AND IF THE ASSESSEE OR THE RECIPIENT DOES NO T AVAIL THE LEGAL RIGHTS PROVIDED U/S 195(2) & 195(3) RESPECTIVELY REGARDING EXEMPTION FROM TAX DEDUCTION, THE AO CANNOT BE FOUND FAULT WI TH. 2.6 IT IS SUBMITTED THAT THE DECISION OF THE HON'BL E ITAT IN ITA NO. /MDS/2013 DT.11.04.2013 FOR AY 2008-09 IN THE CASE OF M/S FARIDA SHOES PVT LIMITED, RELIED ON BY THE CIT(A), HAS NOT BEEN ACCEPTED BY THE DEPARTMENT AND APPEAL BEFORE THE HON'BLE HIG H COURT HAS BEEN MADE U/S 260A OF THE ACT AND THE APPEAL IS PEN DING. 2.7 THE ID CIT(A) FAILED TO PLACE RELIANCE ON THE D ECISION OF THE APEX COURT IN THE CASE O:F M/S. TRANSMISSION CORPORATION OF ANDHRA PRADESH REPORTED IN 239 ITR 589 I(SC). ITA NO. 1339/14 :- 3 -: 3. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE IS ENGAGED IN THE BUSINESS OF FREIGHT FORWARDING, CARGO HANDLI NG SERVICES AND WAREHOUSING, FILED RETURN OF INCOME ON 20.9.2009 WI TH TOTAL INCOME OF ` 1,54,02,560/- AND THE RETURN OF INCOME WAS PROCESS ED U/S 143(1). SUBSEQUENTLY, THE CASE WAS SELECTED FOR SCRUTINY UN DER CASS AND NOTICE U/S 143(2) WAS ISSUED. IN COMPLIANCE TO THE NOTICE, LD. AR APPEARED AND THE CASE WAS DISCUSSED. THE ASSESSING OFFICER IN THE ASSESSMENT PROCEEDINGS, FOUND THAT THE ASSESSEE HA S CLAIMED OVERSEAS OFFICE SUPPORT FEES OF ` 44,53,530/- WHICH WAS DEBITED TO THE PROFIT & LOSS ACCOUNT UNDER THE HEAD BUSINESS PROM OTION EXPENSES. IT WAS EXPLAINED THAT THE EXPENDITURE WAS INCURRED OUTSIDE THE COUNTRY ON BEHALF OF THE ASSESSEE AND THEY ARE NOT ACCRUED OR ARISEN IN INDIA AND THEREFORE, PROVISIONS OF SEC. 9(1) OF THE ACT A RE NOT APPLICABLE. WHEREAS THE ASSESSING OFFICER ON PERUSING SEC. 40(A )(I) OF THE ACT AMENDED BY FINANCE ACT, 2004 WITH EFFECT FROM 1.4.2 005 FOUND THAT ANY INTEREST, COMMISSION, ROYALTY, FEES FOR TECHNIC AL SERVICES OR OTHER SUMS CHARGEABLE UNDER THIS ACT ARE PAYABLE OUTSIDE INDIA OR IN INDIA TO A NON-RESIDENT, SUCH EXPENDITURE CANNOT BE ALLOWED WITHOUT DEDUCTION OF TAX WHILE COMPUTING THE PROFITS AND GAINS FROM B USINESS. SINCE THIS PAYMENT PERTAIN TO THE NON-RESIDENT IN RESPECT OF T HE SERVICES UTILIZED IN INDIA, SEC. 195 ARE APPLICABLE. THE ASSESSING O FFICER ALSO RELIED ON THE EXPLANATION INSERTED BY THE FINANCE ACT, 2010 W HERE THE INCOME OF ITA NO. 1339/14 :- 4 -: A NON-RESIDENT SHALL BE DEEMED TO ACCRUE OR ARISE IN INDIA UNDER CLAUSE (V) OR CLAUSE (VI) OR CLAUSE(VII) OF SUB-SEC TION (1) OF SEC. 9 SHALL BE INCLUDED IN HIS TOTAL INCOME. HE RELIED ON THE JUDICIAL DECISION AND CONCLUDED THAT THE ENTIRE SUM PAYABLE BY THE ASSESS EE-COMPANY OUTSIDE INDIA IN RESPECT OF THE SERVICES RENDERED T O INDIAN RESIDENT COMPANY IS SUBJECT TO THE PROVISIONS OF SEC. 40(A)( I) AND DISALLOWED THE SUM OF ` 44,53,530/- AND PASSED THE ORDER U/S 143(3) ON 26.12.2011. 4. AGGRIEVED, THE ASSESSEE FILED AN APPEAL BEFORE THE CIT(A). BEFORE THE CIT(A) THE ASSESSEE ARGUED THE GROUNDS AND EXPLAINED THE FACTS AND REITERATED THE SUBMISSIONS MADE DURIN G ASSESSMENT PROCEEDINGS. THE ASSESSEE HAS FILED SUBMISSIONS B Y LETTER DATED 13.12.2013 WHICH THE CIT(A) HAS CONSIDERED IN HIS O RDER AT PAGE 3 & 4. THE CIT(A) CONSIDERED THE FINDINGS OF THE ASSES SING OFFICER AND APPLIED THE PROVISIONS OF SEC. 9(1) OF THE ACT AND SECTION 40(A)(I) OF THE ACT. THE ASSESSEE-COMPANY IS ENGAGED IN THE BUSINESS OF FREIGHT FORWARDING, CARGO HANDLING SERVICES AND WAREHOUSING AND ASSESSEE HAS REIMBURSED THE EXPENSES INCURRED BY M/S KERRY F REIGHT SERVICES (FAR EAST) PTE LTD ON BEHALF OF THE COMPANY. THE R EIMBURSEMENT OF EXPENSES IS TOWARDS RENT FOR USING PART OF THEIR OF FICE SPACE IN SINGAPORE, TRAVELLING EXPENSES AND OTHER ADMINISTRA TIVE EXPENSES. ON PERUSAL OF SEC. 9 OF THE ACT, THE CIT(A) FOUND THAT THE EXPENSES ARE ITA NO. 1339/14 :- 5 -: NOT SPECIFIED IN SEC. 9 OF THE ACT. THE PAYMENTS DO NOT FALL UNDER THE AMBIT OF SEC. 9 AND THE RECIPIENT COMPANY IS A NON- RESIDENT AND HAS NO BUSINESS CONNECTION IN INDIA AND NO PERMANENT ESTAB LISHMENT IN INDIA. THE SERVICES IN RELATION TO REIMBURSEMENT MADE ARE RENDERED TOTALLY OUTSIDE THE COUNTRY. CONSIDERING THESE PROVISIONS AND THE FACTS, THE CIT(A) WAS OF THE OPINION THAT PROVISIONS OF SEC. 4 0(A)(I) ARE NOT APPLICABLE TO THE ASSESSEE-COMPANY. FURTHER HE REL IED ON THE JUDGMENT OF APEX COURT IN GE INDIA TECHNOLOGY CEN. P. LTD VS CIT, 327 ITR 456 AND ALSO THE DECISION OF COORDINATE BEN CH IN THE CASE OF M/S FARIDA SHOES P. LTD IN I.T.A.NO. 159/MDS/2013 D ATED 11.4.2013 FOR ASSESSMENT YEAR 2008-09 WHERE THE TRIBUNAL HAS EXAMINED THE ISSUE OF COMMISSION PAYMENTS TO NON-RESIDENTS FOR P ROCURING EXPORT ORDERS AND CONCLUDED THAT THE COMMISSION PAYMENTS T O THE SAID NON- RESIDENT AGENTS ARE NOT ASSESSABLE TO TAX IN INDIA. ON THE SAME ANALOGY, THE CIT(A) FOUND THAT THE REIMBURSEMENT OF OVERSEAS OFFICE SUPPORT FEES CLAIMED UNDER BUSINESS PROMOTION EXPEN SES TOWARDS OFFICE RENT, TRAVELLING EXPENDITURE ARE NOT TAXABLE IN INDIA AND THEREFORE, THE ASSESSEE-COMPANY IS NOT UNDER ANY OB LIGATION TO DEDUCT THE TDS. SINCE THERE IS NO OBLIGATION ON THE ASSES SEE-COMPANY AND THERE IS NO PERMANENT ESTABLISHMENT OF THE OVERSEAS COMPANY IN INDIA AND THE PROVISIONS OF SEC. 40(A)(I) ARE INAPPLICAB LE. WITH THESE ITA NO. 1339/14 :- 6 -: FINDINGS, THE CIT(A) DELETED THE ADDITION AND ALLOW ED THE APPEAL IN FAVOUR OF THE ASSESSEE. 5. AGGRIEVED BY THE ORDER OF THE CIT(A), THE REVENUE I S IN APPEAL BEFORE THE TRIBUNAL. BEFORE US, THE LD. DR ARGUED THE GROUNDS AND REITERATED THE FINDINGS MADE BY THE CIT(A). TH E LD. DR CONTENDED THAT THE CIT(A) HAS OVERLOOKED THE FACTS THAT THE A SSESSEE-COMPANY IS ENGAGED THE SERVICES OF M/S KERRY FREIGHT SERVICE S (FAR EAST) PTE LTD. FOR EXPLORING THE BUSINESS AT SINGAPORE AND AS PER FINANCE ACT, 2004 THAT FALLS UNDER THE LIMB OF OTHER SUMS PAYABLE OUT SIDE INDIA AND THEREFORE, LIABLE FOR TAX DEDUCTION AT SOURCE. HE FURTHER SUBMITTED THAT THE CIT(A) FAILED TO CONSIDER THE FACTS AND BUSINES S CONNECTION EXISTED BETWEEN ASSESSEE-COMPANY AND SINGAPOREAN COMPANY AN D PROVISIONS OF SEC. 195 ARE APPLICABLE TO THE ASSESSEE-COMPANY. FURTHER, THE DECISION IN THE CASE OF M/S FARIDA SHOES PVT. LTD ( SUPRA) HAS NOT BECOME FINAL AND THE DEPARTMENT HAS FILED AN APPEAL BEFORE THE HIGH COURT AND PRAYED FOR SETTING ASIDE THE ORDER OF THE CIT(A). 6. CONTRA, THE LD. AR RELIED ON THE ORDER OF THE CIT(A ) AND THE JUDICIAL DECISIONS. 7. WE HEARD THE RIVAL SUBMISSIONS, PERUSED THE MATERIA L ON RECORD AND THE JUDICIAL DECISIONS. THE SOLE CRUX O F THE ISSUE IS THAT THE PAYMENTS MADE TO THE NON-RESIDENT COMPANY IN SINGAP ORE ARE LIABLE FOR TDS AND WHETHER THE PROVISIONS OF SEC. 9(1) AND SEC. 195(1) ARE ITA NO. 1339/14 :- 7 -: APPLICABLE. THE LD. ARS CONTENTION THAT THE ASSES SEE-COMPANY HAS CLAIMED THIS EXPENDITURE AS REIMBURSEMENT OF OVERHE ADS WITH RESPECT TO THE RENT, TRAVELLING AND OTHER ADMINISTRATIVE EX PENSES AND THEY ARE IN THE NATURE OF TECHNICAL SERVICES AND THEREFORE, NOT COVERED U/S 9(1) AND 195 OF THE ACT. FURTHER, THE NON-RESIDENT COMP ANY M/S KERRY FREIGHT SERVICES (FAR EAST) PTE. LD DOES NOT HAVE A PERMANENT ESTABLISHMENT IN INDIA, HENCE, THE INCOME IS NOT TA XABLE IN INDIA. THE LD. DRS CONTENTION THAT THERE IS A BUSINESS CONNEC TION EXIST FOR EXPLORING THE BUSINESS OPPORTUNITY IN FOREIGN COUNT RY AND THE ASSESSEE HAS ENGAGED THE NON-RESIDENT COMPANY FOR G LOBAL BUSINESS SERVICES. SINCE THERE EXIST BUSINESS CONNECTION TH E SAID AMOUNT IS TAXABLE IN INDIA. WE HAVE PERUSED THE ASSESSMENT O RDER AND FOUND THAT THE ASSESSING OFFICER HAS DISCUSSED ELABORATEL Y THE PROVISIONS OF SEC. 40(A)(I) AND SEC.195 OF THE ACT BUT NOWHERE T HERE IS A DISCUSSION WHETHER THERE IS PERMANENT ESTABLISHMENT OF SINGAPO RE COMPANY IN INDIA AND ALSO BUSINESS CONNECTIONS. THERE IS NO F INDING BY THE ASSESSING OFFICER NOR BY THE CIT(A) TO CONSIDER THE SUBMISSIONS OF THE ASSESSEE THAT THERE IS NO BUSINESS CONNECTION AND P ERMANENT ESTABLISHMENT IN INDIA AND WHETHER THE AMOUNT IS TA XABLE IN INDIA. CONSIDERING THE APPARENT FACTS AND ALSO THE DECISIO N RELIED ON BY THE CIT(A) IN RESPECT OF FARIDA SHOES PVT. LTD (SUPRA), WE ARE OF THE OPINION THAT THE RECIPIENT IS A NON-RESIDENT COMPAN Y BASED AT ITA NO. 1339/14 :- 8 -: SINGAPORE, THE PAYMENTS ARE NOT SUBJECT TO TDS ON T HE CONDITIONAL BASIS AND THERE IS NO PERMANENT ESTABLISHMENT AND F URTHER THERE IS NO CONFIRMATION ON RECORD OF ABOVE FACTS AND NEITHER O F THE PARTIES COULD ESTABLISH THAT THERE IS NO PERMANENT ESTABLISHMENT IN INDIA AND NO BUSINESS CONNECTION EXIST BUT ONLY SERVICE CONNECTI ON BETWEEN THE ASSESSEE AND NON-RESIDENT. WE FIND THAT THE COORDI NATE BENCH IN THE CASE OF ACIT VS EURO LEDER FASHIONS LTD 156 ITD 208 , HAS HELD AS UNDER: 6. WE HAVE HEARD THE PARTIES AND PERUSED THE RECOR D. AT THE OUTSET, CERTAIN PROVISIONS OF THE ACT NEEDS TO BE LOOKED INTO SECTION 40(A)(I) WHICH READS AS UNDER: 40. NOT WITHSTANDING ............. (A) IN THE CASE OF ANY ASSESSEE (I) ANY INTEREST (NOT BEING INTEREST ON A LOAN ISSU ED FOR PUBLIC SUBSCRIPTION BEFORE THE 1ST DAY OF APRIL, 1938) ROYALT Y, FEES FOR TECHNICAL SERVICES OR OTHER SUM CHARGEABLE UNDER TH IS ACT, WHICH IS PAYABLE A. OUTSIDE INDIA B. IN INDIA TO A NON-RESIDENT, NOT BEING A COMPANY O R A FOREIGN COMPANY, ON WHICH TAX IS DEDUCTIBLE AT SOURCE UNDER CHAPTER V IIB AND SUCH TAX HAS NOT BEEN DEDUCTED OR, AFTER DEDUCTION, HAS NOT BEEN PAID DURING THE PREVIOUS YEAR, OR IN THE SUBSEQUENT YEAR BEFORE THE EXPIRY OF THE TIME PRESCRIBED UNDER SUB-SECTION (1) OF SECTION 200: 7. THE AFORESAID CLAUSE MAKES IT CLEAR THAT THE DISA LLOWANCE SHALL BE MADE IN CASE OF ANY PAYMENT MADE WHICH IS CHARGE ABLE UNDER THIS ACT AND IS PAYABLE OUTSIDE INDIA OR IN INDIA T O A NONRESIDENT NOT BEING A COMPANY OR TO A FOREIGN COMPANY ON WHIC H TAX IS DEDUCTIBLE AT SOURCE. THEREFORE, THE FIRST CONDITIO N REQUIRED TO BE FULFILLED IS THE PAYMENT MUST BE CHARGEABLE UNDE R THE ACT, ITA NO. 1339/14 :- 9 -: THEREAFTER THE QUESTION OF DEDUCTION OF TAX WILL ARI SE. SECTION 195 (1) OF THE ACT ALSO PRESCRIBES THAT TAX HAS TO BE DE DUCTED WHILE MAKING PAYMENT TO NON-RESIDENT WHICH IS CHARGEABLE UNDER THE PROVISIONS OF THE ACT. THEREFORE, THE CONDITION PRE CEDENT FOR DEDUCTION OF TAX IS THE INCOME MUST BE CHARGEABLE UN DER THE PROVISIONS OF THE ACT. IN THE FACTS OF THE PRESENT CASE, THE ASSESSEE HAS NOT PRODUCED THE AGREEMENT ENTERED INT O BY THE ASSESSEE WITH FOREIGN AGENTS TO SHOW THAT THEY WERE APPOINTED TO ACT AS COMMISSION AGENTS OUTSIDE INDIA IN THEIR RES PECTIVE COUNTRIES. THE AO HAS DISALLOWED COMMISSION PAYMENT U/S 40(A)(I) OF THE ACT, SINCE, THERE WAS NO AGREEMENT TO SUGGES T THE PAYMENT OF SALES COMMISSION. 8. AS SEEN FROM THE ORDERS OF THE LOWER AUTHORITI ES, THE ASSESSEE HAS NOT DISCHARGED THE BURDEN CAST UPON IT TO SHOW THE NATURE OF SERVICES RENDERED BY NON-RESIDENT AGENT. IF THERE ARE SERVICES RENDERED BY NON-RESIDENTS, WHO HAVE NO PER MANENT ESTABLISHMENT IN INDIA OR HAVE ANY BUSINESS CONNECT ION IN INDIA, BY VIRTUE OF WHICH THE PAYMENT OF COMMISSION ACCRUED O R AROSE IN INDIA THEN, IT IS EXEMPTED, IF THE ASSESSEE IS ABLE TO PROVE THAT THE SERVICES WERE RENDERED BY THOSE NON-RESIDENTS A T ABROAD. IN THE PRESENT CASE, THE ASSESSEE HAS NOT ESTABLISHED THE FACTS ON RECORD THAT THE NON-RESIDENT HAS RENDERED SERVICES AT ABROAD AND THERE IS NO BUSINESS CONNECTION IN INDIA BY PRODUCI NG RELEVANT RECORDS, VIZ., EITHER AGREEMENT ENTERED INTO BY THE ASSESSEE WITH THEM OR CORRESPONDENCE TOOK BETWEEN THE PARTIES. WI THOUT EXAMINING THESE DETAILS, WE ARE NOT IN A POSITION TO DECIDE THE NATURE OF SERVICES RENDERED BY THE NON-RESIDENT AGE NT. THEREFORE, IT IS APPROPRIATE TO REMIT THE ENTIRE IS SUE BACK TO THE FILE OF THE AO WITH DIRECTION TO THE ASSESSEE TO PR OVE THAT IT WAS SALES COMMISSION TOWARDS PROCUREMENT OF ORDERS FROM ABROAD. ACCORDINGLY, THE ENTIRE ISSUE IS REMITTED BACK TO T HE FILE OF THE AO FOR FRESH CONSIDERATION AND THE AO IS DIRECTED T O MAKE NECESSARY ENQUIRY REGARDING THE NATURE OF SERVICES RENDERED BY THE NON-RESIDENT AGENT AND THE PAYMENTS MADE THEREO F. WITH THESE OBSERVATIONS, THE APPEAL IS ALLOWED FOR STATI STICAL PURPOSES. ITA NO. 1339/14 :- 10 -: 8. RESPECTFULLY FOLLOWING THE ORDER OF THE CO-ORDINATE BENCH, WE ARE OF THE OPINION THAT THE MATTER NEEDS TO BE R E-EXAMINED BY THE ASSESSING OFFICER. WE, THEREFORE, SET ASIDE THE OR DER OF THE CIT(A) AND REMIT THE ISSUE TO THE FILE OF THE ASSESSING OFFIC ER FOR THE LIMITED PURPOSE TO VERIFY WHETHER THE NON-RESIDENT COMPANY HAS ANY PERMANENT ESTABLISHMENT IN INDIA AND ANY BUSINESS CONNECTION EXIST WITH THE NON-RESIDENT COMPANY SO AS TO ATTRACT THE PROVISIONS OF SEC. 40(A)(I) OF THE ACT AND GROUNDS OF THE REVENUE ARE ALLOWED FOR STATISTICAL PURPOSES. 9. IN THE RESULT, THE APPEAL OF THE REVENUE IS ALLOWE D FOR STATISTICAL PURPOSES. ORDER PRONOUNCED ON 28 TH OCTOBER, 2016, AT CHENNAI. SD/- SD/- ( ) (CHANDRA POOJARI) / ACCOUNTANT MEMBER ( . ! ' ) (G. PAVAN KUMAR) # / JUDICIAL MEMBER '# / CHENNAI $% / DATED: 28 TH OCTOBER, 2016 RD %& '()( / COPY TO: 1 . / APPELLANT 4. * / CIT 2. / RESPONDENT 5. (+, - / DR 3. *./ / CIT(A) 6. ,01 / GF