M/S LINK EXPORTERS, V. THE DCIT CIR 2(6),

ITA 1355/MUM/2004

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 100911 (ITAT-MUMBAI)
• Duration Of Justice: 11 year(s) 6 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-09-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: L
• Next Hearing Date: 25-08-2015
• Assessment Year: 1998-1999
• Appeal Filed On: 04-03-2004
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: DR SHRI NARENDRA KUMAR
• Assessee Lawyers: S E DASTURNIRAJ SHETH
• Keywords: Double taxation relief; Retrospective amendment; Permanent establishment; Initiation of penalty proceedings
• Section: 143(3); 234B

Judgement Text

LINKLATERS (FORMERLY LINKLATERS AND PAINES) ITA NO. 1355 /MUM/20 0 4 ALONG WITH 07 GROUP A PPEALS 1 IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH L , MUMBAI BEFORE SHRI AMIT SHUKLA , JUDICIAL MEMBER AND SHRI GOPAL KEDIA , ACCOUNTANT MEMBER ITA NO. : 1355 /MUM/ 2004 (ASSESSMENT YEAR : 1998 - 99) LINKLATERS ( F ORMERLY LINKLATERS AND PAINES ), C/O C C CHOKSHI & CO., PLOT NO. 12, DR. ANNIE BESANT ROAD, OPP. SHIVSAGAR ESTATE, WORLI, MUMBAI - 400 018 .: PAN: AAACR 7832 C VS DY. COMMISSIONER OF INCOME TAX, CIRCLE 2(6), 1 ST FLOOR AAYAKAR BHAVAN, M K MARG, MUMBAI - 400 020 (APPELLANT) (RESPONDENT) APPELLANT BY : S/ SHRI S. E. DASTUR/NIRAJ SHETH RESPONDENT BY : DR. (SHRI) NARENDRA KUMAR ITA NO. : 1712 /MUM/ 2004 (ASSESSMENT YEAR : 1998 - 99) INCOM E TAX OFFICER (IT) - 3(1), GROUND FLOOR, SCINDIA HOUSE, NM RD., BALLARD ESTATE, MUMBAI - 400 038 VS LINKLATERS & PAINES (NOW LINKLATERS) MUMBAI - 400 018 .: PAN: AAACR 7832 C (APPELLANT) (RESPONDENT) A PPELLANT BY : DR. (SHRI) NARENDRA KUMAR RESPONDENT BY : S/ SHRI S. E. DASTUR/NIRAJ SHETH ITA NO. : 1356 /MUM/ 2004 (ASSESSMENT YEAR : 1999 - 2000) LINKLATERS ( FORMERLY LINKLATERS AND PAINES ), C/O C C CHOKSHI & CO., PLOT NO. 12, DR. ANNI E BESANT ROAD, OPP. SHIVSAGAR ESTATE, WORLI, MUMBAI - 400 018 .: PAN: AAACR 7832 C VS DY. COMMISSIONER OF INCOME TAX, CIRCLE 2(6), 1 ST FLOOR AAYAKAR BHAVAN, M K MARG, MUMBAI - 400 020 (APPELLANT) (RESPONDENT) APPELLANT BY : S/ SHRI S. E. DASTUR/NIRAJ SHETH RESPONDENT BY : DR. (SHRI) NARENDRA KUMAR ITA NO. : 1713 /MUM/ 2004 (ASSESSMENT YEAR : 1999 - 2000) INCOME TAX OFFICER (IT) - 3(1), GROUND FLOOR, SCINDIA HOUSE, NM RD., BALLARD ESTATE, MUMBAI - 400 038 VS LINKLATERS & PAINES (NOW LINKLATERS) MUMBAI - 400 018 .: PAN: AAACR 7832 C (APPELLANT) (RESPONDENT) APPELLANT BY : DR. (SHRI) NARENDRA KUMAR RESPONDENT BY : S/ SHRI S. E. DASTUR/NIRAJ SHETH LINKLATERS (FORMERLY LINKLATERS AND PAINES) ITA NO. 1355 /MUM/20 0 4 ALONG WITH 07 GROUP A PPEALS 2 ITA NO. : 1357 /MUM/ 2004 (ASSESSMENT YE AR : 2000 - 01) LINKLATERS ( FORMERLY LINKLATERS AND PAINES ), C/O C C CHOKSHI & CO., PLOT NO. 12, DR. ANNIE BESANT ROAD, OPP. SHIVSAGAR ESTATE, WORLI, MUMBAI - 400 018 .: PAN: AAACR 7832 C VS INCOME TAX OFFICER (IT) - 1(2), 1 ST FLOOR AAYAKAR BHAVAN , M K MARG, MUMBAI - 400 020 (APPELLANT) (RESPONDENT) APPELLANT BY : S/ SHRI S. E. DASTUR/NIRAJ SHETH RESPONDENT BY : DR. (SHRI) NARENDRA KUMAR ITA NO. : 1714 /MUM/ 2004 (ASSESSMENT YEAR : 2 000 - 01) INCOME TAX OFFICER (IT) - 3(1), GROUND FLOOR, SCINDIA HOUSE, NM RD., BALLARD ESTATE, MUMBAI - 400 038 VS LINKLATERS & PAINES (NOW LINKLATERS) MUMBAI - 400 018 .: PAN: AAACR 7832 C (APPELLANT) (RESPONDENT) APPELLANT BY : DR. (SHRI) NARENDRA KUMAR RESPONDENT BY : S/ SHRI S. E. DASTUR/NIRAJ SHETH ITA NO. : 2812 /MUM/ 2005 (ASSESSMENT YEAR : 2001 - 02) LINKLATERS , C/O C C CHOKSHI & CO., PLOT NO. 12, DR. ANNIE BESANT ROAD, OPP. S HIVSAGAR ESTATE, WORLI, MUMBAI - 400 018 .: PAN: AAACR 7832 C VS INCOME TAX OFFICER (IT) - 3(1), SCINDIA HOUSE, NM RD., BALLARD ESTATE, MUMBAI - 400 038 (APPELLANT) (RESPONDENT) APPELLANT BY : S/ SHRI S. E. DASTUR/NIRAJ SHETH RESPONDENT BY : DR. (SHRI) NARENDRA KUMAR ITA NO. : 3596 /MUM/ 2005 (ASSESSMENT YEAR : 2001 - 02) ADIT (IT) - 3(2), R.NO. 132, 1 ST FLOOR, NM R OA D., MUMBAI - 400 038 VS M/S LINKLATERS ( FORMERLY KNOWN AS LINKLATERS & PAINES ) , MUMBAI - 400 018 .: PAN: AAACR 7832 C (APPELLANT) (RESPONDENT) APPELLANT BY : DR. (SHRI) NARENDRA KUMAR RESPONDENT BY : S/ SHRI S. E. DASTUR/NIRAJ SHETH /DATE OF HEARING : 26 - 0 8 - 201 5 / DATE OF PRONOUNCEMENT : 07 - 09 - 201 5 LINKLATERS (FORMERLY LINKLATERS AND PAINES) ITA NO. 1355 /MUM/20 0 4 ALONG WITH 07 GROUP A PPEALS 3 ORDER , . . : PER AMIT SHUKLA, AM : THE A FORESAID APPEALS HA VE BEEN FILED BY THE ASSESSEE AS WELL AS BY THE REVENUE AGAINST SEPARATE IMPUGNED ORDER S PASSED BY CIT(A ) - XXXIII, MUMBAI FOR THE QUANTUM OF ASSESSMENT PASSED U/S 143(3) FOR THE ASSESSMENT YEAR S 1998 - 99, 1999 - 00, 2000 - 01 & 2001 - 02 RESPECTIVELY. SINCE THE ISSUES INVOLVED IN ALL THE APPEALS ARE COMMON ARISING OUT OF IDENTICAL SET OF FACTS THEREFORE, SAME WERE H EAR D TOGETHER AND ARE BEING DISPOSED OFF BY WAY OF THIS CONSOLIDATED ORDER . 2. F OR SAKE OF CONVENIENCE AND UNDERSTANDING THE ISSUES INVOLVED WE WILL TAKE - UP ASSESSEES APPEAL FOR THE ASSESSMENT YEAR 1998 - 99 BEING ITA NO. 1355/MUM/2004 VIDE WHICH, FOLLOWI NG GROUNDS HAVE BEEN RAISED : - 1. THE LEARNED COMMISSIONER (APPEALS) OUGHT TO HAVE DIRECTED THE ASSESSING OFFICER TO DETERMINE THE TOTAL INCOME OF THE APPELLANT AT RS. NIL AS RETURNED BY THE APPELLANT. 2. THE LEARNED COMMISSIONER (APPEALS) ERRED IN HO LDING THAT THE APPELLANT HAD A PERMANENT ESTABLISHMENT IN INDIA UNDER ARTICLE 5(2)(K) OF THE TAX TREATY BETWEEN INDIA AND U.K. THE LEARNED COMMISSIONER (APPEALS) OUGHT TO HAVE APPRECIATED THAT THE APPELLANT HAD NO PERMANENT ESTABLISHMENT IN INDIA. 3. WITH OUT PREJUDICE TO THE ABOVE, THE LEARNED COMMISSIONER (APPEALS) ERRED IN NOT DIRECTING THE ASSESSING OFFICER TO ACCEPT THE COMPUTATION PROVIDED BY THE APPELLANT IN THE INCOME AND EXPENDITURE ACCOUNT AS BEING THE INCOME ATTRIBUTABLE TO THE PERMANENT ESTABLIS HMENT. THE LEARNED COMMISSIONER (APPEALS) OUGHT TO HAVE DIRECTED THE ASSESSING OFFICER TO ADOPT THE GROSS INCOME AT 522,994, DEDUCTION FOR DIRECT EXPENDITURE AT 522,994, DEDUCTION FOR DIRECT LINKLATERS (FORMERLY LINKLATERS AND PAINES) ITA NO. 1355 /MUM/20 0 4 ALONG WITH 07 GROUP A PPEALS 4 EXPENDITURE AT 362,501, DEDUCTION FOR OVERHEADS AT 26,159 AND NET PROFIT AT 134,334. 4. WITHOUT PREJUDICE TO THE ABOVE, COMMISSIONER (APPEALS) ERRED IN NOT DIRECTING THE ASSESSING OFFICER TO COMPUTE THE TOTAL INCOME AT THE NUMBER OF HOURS CHARGED AT APPROPRIATE RATES FOR AN INDIAN LAWYER VIZ. 125 PER HOUR F OR A PARTNER AND 87.50 PER HOUR FOR AN ASSISTANT. 5. THE LEARNED COMMISSIONER (APPEALS) ERRED IN UPHOLDING THE ACTION OF THE ASSESSING OFFICER IN CONSIDERING THE REIMBURSEMENT OF EXPENDITURE OF POUNDS STERLING 8,93,570.97 AS PART OF INCOME OF THE APPELL ANT AND AS LIABLE TO TAX IN INDIA. 6. THE LEARNED COMMISSIONER (APPEALS) ERRED IN CONFIRMING THE DISALLOWANCE OF DISBURSEMENTS TO THE EXTENT OF 25% OF THE DISBURSEMENT CLAIM PROPORTIONATE TO THE FEE RELATING TO SERVICES RENDERED IN INDIA AS COMPARED TO TH E TOTAL FEES. THE COMMISSIONER (APPEALS) OUGHT TO HAVE DIRECTED THE ASSESSING OFFICER TO ALLOW DEDUCTION FOR THE ENTIRE AMOUNT OF THE DISBURSEMENTS. 7. THE LEARNED COMMISSIONER (APPEALS) ERRED IN DISMISSING THE FOLLOWING GROUND IN APPEAL AS INFRUCTUOUS: 8. THE LEARNED DEPUTY COMMISSIONER ERRED IN NOT ALLOWING DEDUCTION FOR REMUNERATION PAID BY THE APPELLANT TO ITS EMPLOYEES FOR SERVICES PERFORMED OUTSIDE INDIA. 8. THE LEARNED COMMISSIONER (APPEALS) ERRED IN REJECTING THE FOLLOWING GROUNDS IN APPEAL : 9. WITHOUT PREJUDICE TO GROUND NO. 2 TO 5 ABOVE, THE DEPUTY COMMISSIONER OUGHT TO HAVE ASSESSED TO TAX ONLY IN RESPECT OF FEES OF POUNDS STERLING 139,924.64, BEING THE AMOUNT ASSESSABLE UNDER THE INCOME - TAX ACT. 10. THE LEARNED DEPUTY COMMISSIONER ERRED IN NOT EXAMINING THE PROVISIONS OF THE INCOME - TAX ACT, TO DETERMINE IF THE SAME WERE BENEFICIAL TO THE APPELLANT. 11. THE LEARNED DEPUTY COMMISSIONER ERRED IN NOT CONSIDERING THE SUBMISSIONS MADE BY THE APPELLANT VIDE LETTER DATED LINKLATERS (FORMERLY LINKLATERS AND PAINES) ITA NO. 1355 /MUM/20 0 4 ALONG WITH 07 GROUP A PPEALS 5 MARCH 27, 2001 REGARDING THE POSITION UNDER THE INCOME - TAX ACT. 9. THE LEARNED COMMISSIONER (APPEALS) ERRED IN NOT DIRECTING THE ASSESSING OFFICER ALTERNATIVELY TO ASSESS TO TAX ONLY THE FEES OF POUNDS STERLING 139,924.64, BEING THE AMOUNT ASSESSABLE UNDER THE INCOME - TAX ACT. 3. AT THE OUTSET SET LD. SENIOR COUNSEL, SHRI S. E. DASTUR SUBMITTED THAT MOST OF THE ISSUES RAISED IN THE AFORESAID GROUNDS ARE EITHER COVERED BY THE EARLIER ORDERS OF THE TRIBUNAL OR HAVE BEEN RENDERED ACADEMIC IN LIGHT OF SUCH ORDERS. IN SUPPORT, HE FILED A DETAILED CHART OF THE ISSUES RAISED AND HOW THEY ARE COVERED BY THE ORDERS OF THE TRIBUNAL. LD. DR ALSO AD MITTED THAT ALL THE GROUNDS RAISED ARE COVERED. 4. THE ASSESSEE IS A PARTNERSHIP FIRM IN UNITED KINGDOM, WHICH IS MAINLY ENGAGED IN THE PRACT ICE OF LAW AND PROVIDING PROFESSIONAL SERVICES IN VARIOUS FIELD TO THE CLIENTS ALL OVER THE WORLD. ITS PROFESSIONAL OPERATIONS EXTEND TO INDIA ALSO, WHICH SERVICES ARE PROVIDED BY THE P ARTNERS AND STAFF S IN UK. WE WILL NOW TAKE - UP GROUND WISE ISSUE, AS RA ISED BY THE ASSESSEE . 5. IN GROUND NO. 2, THE ASSESSEE HAS CHALLENGED THE ISSUE OF PERMANENT ESTABLISHMENT IN INDIA UNDER ARTICLE 5(2)(K) OF INDIA UK DTAA. 6. AS STATED ABOVE, THE ASSESSEE IS PROVIDING LEGAL SERVICES IN VARIOUS AREAS AND DURING THE RELEV ANT PREVIOUS YEAR, THE ASSESSEE HAD RENDERED LEGAL CONSULTANCY SERVICES IN CONNECTION WITH THE DIFFERENT PROJECTS TO VARIOUS CONCERNS BOTH WITHIN AND OUTSIDE INDIA. THE DETAILS OF THE DIFFERENT PROJECTS FOR WHICH SOME PART OF THE WORK WERE PERFORMED IN IND IA, FOR WHICH INVOICES WERE RAISED HAVE BEEN INCORPORATED AT PAGES 2 & 3 OF THE IMPUGNED ASSESSMENT ORDER. ASSESSEES CASE BEFORE THE REVENUE AUTHORITIES LINKLATERS (FORMERLY LINKLATERS AND PAINES) ITA NO. 1355 /MUM/20 0 4 ALONG WITH 07 GROUP A PPEALS 6 HAD BEEN THAT , IT HAD NOT OPENED ANY BRANCH OR OFFICE IN INDIA AND NEITHER IT HAS ANY OFFICE OR PLACE OF WORK IN INDIA FOR RENDERING THE SERVICES. ALL THE LEGAL SERVICES ARE PROVIDED BY THE P ARTNERS AND STAFF IN UK AND THE EXPENSES OF TRAVEL , STAY AT HOTELS AND OTHER LOCATIONS AND OTHER INCIDENTAL EXPENSES WERE BORNE BY THE CLIENTS. THUS, THERE IS NO PERMA NENT ESTABLISHMENT OF THE ASSESSEE IN INDIA WITHIN THE AMBIT OF ARTICLE 5 OF THE DTAA BET W EEN INDIA AND UK. NOT EVEN WITHIN THE MEANING OF ARTICLE 5(2)(K) DOES THE ASSESSEE HAS ANY SERVI CE PE, BECAUSE THE PARTNERS AND STAFF OF THE ASSESSEE WHO HAVE PERFORM ED SERVICES IN INDIA HAVE NOT EXCEEDED THE STAY OF 90 DAYS. THE ASSESSEES SUBMISSION IN THIS REGARD BEFORE THE ASSESSING OFFICER HA VE BEEN INCORPORATED BY THE ASSESSING OFFICER FROM PAGES 3 TO 5 OF THE ASSESSME N T ORDER. HOWEVER, THE ASSESSING OFFICER, HEL D THAT ASSESSEE HAS SERVI C E PE IN INDIA AND COMPUTED THE INCOME OF THE ASSESSEE IN ACCORDANCE WITH ARTICLE 7 AS PER THE DISCUSSION APPEARING AT PAGES 10 TO 12 OF THE ASSESSMENT ORDER. 7. THE LD. CIT(A) FOLLOWING THE EARLIER YEAR ORDER S OF THE CIT(A), DE CIDED THIS ISSUE AGAINST THE ASSESSEE. 8. BEFORE US, SHRI DASTUR POINTED OUT THAT THIS MATTER HAS BEEN DECIDED AGAINST ASSESSEE BY THE TRIBUNAL IN ASSESSMENT YEAR 1995 - 96 , VIDE ORDER DATED 16 TH JULY, 2010, ( REPORTED IN 130 TTJ 20 ) . THIS ORDER HAS AGAIN BE EN FOLLOWED BY THE TRIBUNAL IN A Y S 1996 - 97 & 1997 - 98. THE FIN DING OF THE TRIBUNAL IN AY 1995 - 96 ARE GIVEN IN PARA 86 TO 107 AND FINAL CONCLUSION ARE IN PARA 106 & 107 WHICH FOR SAKE OF READY REFERENCE IS REPRODUCED HEREUNDER : - 106 . WE ARE IN CONSIDERED AGREEMENT WITH THIS ANALYSIS IN THE UN MODEL CONVENTION COMMENTARY. WE ARE THUS OF THE CONSIDERED VIEW THAT, IN A SITUATION LIKE THE ONE THAT WE ARE IN SEISIN OF, I.E. IN WHICH SPECIFIC PROVISIONS FOR PROFESSIONAL SERVICES OR INDEPENDENT PERSONAL SERVICES OR INCLUDED SERVICES LINKLATERS (FORMERLY LINKLATERS AND PAINES) ITA NO. 1355 /MUM/20 0 4 ALONG WITH 07 GROUP A PPEALS 7 EXIST UNDER ART. 15, WHEN SERVICES ARE RENDERED BY THE ENTERPRISE, ART. 5(2)(K) WILL COME INTO PLAY, AND WHEN SERVICES ARE RENDERED BY AN INDIVIDUAL, ART. 15 WILL FIND APPLICATION. THEREFORE, WHILE WE AGREE WITH THE LEARNED COUNSEL THA T ART. 15 WILL NOT BE APPLICABLE ON THE FACTS OF THE PRESENT CASE, THIS FINDING DOES NOT REALLY COME TO THE RESCUE OF THE ASSESSEE SINCE, AS WE HAVE ALREADY HELD, THE ASSESSEE DID HAVE A PE IN INDIA UNDER ART. 5(2)(K) OF THE INDIA - UK TAX TREATY, AND, ACCOR DINGLY, PROFITS ATTRIBUTABLE TO THE PE ARE TAXABLE UNDER ART. 7 OF THE INDIA - UK TAX TREATY. 107 . IN VIEW OF THE ABOVE DISCUSSIONS, WE ARE UNABLE TO UPHOLD THE PLEA SO STRENUOUSLY ARGUED BY THE LEARNED COUNSEL FOR THE ASSESSEE, AND WE HOLD THAT THE AUTHO RITIES BELOW HAVE RIGHTLY INVOKED THE PROVISIONS OF ART. 5(2)(K). WE APPROVE THE SAME, AND DECLINE TO INTERFERE IN THE MATTER. ON ADJUSTMENTS REQUIRED CLAIMED BY THE ASSESSEE IN EARNINGS OF THE PE, ON THE BASIS OF PREVAILING MARKET PRICES OF SIMILAR SERVIC ES, IN VIEW OF INDEPENDENCE FICTION OF ART. 7(2). 9 . THUS, RESPECTFULLY FOLLOWING THE EARLIER YEARS ORDERS AND THE JUDICIAL PRECEDENCE , WHICH IS APPLICABLE ON THE FACTS PERMEATING IN THIS YEAR , ALSO WE DECIDE TH E IMPUGNED ISSUE AGAINST THE ASSESSEE. AC CORDINGLY, GROUND NO. 2 ST A NDS DISMISSED. 10 . REGARDING GROUND NO. 3 & 4, IT HAS BEEN ADMI TTED BY THE LD. SENIOR COUNSEL, THAT TH I S ISSUE TOO HAS BEEN DECIDED AGAINST THE ASSESSEE BY THE TRIBUNAL IN ASSESSMENT YEAR 1995 - 96, WHICH HAS BEEN FOLLOWED IN A Y S 1996 - 97 & 1997 - 98. THUS , RESPECTFULLY FOLLOWING ORDERS OF THE TRIBUNAL IN EARLIER YEARS, GROUND NO. 3 & 4 OF THE IMPUGNED APPEAL ARE DECIDED AGAINST THE ASSESSEE. THE RELEVANT OBSERVATION A N D FINDING GIVEN BY THE TRIBUNAL IN AY 1995 - 96 HAVE BEEN GIVEN V I DE PARA 111 TO 130 . I N THE AY 1996 - 97, THE TRIBUNAL HAS SUMMARIZED THIS ISSUE IN FOLLOWING MANNER: LINKLATERS (FORMERLY LINKLATERS AND PAINES) ITA NO. 1355 /MUM/20 0 4 ALONG WITH 07 GROUP A PPEALS 8 4. APROPOS GROUND NO.3 & 4, IT WAS SUBMITTED THAT THESE ISSUES ARE ALSO COVERED BY THE AFOREMENTIONED DECISION OF THE TRIBUNAL AGAINST THE ASSESSEE. THE ISSU E RAISED IN THESE GROUNDS HAS BEEN EXPLAINED IN PARA 108 OF THE AFOREMENTIONED ORDER OF THE TRIBUNAL , WHEREIN REFERRING TO TEST OF ARTICLE 7(2) OF INDIA UK TREATY IT WAS ARGUED BEFORE THE TRIBUNAL THAT P ROFITS OF THE P.E ARE DEEMED TO BE THE PROFITS WHICH ' THAT PERMANENT ESTABLISHMENT MIGHT BE EXPECTED TO MAKE IF IT WERE DISTINCT AND SEPARATE ENTERPRISE ENGAGED IN THE SAME OR SIMILAR ACTIVITIES UNDER THE SAME OR SIMILAR CONDITIONS AND DEALING WHOLLY AND INDEPENDENTLY WITH THE ENTERPRISE OF WHICH IT IS A PERMANENT ESTABLISHMENT' THUS, IT WAS POINTED OUT THAT THE PROFITS ATTRIBUTABLE TO THE PERMANENT ESTABLISHMENT ARE NOT THE ACTUAL PROFITS TO THE PERMANENT ESTABLISHMENT BUT HYPOTHETICAL PROFITS WHICH PERMA NENT ESTABLISHMENT WAS EXPECTED TO MAKE IF PERMANENT ESTABLISHMENT WAS WHOLLY INDEPENDENT OF THE GENERAL ENTERPRISE OF WHICH IT IS P.E. IT WAS ARGUED THAT SUCH EXERCISE OF COMPUTING HYPOTHETICAL PROFITS ALSO WARRANTS ADJUSTMENT IN THE BILLS RAISED BY THE G ENERAL ENTERPRISE, IN RESPECT OF WORK CARRIED OUT BY THE P.E AS PREVALENT MARKET PRICE OF SIMILAR SERVICES AS WERE RENDERED BY THE PERMANENT ESTABLISHMENT WERE LOWER THAN THE RATES CHARGED BY GENERAL ENTERPRISES TO ITS CLIENTS. IT WAS CONTENDED THAT FOR TH E PURPOSE OF COMPUTING INCOME OF THE P.E THE VALUE OF SERVICES RENDERED BY THE PE IS TO BE TAKEN AT MARKET VALUE OF SUCH SERVICES IN INDIA AND NOT THE PRICE AT WHICH PERMANENT ESTABLISHMENT SHOULD BE TAKEN @ UK POUNDS 100 PER HOUR FOR THE PARTNERS AND UK P OUNDS 75 FOR ASSISTANCE, WHICH AT BEST IS THE MARKET PRICE OF SUCH SERVICES RENDERED IN INDIA. IT WAS SUBMITTED THAT WHEN PROFITS ATTRIBUTABLE TO P.E . IN INDIA ARE TO BE COMPUTED, ONE HAS TO TAKE INTO ACCOUNT THE REVENUE THAT THE P.E IN INDIA WOULD HAVE EA RNED, FOR RENDERING THESE SERVICES AND PREVALENT MARKET LINKLATERS (FORMERLY LINKLATERS AND PAINES) ITA NO. 1355 /MUM/20 0 4 ALONG WITH 07 GROUP A PPEALS 9 RATES IN INDIA. THESE ISSUES WERE DECIDED AGAINST THE ASSESSEE AND THUS, IT WAS SUBMITTED BY LD. AR THAT THE ISSUES RAISED IN GROUND NO.3 & 4 ARE ALSO COVERED AGAINST THE ASSESSEE BY THE AFOREMENTIONE D DECISION. FOR THE SAKE OF COMPLETENESS THE CONCLUSION OF THE TRIBUNAL AS FOUND IN PARA 130 IS REPRODUCED BELOW: '130. IN VIEW OF THE ABOVE DISCUSSIONS, IN OUR CONSIDERED VIEW, THE VERY PLEA OF THE ASSESSEE PROCEEDS ON FALLACY THAT ARM'S LENGTH PRICE ADJU STMENT CAN BE MADE IN RESPECT OF THE TRANSACTIONS WITH THE CLIENTS OF THE ASSESSEE. THE REVENUES EARNED BY THE ASSESSEE ARE TO BE TAKEN AT ACTUAL FIGURES AND NO ADJUSTMENTS ARE PERMISSIBLE IN THE SAME. WE REJECT THIS PLEA OF THE ASSESSEE AS WELL. THE ACTIO N OF THE AUTHORITIES BELOW IS CONFIRMED ON THIS COUNT AS WELL.' 4.1 ACCORDINGLY, AFTER HEARING BOTH THE PARTIES, GROUND NO. 3 & 4 ARE DECIDED AGAINST THE ASSESSEE AND ARE DISMISSED. 1 1 . ACCORDINGLY , GROUND NO. 3 & 4 RAISED BY THE ASSESSEE ARE TREATED AS D ISMISSED. 1 2 . AS REGARDS THE ISSUES RAISED IN GROUND NO. 5 & 6 TO REIMBURSEMENT OF EXPENSES WHICH HAS BEEN CONSIDERED AS INCOME, BY THE REVENUE AUTHORITIES, IT HAS BEEN SUB MITTED BY THE LD. SENIOR COUNSEL THAT , THIS ISSUE HAS BEEN DECIDED IN FAVOUR OF THE ASSESSEE FROM THE A Y S 199 5 - 9 6 TO 1997 - 98, THE RELEVANT OBSERVATION BY THE TRIBUNAL IN AY 1995 - 96 ARE AS UNDER : - 13 3. HAVING HEARD THE RIVAL SUBMISSIONS AND HAVING PERUSED THE MATERIAL ON RECORD, WE ARE INCLINED TO UPHOLD THE GRIEVANCE OF THE ASSESS EE. THE REIMBURSEMENTS RECEIVED BY THE ASSESSEE ARE IN RESPECT OF SPECIFIC AND ACTUAL EXPENSES INCURRED BY THE ASSESSEE AND DO NOT INVOLVE ANY MARKUP, THERE IS REASONABLE CONTROL MECHANISM IN PLACE TO ENSURE THAT THESE CLAIMS ARE NOT INFLATED, AND THE ASSE SSEE HAS FURNISHED LINKLATERS (FORMERLY LINKLATERS AND PAINES) ITA NO. 1355 /MUM/20 0 4 ALONG WITH 07 GROUP A PPEALS 10 SUFFICIENT EVIDENCE TO DEMONSTRATE THE INCURRING OF EXPENSES. THERE IS THUS NO GOOD REASON TO MAKE ANY ADDITION TO INCOME IN RESPECT OF THESE REIMBURSEMENTS OF EXPENSES. THE ACTION OF THE CIT(A), AS LEARNED COUNSEL RIGHTLY CONTENDS, ON P URE SURMISES AND CONJECTURES. IN VIEW OF THE ABOVE DISCUSSIONS, WE DIRECT THE AO DELETE THE DISALLOWANCE OF EXPENSES AS SUSTAINED BY THE CIT(A) AND HOLD THAT NO PART OF REIMBURSEMENTS OF EXPENSES RECEIVED BY THE ASSESSEE, ON THE FACTS OF THIS CASE, BE TREA TED AS INCOME OF THE ASSESSEE. THE ASSESSEE GETS THE RELIEF ACCORDINGLY. ON QUASHING THE INITIATION OF PENALTY PROCEEDINGS . 1 3 . THUS, RESPECTFULLY FOLLOWING THE SAME, WE ALLOW TH E SE GROUNDS IN FAVOUR OF THE ASSESSEE AND AGAINST THE REVENUE THAT THE ENTIR E REIMBURSEMENT OF EXPENSES HERE IN THE FACTS OF THE ASSESSEES CASE CANNOT BE TREATED AS INCOME. 1 4 . SO FAR AS ISSUES RAISED IN GROUND NO. 7, 8 & 9, THE LD. SENIOR COUNSEL FOR THE ASSESSEE SUBMITTED THAT , AS OF NOW , THE ISSUES RAISED IN THESE GROUNDS HAV E BECOME PURELY ACADEMIC . A CCORDINGLY, GROUND NO. 7, 8 & 9 ARE TREATED AS INFRUCTUOUS, BEING PURELY ACADEMIC IN VIEW O F THE ISSUE S DECIDED IN THE FOREGOING GROUNDS. 1 5 . GROUND NO. 10 HAS NOT BEEN PRESSED, THEREFORE, THE SAME IS DISMISSED AS NOT PRESSED. 1 6 . GROUND NO. 11 RELATES TO INITIATION OF PENALTY PROCEEDINGS U/S 271(1)(C) WHICH IS PREMATURE. ACCORDINGLY, THE APPEAL OF THE ASSESSEE FOR AY 1998 - 99 IS TREATED AS PARTLY ALLOWED. LINKLATERS (FORMERLY LINKLATERS AND PAINES) ITA NO. 1355 /MUM/20 0 4 ALONG WITH 07 GROUP A PPEALS 11 ITA NO. 1 712 /MUM/2004 : AY 1998 - 99 : REVENUE S APPEAL : 1 7 . NOW WE WI LL TAKE - UP REVENUES APPEAL FOR ASSESSMENT YEAR 1998 - 99, BEING ITA NO.1712/MUM/2004 VIDE WHICH FOLLOWING GROUNDS HAVE BEEN RAISED : - 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A) WAS NOT JUSTIFIED IN HOLDING THAT THE AS SESSEE WAS TAXABLE IN RESPECT OF ONLY THAT PORTION OF INCOME THAT WAS RELATED TO THE SERVICES PERFORMED IN INDIA. THE LD. CIT(A) HAS NOT APPRECIATED THE FORCE OF ATTRACTION PRINCIPLE IN ARTICLE 7 OF THE INDO - UK DTAA. 2. ON THE FACTS AND IN THE CIRCUMS TANCES OF THE CASE AND IN LAW, THE LD. CIT(A) HAS ERRED IN HOLDING THAT INTEREST U/S 234B OF THE I.T. ACT, 1961 WAS NOT CHARGEABLE IN THE CASE OF THE ASSESSEE ON THE GROUND THAT IN THE CASE OF A NON RESIDENT ASSESSEE, ALL SUMS CHARGEABLE TO TAX ARE LIABLE TO DEDUCTION OF TAX AT SOURCE UNDER SECTION 195 OF THE INCOME - TAX ACT. 1961. 3. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A) WAS NOT JUSTIFIED IN GIVING RELIEF IN RESPECT OF THE DISBURSEMENT PARTICULARLY WHEN COMPLETE DET AILS WERE NOT PRODUCED BY THE ASSESSEE. 4. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A) WAS NOT JUSTIFIED IN DIRECTING THE AO TO EXCLUDE THE RECEIPT FROM THE SERUM INSTITUTE OF INDIA LIMITED. THE LD. CIT(A) HAS NOT APPREC IATE THE FORCE OF ATTRACTION PRINCIPLE IN ARTICLE 7 OF THE INDO - UK DTAA. 5. WITH PREJUDICE TO THE ABOVE, THE LD. CIT(A) SHOULD HAVE DENIED BENEFIT OF THE INDO - UK DTAA AS THE ASSESSEE IS A PARTNERSHIP FIRM IN THE UK WHERE IT IS NOT TAXED. HENCE IT IS NO T A RESIDENT OF UK UNDER THE SAID DTAA. THE ENTIRE INCOME LINKLATERS (FORMERLY LINKLATERS AND PAINES) ITA NO. 1355 /MUM/20 0 4 ALONG WITH 07 GROUP A PPEALS 12 WOULD BE, THUS, LIABLE TO TAXATION AS PER THE INCOME - TAX ACT, 1961 ALONE. 18 AT THE OUTSET, THE LD. SENIOR COUNSEL SHRI DASTUR, SUBMITTED THAT ALL THE GROUNDS RAISED BY THE REVENUE HAVE BEEN DECID ED IN FAVOUR OF THE ASSESSEE AND AGAINST THE REVENUE BY THE TRIBUNAL IN ASSESSEES OWN CASE IN THE EARLIER YEARS, WHICH FACT HAS ALSO BEEN ADMITTED BY THE LD. DR. 1 9 . IN GROUND NO. 1, THE REVENUE HAS CHALLENGED THE TAXABILITY OF INCOME RELATED TO WORK PE RFORMED IN INDIA. ASSESSING OFFICER HAS TAKEN A VIEW THAT EVEN WHERE ONLY PART OF SERVICES WERE PERFORMED IN INDIA , ENTIRE INCOME WAS TAXABLE IN INDIA. WHEREAS, THE LD. CIT(A) HAS HELD THAT ONLY INCOME IN RESPECT OF SERVICES RENDERED IN INDIA WHICH ARE ATT RIBUTABLE TO THE PE ONLY THAT INCOME WOULD BE TAXABLE IN INDIA. THE TRIBUNAL THOUGH IN AY 1995 - 96 HAD DECIDED TH IS ISSUE AGAINST THE ASSESSEE AFTER INVOKING THE PRINCIPLE OF FORCE OF ATTRACTION , HOWEVER, LATER ON, THE SPECIAL BENCH OF THE TRIBUNAL IN THE CASE OF ADIT VS CLIFFORD CHANCE REPORTED IN [2013] , (143 ITD 1) HAS DECIDED THE ISSUE IN FAVOUR OF THE ASSESSEE AND A GAI N ST THE REVENUE , WHEREBY THE SPECIFIC FINDING OF THE TRIBUNAL ON THIS ISSUE HAS BEEN REVERSED. ACCORDINGLY, FOLLOWING THE BINDING PRECE DENCE OF SPECIAL BENCH IN THE CASE OF AD IT VS CLIFFORD CHANCE ( SUPRA ) . W E HO L D THAT THE PROFITS, WHICH ARE ATTRIBUTABLE TO THE PE CAN ONLY BE ASSESSED IN INDIA AND THUS GROUND NO.1 RAISED BY THE REVENUE STANDS DISMISSED. 20 . REGARDING GROUND NO. 2, MR. DA STUR, POINTED OUT THAT THIS ISSUE HAS BEEN DECIDED IN FAVOUR OF THE ASSESSEE RIGHT FROM ASSESSMENT YEAR 1995 - 96 TO 1997 - 98 BY THE TRIBUNAL, FOLLOWING THE DECISION OF HONBLE JURISDICTIONAL HIGH COURT IN THE CASE OF DIT VS NGC NETWORKS LLC, REPORTED IN 313 ITR 87. HE FURTHER POINTED OUT THAT THE HIGH COURT IN THE CASE OF THE ASSESSEE ITSELF HAS ALSO DISMISSED THE REVENUES APPEAL ON THIS ISSUE AND HENCE THE ISSUE LINKLATERS (FORMERLY LINKLATERS AND PAINES) ITA NO. 1355 /MUM/20 0 4 ALONG WITH 07 GROUP A PPEALS 13 OF CHARGEABILITY OF INTEREST U/S 234B HAS ATTAINED FINALITY IN THE CASE OF THE ASSESSEE. ACCORDI NGLY, WE ALSO FOLLOWING THE BINDING PRECEDENCE , DIREC T THE ASSESSING OFFICER TO DELETE THE INTEREST CHARGED U/S 234B. 21 . AS REGARDS ISSUE RAISED IN GROUND NO. 3, THAT IS, RESTRICTING THE DISALLOWANCE OF REIMBURSEMENT TO THE EXTENT OF 25% AS AGAINST 100%, IT HAS BEEN POINTED BY LD. SENIOR COUNSE L THAT THE TRIBUNAL HAS ALREADY H E LD THAT NO AMOUNT IS DISALLOWABLE AND THIS GROUND IS SIMILAR TO GROUND NO. 5 & 6 OF THE ASSESSEES APPEAL. ACCORDINGLY, IN VIEW OF THE FINDING GIVEN THEREIN THAT NONE OF THE REIMBUR SEMENT OF EXPENSES AMOUNT CAN BE CONSIDERED AS INCOME OF THE ASSESSEE THIS ISSUE IS DECID ED IN FAVOUR OF THE ASSES S EE AND AGAINST REVENUE . ACCORDINGLY, GROUND NO. 3 AS RAISED BY THE REVENUE IS DISMISSED. 22 . SO FAR AS THE ISSUE RELATING TO GROUND NO. 4 TH AT IS, LD. CIT(A) HAS ERRED IN EXCLUDING RECEIPTS FROM SERIUM INSTITUTE OF INDIA LTD , IT HAS BEEN ADMITTED BY BOTH THE PARTIES THAT THIS ISSUE IS N O T ARISING IN THIS YEAR AND, THEREFORE, NO ADJUDICATION IS REQUIRED. ACCORDINGLY, THE ISSUE RAISED IN GROUND NO. 4 IS TREATED AS DISMISSED AS THERE IS NO RECEIPT OF THIS KIND IN THIS YEAR. 23 . LASTLY, REGARDING GROUND NO. 5 RELATING TO DENIAL OF BENEFIT UNDER INDO - UK DTAA, IT HAS BEEN ADMITTED THAT THE TREATY BENEFIT OF INDO - UK DTAA HAS BEEN ALLOWED BY THE TRIB UNAL IN THE EARLIER YEARS, THEREFORE, IN AY 1995 - 96, THIS ISSUE HAS BEEN CONCLUDED IN FAVOUR OF THE ASSESSEE IN THE FOLLOWING MANNER : - IN VIEW OF THE ABOVE DISCUSSIONS, AS ALSO BEARING IN MIND THE ENTIRETY OF THE CASE, WE HOLD THAT THE ASSESSEE WAS INDEE D ELIGIBLE TO THE BENEFITS OF INDIA - UK TAX TREATY, AS LONG AS ENTIRE PROFITS AND THE PARTNERSHIP FIRM ARE TAXED IN UK WHETHER IN THE HANDS OF THE PARTNERSHIP FIRM THOUGH THE TAXABLE INCOME IS DETERMINED IN RELATION TO THE PERSONAL CHARACTERISTICS OF THE PARTNERS, OR IN THE HANDS OF THE PARTNERS DIRECTLY. TO THAT LINKLATERS (FORMERLY LINKLATERS AND PAINES) ITA NO. 1355 /MUM/20 0 4 ALONG WITH 07 GROUP A PPEALS 14 EXTENT, OBJECTION TAKEN BY THE LEARNED DEPARTMENTAL REPRESENTATIVE, ON THE QUESTION OF ADMISSIBILITY OF INDIA - UK TAX TREATY BENEFITS, IS HELD AS MAINTAINABLE BUT REJECTED ON MERITS. 24 . THUS, GR OUND NO. 5 RAISED BY THE REVENUE I S DISMISSED. 25 . IN THE RESULT, REVENUE S APPEAL IS DISMISSED. ITA 1356/MUM/2004 : AY 1999 - 20 0 0 : ASSESSEES APPEAL : 26 . IN THE IMPUGNED APPEAL , THE ASSESSEE HAS RAISED EXACTLY SIMILAR GROUNDS (AS RAISED BY THE ASSESS EE IN AY 1998 - 99) WHICH FOR THE SAKE OF READY REFERENCE ARE REPRODUCED HEREUNDER : - 1. THE LEARNED COMMISSIONER (APPEALS) OUGHT TO HAVE DIRECTED THE ASSESSING OFFICER TO DETERMINE THE TOTAL INCOME OF THE APPELLANT AT RS. NIL AS RETURNED BY THE APPELLANT . 2. THE LEARNED COMMISSIONER (APPEALS) ERRED IN HOLDING THAT THE APPELLANT HAD A PERMANENT ESTABLISHMENT IN INDIA UNDER ARTICLE 5(2)(K) OF THE TAX TREATY BETWEEN INDIA AND U.K. THE LEARNED COMMISSIONER (APPEALS) OUGHT TO HAVE APPRECIATED THAT THE APPELLA NT HAD NO PERMANENT ESTABLISHMENT IN INDIA. 3. WITHOUT PREJUDICE TO THE ABOVE, THE LEARNED COMMISSIONER (APPEALS) ERRED IN NOT DIRECTING THE ASSESSING OFFICER TO ACCEPT THE COMPUTATION PROVIDED BY THE APPELLANT IN THE INCOME AND EXPENDITURE ACCOUNT AS BEI NG THE INCOME ATTRIBUTABLE TO THE PERMANENT ESTABLISHMENT. THE LEARNED COMMISSIONER (APPEALS) OUGHT TO HAVE DIRECTED THE ASSESSING OFFICER TO ADOPT THE GROSS INCOME AT 650 ,4 66 , DEDUCTION FOR DIRECT EXPENDITURE AT 2 ,81 , 550 , DEDUCTION FOR OVERHEADS AT 3 2,5 3 9 AND NET PROFIT AT 3 ,36 ,3 77 . 4. WITHOUT PREJUDICE TO THE ABOVE, COMMISSIONER (APPEALS) ERRED IN NOT DIRECTING THE ASSESSING OFFICER TO COMPUTE THE TOTAL INCOME AT THE NUMBER OF HOURS CHARGED AT APPROPRIATE RATES FOR AN INDIAN LAWYER VIZ. 1 30 PER HOUR FOR A PARTNER AND 90 PER HOUR FOR AN ASSISTANT. LINKLATERS (FORMERLY LINKLATERS AND PAINES) ITA NO. 1355 /MUM/20 0 4 ALONG WITH 07 GROUP A PPEALS 15 5. THE LEARNED COMMISSIONER (APPEALS) ERRED IN UPHOLDING THE ACTION OF THE ASSESSING OFFICER IN CONSIDERING THE REIMBURSEMENT OF EXPENDITURE OF POUNDS STERLING 4 , 88 , 25 5. 25 AS PART OF INCOME OF THE AP PELLANT AND AS LIABLE TO TAX IN INDIA. 6. THE LEARNED COMMISSIONER (APPEALS) ERRED IN CONFIRMING THE DISALLOWANCE OF DISBURSEMENTS TO THE EXTENT OF 25% OF THE DISBURSEMENT CLAIM PROPORTIONATE TO THE FEE RELATING TO SERVICES RENDERED IN INDIA AS COMPARED T O THE TOTAL FEES. THE COMMISSIONER (APPEALS) OUGHT TO HAVE DIRECTED THE ASSESSING OFFICER TO ALLOW DEDUCTION FOR THE ENTIRE AMOUNT OF THE DISBURSEMENTS. 7. THE LEARNED COMMISSIONER (APPEALS) ERRED IN DISMISSING THE FOLLOWING GROUND IN APPEAL AS INFRUCTUOU S: 10 . THE LEARNED INCOME - TAX OFFICER ERRED IN NOT ALLOWING DEDUCTION FOR REMUNERATION PAID BY THE APPELLANT TO ITS EMPLOYEES FOR SERVICES PERFORMED OUTSIDE INDIA. 11. INCOME - TAX OFFICER ERRED IN STATING THAT THE APPELLANT HAD NOT FURNISHED DETAILS OF THE REMUNERATION PAID BY THE APPELLANT FOR SERVICES PERFORMED OUTSIDE INDIA. 8. THE LEARNED COMMISSIONER (APPEALS) ERRED IN UPHOLD ING THE ACTION OF THE ASSESSING OFFICER IN APPLYING THE RATE OF TAX OF 35 PER CENT AS AGAINST THE CORRECT RATE OF 30 PER CEN T TO THE APPELLANTS INCOME. THE LEARNED COMMISSIONER (APPEALS) ERRED IN HOLDING THAT THE CORRECT RATE OF TAX IS THAT APPLICABLE TO A PARTNERSHIP FIRM AND NOT THAT APPLICABLE TO AN ASSOCIATION OF PERSONS. 9. THE LEARNED COMMISSIONER (APPEALS) ERRED IN NO T DECIDING THE OF FOLLOWING GROUND IN THE APPEAL: 7. WITHOUT PREJUDICE TO GROUND NO. 2 TO 6 ABOVE, THE INCOME - TAX OFFICER ERRED IN HOLDING THAT THE APPELLANT WAS ALSO LIABLE TO TAX IN INDIA UNDER ARTICLE 15 OF THE TAX TREATY BETWEEN INDIA AND THE UK. THE INCOME - TAX OFFICER OUGHT TO HAVE APPRECIATED THAT ARTICLE 15 WAS APPLICABLE ONLY TO INDIVIDUALS AND WAS NOT APPLICABLE TO THE CASE OF THE APPELLANT. LINKLATERS (FORMERLY LINKLATERS AND PAINES) ITA NO. 1355 /MUM/20 0 4 ALONG WITH 07 GROUP A PPEALS 16 10. THE LEARNED COMMISSIONER (APPEALS) ERRED IN NOT QUASHING THE PENALTY PROCEEDINGS UNDER SECTION 2 71(1)(C) OF THE INCOME - TAX ACT INITIATED BY THE LEARNED ASSESSING OFFICER. 27 . SINCE ALL THE ISSUES RAISED ARE EXACTLY THE SAME, THEREFORE, THE FINDING GIVEN IN ASSESSEES APPEAL IN ITA NO. 1355/MUM/2004 FOR AY 1998 - 99 WILL APPLY MUTATIS MUTANDIS IN THI S YEAR ALSO AND ACCORDINGLY, ALL THE GROUNDS RAISED IN THE IMPUGNED APPEAL LIKEWISE ARE TREATED AS PARTLY ALLOWED. 28 . IN THE RESULT, APPEAL OF THE ASSESSEE I S PARTLY ALLOWED. ITA 1713/MUM/2004 : AY 1999 - 20 0 0 : REVENUES APPEAL : 29 . SIMILARLY IN REVENU ES APPEAL FOLLOWING GROUNDS HAVE BEEN RAISED : - 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A) WAS NOT JUSTIFIED IN HOLDING THAT THE ASSESSEE WAS TAXABLE IN RESPECT OF ONLY THAT PORTION OF INCOME THAT WAS RELATED TO THE S ERVICES PERFORMED IN INDIA. THE LD. CIT(A) HAS NOT APPRECIATED THE FORCE OF ATTRACTION PRINCIPLE IN ARTICLE 7 OF THE INDO - UK DTAA. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A) HAS ERRED IN HOLDING THAT INTEREST U/S 2 34B OF THE I.T. ACT, 1961 WAS NOT CHARGEABLE IN THE CASE OF THE ASSESSEE ON THE GROUND THAT IN THE CASE OF A NON RESIDENT ASSESSEE, ALL SUMS CHARGEABLE TO TAX ARE LIABLE TO DEDUCTION OF TAX AT SOURCE UNDER SECTION 195 OF THE INCOME - TAX ACT. 1961. 3. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A) WAS NOT JUSTIFIED IN GIVING RELIEF IN RESPECT OF THE DISBURSEMENT PARTICULARLY WHEN COMPLETE DETAILS WERE NOT PRODUCED BY THE ASSESSEE. LINKLATERS (FORMERLY LINKLATERS AND PAINES) ITA NO. 1355 /MUM/20 0 4 ALONG WITH 07 GROUP A PPEALS 17 4. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A) WAS NOT JUSTIFIED IN DIRECTING THE AO TO EXCLUDE THE RECEIPT FROM THE SERUM INSTITUTE OF INDIA LIMITED. THE LD. CIT(A) HAS NOT APPRECIATE THE FORCE OF ATTRACTION PRINCIPLE IN ARTICLE 7 OF THE INDO - UK DTAA. 5. WITH P REJUDICE TO THE ABOVE, THE LD. CIT(A) SHOULD HAVE DENIED BENEFIT OF THE INDO - UK DTAA AS THE ASSESSEE IS A PARTNERSHIP FIRM IN THE UK WHERE IT IS NOT TAXED. HENCE IT IS NOT A RESIDENT OF UK UNDER THE SAID DTAA. THE ENTIRE INCOME WOULD BE, THUS, LIABLE TO TA XATION AS PER THE INCOME - TAX ACT, 1961 ALONE. 30 . THE AFORESAID GROUNDS ARE AGAIN SIMILAR TO GROUND RAISED BY THE DEPARTMENT IN ITA NO. 1712/MUM/2004 THEREFORE, IN VIEW OF OUR FINDING GIVEN THEREIN, ALL THE GROUNDS RAISED BY THE REVENUE ARE TREATED AS DI SMISSED. 31 . IN THE RESULT, APPEAL OF THE REVENUE STANDS DISMISSED. ITA 1357/MUM/2004 : AY 20 0 0 - 01 : ASSESSEES APPEAL : 31 . IN THE IMPUGNED APPEAL, THE ASSESSEE HAS RAISED EXACTLY SIMILAR GROUNDS (AS RAISED BY THE ASSESSEE IN AYS 1998 - 99 & 1999 - 2000) HAS BEEN TAKEN BY THE ASSESSEE, WHICH FOR THE SAKE OF READY REFERENCE ARE REPRODUCED HEREUNDER : - 1. THE LEARNED COMMISSIONER (APPEALS) OUGHT TO HAVE DIRECTED THE ASSESSING OFFICER TO DETERMINE THE TOTAL INCOME OF THE APPELLANT AT RS. NIL AS RETURNED B Y THE APPELLANT. 2. THE LEARNED COMMISSIONER (APPEALS) ERRED IN HOLDING THAT THE APPELLANT HAD A PERMANENT ESTABLISHMENT IN INDIA UNDER ARTICLE 5(2)(K) OF THE TAX TREATY BETWEEN INDIA AND U.K. THE LEARNED COMMISSIONER (APPEALS) OUGHT TO HAVE APPRECIATED T HAT THE APPELLANT HAD NO PERMANENT ESTABLISHMENT IN INDIA. LINKLATERS (FORMERLY LINKLATERS AND PAINES) ITA NO. 1355 /MUM/20 0 4 ALONG WITH 07 GROUP A PPEALS 18 3. WITHOUT PREJUDICE TO THE ABOVE, THE LEARNED COMMISSIONER (APPEALS) ERRED IN NOT DIRECTING THE ASSESSING OFFICER TO ACCEPT THE COMPUTATION PROVIDED BY THE APPELLANT IN THE INCOME AND EXPENDITURE ACCOUNT AS BEING THE INCOME ATTRIBUTABLE TO THE PERMANENT ESTABLISHMENT. THE LEARNED COMMISSIONER (APPEALS) OUGHT TO HAVE DIRECTED THE ASSESSING OFFICER TO ADOPT THE GROSS INCOME AT 4,78,525, DEDUCTION FOR DIRECT EXPENDITURE AT 1,60,441, DEDUCTION FOR OVERHEADS AT 23,925 AND NET PROFIT AT 2,94,159. 4. WITHOUT PREJUDICE TO THE ABOVE, COMMISSIONER (APPEALS) ERRED IN NOT DIRECTING THE ASSESSING OFFICER TO COMPUTE THE TOTAL INCOME AT THE NUMBER OF HOURS CHARGED AT APPROPRIATE RATES FOR AN INDIAN LAWYE R VIZ. 13 6.50 PER HOUR FOR A PARTNER AND 94.50 PER HOUR FOR AN ASSISTANT. 5. THE LEARNED COMMISSIONER (APPEALS) ERRED IN UPHOLDING THE ACTION OF THE ASSESSING OFFICER IN CONSIDERING THE REIMBURSEMENT OF EXPENDITURE OF POUNDS STERLING 19,37,335.13 AS P ART OF INCOME OF THE APPELLANT AND AS LIABLE TO TAX IN INDIA. 6. THE LEARNED COMMISSIONER (APPEALS) ERRED IN CONFIRMING THE DISALLOWANCE OF DISBURSEMENTS TO THE EXTENT OF 25% OF THE DISBURSEMENT CLAIM PROPORTIONATE TO THE FEE RELATING TO SERVICES RENDERED IN INDIA AS COMPARED TO THE TOTAL FEES. THE COMMISSIONER (APPEALS) OUGHT TO HAVE DIRECTED THE ASSESSING OFFICER TO ALLOW DEDUCTION FOR THE ENTIRE AMOUNT OF THE DISBURSEMENTS. 7. THE LEARNED COMMISSIONER (APPEALS) ERRED IN DISMISSING THE FOLLOWING GROUND IN APPEAL AS INFRUCTUOUS: 10. THE LEARNED INCOME - TAX OFFICER ERRED IN NOT ALLOWING DEDUCTION FOR REMUNERATION PAID BY THE APPELL A NT TO ITS EMPLOYEES FOR SERVICES PERFORMED OUTSIDE INDIA. 8. THE LEARNED COMMISSIONER (APPEALS) ERRED IN UPHOLDING THE ACT I ON OF THE ASSESSING OFFICER IN APPL Y ING THE RATE OF TAX OF 3 5 PER CENT AS AGAINST THE CORRECT RATE OF 30 PER CENT TO THE APPELLANTS INCOME. THE LEARNED COMMISSIONER (APPEALS) ERRED IN HOLDING THAT THE CORRECT RATE OF TAX IS THAT LINKLATERS (FORMERLY LINKLATERS AND PAINES) ITA NO. 1355 /MUM/20 0 4 ALONG WITH 07 GROUP A PPEALS 19 APPLICABLE TO T HE PARTNER SHIP FIRM AND NOT THAT APPLICABLE TO AN ASSOCIATION OF PERSONS. 9. THE LEARNED COMMISSIONER (APPEALS) ERRED IN NOT QUASHING THE PENALTY PROCEEDINGS UNDER SECTION 271(1)(C) OF THE INCOME - TAX ACT INITIATED BY THE LEARNED ASSESSING OFFICER. 10. LEARNED COM MISSIONER (APPEALS) ERRED IN NOT DECIDING THE FOLLOWING GROUNDS IN THE APPEAL: 8 . THE LEARNED INCOME - TAX OFFICER ERRED IN HOLDING THAT THE APPELLANT HAD NOT BEEN ABLE TO PRODUCE ALL THE INVOICES AND THAT THE BILLS DID NOT CONTAIN ANY SUPPORTING . THE A PPELLANT SUBMITS THAT ALL THE INVOICES INCLUDING THOSE PERTAINING TO REIMBURSEMENT OF EXPENDITURE WERE SUBMITTED VIDE LETTER DATED FEBRUARY 6, 2003 AND SUPPORTING IN CERTAIN CASES WERE SUBMITTED VIDE LETTER DATED MARCH 19,2003. 11. THE LEARNED INCOME - TAX OFFICER ERRED IN HOLDING THAT SOME OF THE SALARY EXPENDITURE IS COVERED BY THE DEDUCTION ALLOWED UNDER SECTION 44C OF THE INCOME - TAX ACCT. 12. THE LEARNED INCOME - TAX OFFICER ERRED IN HOLDING THAT THE APPELLANT WAS LIABLE TO TAX IN INDIA UNDER ARTICLE 15 OF THE TAX TREATY BETWEEN INDIA AND THE UK. THE INCOME - TAX OFFICER OUGHT TO HAVE APPRECIATED THAT ARTICLE 15 WAS APPLICABLE ONLY TO INDIVIDUALS AND WAS NOT APPLICABLE TO THE CASE OF THE APPELLANT. 13. THE LEARNED INCOME - TAX OFFICER ERRED IN HOLDING THAT T HE APPELLANT HAD A FIXED BASE IN INDIA FROM WHICH THE APPELLANT WAS PERFORMING ITS ACTIVITIES. 32 . SINCE ALL THE ISSUES ARE EXACTLY THE SAME, THEREFORE, THE FINDING GIVEN IN ASSESSEES APPEAL (ITA NO. 1355/MUM/2004 WHICH IS FOLLOWED AND APPLIED BY U S TO ITA NO. 1356/MUM/2004 ) WILL APPLY MUTATIS MUTANDIS IN THIS YEAR ALSO AND ACCORDINGLY, THE GROUNDS IN THE APPEAL OF THE ASSESSEE ARE TREATED AS PARTLY ALLOWED. 33 . IN THE RESULT, APPEAL OF THE ASSESSEE STANDS PARTLY ALLOWED. LINKLATERS (FORMERLY LINKLATERS AND PAINES) ITA NO. 1355 /MUM/20 0 4 ALONG WITH 07 GROUP A PPEALS 20 ITA 1714/MUM/2004 : AY 20 0 0 - 01 : REVENUES APPEAL : 34 . IN THE IMPUGNED APPEAL THE REVENUE HAS RAISED FOLLOWING GROUNDS : - 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A) WAS NOT JUSTIFIED IN HOLDING THAT THE ASSESSEE WAS TAXABLE IN RESPECT OF ON LY THAT PORTION OF INCOME THAT WAS RELATED TO THE SERVICES PERFORMED IN INDIA. THE LD. CIT(A) HAS NOT APPRECIATED THE FORCE OF ATTRACTION PRINCIPLE IN ARTICLE 7 OF THE INDO - UK DTAA. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A) HAS ERRED IN HOLDING THAT INTEREST U/S 234B OF THE I.T. ACT, 1961 WAS NOT CHARGEABLE IN THE CASE OF THE ASSESSEE ON THE GROUND THAT IN THE CASE OF A NON RESIDENT ASSESSEE, ALL SUMS CHARGEABLE TO TAX ARE LIABLE TO DEDUCTION OF TAX AT SOURCE UNDER SECTION 195 OF THE INCOME - TAX ACT. 1961. 3. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A) WAS NOT JUSTIFIED IN GIVING RELIEF IN RESPECT OF THE DISBURSEMENT PARTICULARLY WHEN COMPLETE DETAILS WERE NOT PRODUCED BY THE ASSES SEE. 4. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A) WAS NOT JUSTIFIED IN DIRECTING THE AO TO EXCLUDE THE RECEIPT FROM THE SERUM INSTITUTE OF INDIA LIMITED. THE LD. CIT(A) HAS NOT APPRECIATE THE FORCE OF ATTRACTION PRIN CIPLE IN ARTICLE 7 OF THE INDO - UK DTAA. 5. WITH PREJUDICE TO THE ABOVE, THE LD. CIT(A) SHOULD HAVE DENIED BENEFIT OF THE INDO - UK DTAA AS THE ASSESSEE IS A PARTNERSHIP FIRM IN THE UK WHERE IT IS NOT TAXED. HENCE IT IS NOT A RESIDENT OF UK UNDER THE SAID D TAA. THE ENTIRE INCOME WOULD BE, THUS, LIABLE TO TAXATION AS PER THE INCOME - TAX ACT, 1961 ALONE. LINKLATERS (FORMERLY LINKLATERS AND PAINES) ITA NO. 1355 /MUM/20 0 4 ALONG WITH 07 GROUP A PPEALS 21 35 . THE AFORESAID GROUNDS ARE AGAIN SIMILAR TO GROUND RAISED BY THE DEPARTMENT IN ITA NO. 1712/MUM/2004 WHICH WE HAVE FOLLOWED AND APPLIED IN ITA NO. 1713/MU M/2004 , THEREFORE, IN VIEW OF OUR FINDING GIVEN THEREIN, ALL THE GROUNDS RAISED BY THE REVENUE ARE TREATED AS DISMISSED. 3 6 . IN THE RESULT, APPEAL OF THE REVENUE STANDS DISMISSED. ITA 2812/MUM/200 5 : AY 20 0 1 - 02 : ASSESSEES APPEAL : 37 . IN THE IMPUGNED APPEAL, THE ASSESSEE HAS RAISED EXACTLY SIMILAR GROUNDS (AS RAISED BY THE ASSESSEE IN AYS 1998 - 99, 1999 - 2000 & 200 0 - 01 ) HAS BEEN TAKEN BY THE ASSESSEE, WHICH FOR THE SAKE OF READY REFERENCE ARE REPRODUCED HEREUNDER : - 1. THE LEARNED COMMISSIONER (APPEA LS) ERRED IN HOLDING THAT THE APPELLANT HAD A PERMANENT ESTABLISHMENT IN INDIA UNDER ARTICLE 5(2)(K) OF THE TAX TREATY BETWEEN INDIA AND U.K. THE LEARNED COMMISSIONER (APPEALS) OUGHT TO HAVE APPRECIATED THAT THE APPELLANT HAD NO PERMANENT ESTABLISHMENT IN INDIA. 2. WITHOUT PREJUDICE TO THE ABOVE, THE LEARNED COMMISSIONER (APPEALS) ERRED IN NOT DIRECTING THE ASSESSING OFFICER TO ACCEPT THE COMPUTATION PROVIDED BY THE APPELLANT IN THE INCOME AND EXPENDITURE ACCOUNT AS BEING THE INCOME ATTRIBUTABLE TO THE PER MANENT ESTABLISHMENT. THE LEARNED COMMISSIONER (APPEALS) OUGHT TO HAVE DIRECTED THE ASSESSING OFFICER TO ADOPT THE GROSS INCOME AT 3,99,373, DEDUCTION FOR DIRECT EXPENDITURE AT 2,07,047, DEDUCTION FOR OVERHEADS AT 19,978 AND NET PROFIT AT 1,72,348. 3. WITHOUT PREJUDICE TO THE ABOVE, COMMISSIONER (APPEALS) ERRED IN NOT DIRECTING THE ASSESSING OFFICER TO COMPUTE THE TOTAL INCOME AT THE NUMBER OF HOURS CHARGED AT APPROPRIATE RATES FOR AN INDIAN LAWYER VIZ. POUNDS STERLING 145 PER HOUR FOR A PARTNER AN D POUNDS STERLING 100 PER HOUR FOR AN ASSISTANT. 4. WITHOUT PREJUDICE TO THE LEARNED COMMISSIONER (APPEALS) OUGHT TO HAVE SPECIFICALLY DIRECTED THE LINKLATERS (FORMERLY LINKLATERS AND PAINES) ITA NO. 1355 /MUM/20 0 4 ALONG WITH 07 GROUP A PPEALS 22 ASSESSING OFFICER TO ASSESSEE THE APPELLANT ONLY IN RESPECT OF FEES OF 6,07,471, WHICH WERE RELATABLE TO WORK PERFORMED IN INDIA. 5. THE LEARNED COMMISSIONER (APPEALS) OUGHT TO HAVE HELD THAT EVEN IF THE BENEFIT OF THE TAX BETWEEN INDIA AND U.K. IS DENIED TO THE APPELLANT, ONLY THE FEES RELATING TO WORK PERFORMED IN INDIA SHOULD BE LIABLE TO TAX IN INDIA. 6. THE LEARNED COMMISSIONER (APPEALS) ERRED IN UPHOLD ING THE ACTION OF THE ASSESSING OFFICER IN TREATING DISBURSEMENTS AS PART OF INCOME OF THE APPELLANT. 7. WITHOUT PREJUDICE TO GROUND 6 ABOVE, THE LEARNED COMMISSIONER (APPEALS) ERRED IN CONFIRMING THE D ISALLOWANCE IN RESPECT OF DISBURSEMENT TO THE EXTEND OF 25% OF THE DISBURSEMENT CLAIM PROPORTIONATE TO THE FEE RELATING TO SERVICES RENDERED IN INDIA AS COMPARED TO THE TOTAL FEES. THE COMMISSIONER (APPEALS) OUGHT TO HAVE ENTIRELY DELETED THE DISALLOWANCE. 8. THE LEARNED COMMISSIONER (APPEALS) ERRED IN CONFIRMING THE FINDING OF THE ASSESSING OFFICER THAT THE APPELLANT HAD A FIXED BASE IN INDIA FROM WHICH THE APPELLANT WAS PERFORMING ITS ACTIVITIES. 9. THE LEARNED COMMISSIONER (APPEALS) ERRED IN UPHOLDING THE ACTION OF THE ASSESSING OFFICER IN APPLYING THE RATE OF TAX OF 35 PER CENT AS AGAINST THE CORRECT RATE OF 30PER CENT TO THE APPELLANTS INCOME. THE LEARNED COMMISSIONER OF (APPEALS) ERRED IN HOLDING THAT THE CORRECT RATE OF TAX IS THAT APPLICABLE TO TH E PARTNERSHIP FIRM AND NOT THAT APPLICABLE TO AN ASSOCIATION OF PERSONS. 10. LEARNED COMMISSIONER (APPEALS) ERRED IN NOT QUASHING THE PENALTY PROCEEDINGS UNDER SECTION 271(1)(C) OF THE INCOME TAX ACT INITIATED BY THE LEARNED ASSESSING OFFICER. 11. THE L EARNED COMMISSIONER (APPEALS) ERRED IN NOT DECIDING THE FOLLOWING GROUNDS IN THE APPEAL: 11 . THE LEARNED INCOME - TAX OFFICER ERRED IN HOLDING THAT THE APPELLANT HAD NOT BEEN ABLE TO PRODUCE ALL THE INVOICES AND THAT THE BILLS DID NOT CONTAIN ANY SUPPOR TING . THE APPELLANT SUBMITS LINKLATERS (FORMERLY LINKLATERS AND PAINES) ITA NO. 1355 /MUM/20 0 4 ALONG WITH 07 GROUP A PPEALS 23 THAT ALL THE INVOICES INCLUDING THESE PERTAINING TO THE REIMBURSEMENT OF EXPENDITURE WERE SUBMITTED VIDE LETTER DATED FEBRUARY 26, 2004 AND SUPPORTING IN CERTAIN CASES WERE SUBMITTED ON MARCH 4, 2004. 12. THE LEARNED INCOME - TA X OFFICER ERRED IN NOT ALLOWING DEDUCTION FOR REMUNERATION PAID BY THE APPELLANT TO ITS EMPLOYEES FOR SERVICES PERFORMED OUTSIDE INDIA. 13. THE LEARNED INCOME - TAX OFFICER ERRED IN HOLDING THAT THE APPELLANT WAS LIABLE TO TAX IN INDIA UNDER ARTICLE 15 OF T HE TAX TREATY BETWEEN INDIA AND THE U.K. THE INCOME - TAX OFFICER OUGHT TO HAVE APPRECIATED THAT ARTICLE 15 WAS APPLICABLE ONLY TO INDIVIDUALS AND WAS NOT APPLICABLE TO THE CASE OF THE APPELLANT . 38. SINCE ALL THE ISSUES ARE EXACTLY THE SAME, THEREFORE, THE FINDING GIVEN IN ASSESSEES APPEAL (ITA NO. 1355/MUM/2004 WHICH IS FOLLOWED AND APPLIED BY US TO ITA NO. 1356/MUM/2004 & ITA NO.1357/MUM/2004) WILL APPLY MUTATIS MUTANDIS IN THIS YEAR ALSO AND ACCORDINGLY, THE GROUNDS IN THE APPEAL OF THE ASSESSEE ARE TREATED AS PARTLY ALLOWED. 39. IN THE RESULT, APPEAL OF THE ASSESSEE STANDS PARTLY ALLOWED. ITA 3596/MUM/2005 : AY 20 0 1 - 02 : REVENUES APPEAL : 40 . IN THE IMPUGNED APPEAL THE REVENUE HAS RAISED FOLLOWING GROUNDS : - 1. ON THE FACTS AND IN THE CIRCUMSTA NCES OF THE CASE AND IN LAW, THE LD. CIT(A) HAS ERRED IN HOLDING THAT THE ASSESSEE ENTITLED FOR THE BENEFIT OF INDO - UK TREATY WITHOUT APPRECIATING THAT THE ASSESSEE, BEING A PARTNERSHIP FIRM, IS NOT LIABLE TO PAY TAX IN UK AND THUS IS NOT A RESIDENT FOR T HE PURPOSE OF INDO - UK TREATY. 2.(I) ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A) HAS ERRED IN HOLDING THAT ONLY THE INCOME LINKLATERS (FORMERLY LINKLATERS AND PAINES) ITA NO. 1355 /MUM/20 0 4 ALONG WITH 07 GROUP A PPEALS 24 RELATABLE TO WORK PERFORMED IN INDIA IS LIABLE TO TAXATION IN INDIA. (II) ON THE FACTS AND IN THE CIR CUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A) HAS ERRED IN HOLDING THAT REMUNERATIONS CAN BE ALLOWED ON WHICH TAX HAS BEEN DEDUCTED. 3. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A) WAS NOT JUSTIFIED IN GIVING RELIEF I N RESPECT OF THE DISBURSEMENT PARTICULARLY WHEN COMPLETE DETAILS WERE NOT PRODUCED BY THE ASSESSEE. 4. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A) HA S ERRED IN HOLDING THAT THE ASSESSEE IS NOT LIABLE TO PAY INTEREST U/S 234B OF THE I.T. ACT. 5. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A) HAS ERRED IN HOLDING THAT NOT TO CHARGE INTEREST U/S 234D OF THE I.T. ACT WHERE REFUND HAS BEEN RECEIVED BY THE ASSESSEE BEFORE THE DATE OF INSERTION OF SECTION 234D . 41 . HERE IN THIS APPEAL SO FAR AS ISSUES RAISED VIDE GROUND NO. 1 TO 4, THESE ARE AGAIN SIMILAR TO GROUND RAISED BY THE DEPARTMENT IN ITA NO. 1712/MUM/2004 WHICH WE HAVE FOLLOWED AND APPLIED IN ITA NO. 1713/MUM/2004 & 1714/MUM/2004, THEREFO RE, IN VIEW OF OUR FINDING GIVEN THEREIN, THESE GROUNDS RAISED BY THE REVENUE ARE TREATED AS DISMISSED. HOWEVER, SO FAR AS GROUND NO. 5 RELATING TO LEVY OF INTEREST U/S 234D, IT HAS ADMITTED BY THE LD. SENIOR COUNSEL THAT THIS ISSUE STANDS DECIDED AGAINST THE ASSESSEE IN THE CASE OF INDIAN OIL CORPORATION LTD IN ITA NO. 2012 OF 2011, WHEREIN, HONBLE BOMBAY HIGH COURT HELD THAT THE CHARGING OF INTEREST U/S 234D AS INTRODUCED FR O M 1 ST JUNE, 2003 WILL HAVE RETROSPECTIVE EFFECT. ACCORDINGLY, FOLLOWING THE BIND ING JUDICIAL PRECEDENCE, WE HOLD THAT INTEREST U/S 234D WILL BE LEVIABLE IN CASE LINKLATERS (FORMERLY LINKLATERS AND PAINES) ITA NO. 1355 /MUM/20 0 4 ALONG WITH 07 GROUP A PPEALS 25 OF THE ASSESSEE FOR THIS YEAR ALSO. ACCORDINGLY, GROUND NO. 5 AS RAISED BY THE REVENUE IS ALLOWED. 42. IN THE RESULT, APPEAL OF THE REVENUE STANDS PARTLY ALLOWED . TO SUM - UP T HE RESULT : - ALL THE APPEAL OF THE ASSESSEE IN AYS 1998 - 99 TO A Y S 2001 - 02 ARE PARTLY ALLOWED AND ALL THE APPEAL OF THE REVENUE IN AYS 1998 - 99 TO A Y S 200 0 - 0 1 ARE DISMISSED AND FOR AY 2001 - 02 STANDS PARTLY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 7 T H SEPTEMBER , 2015. SD/ - SD/ - ( GOPAL KEDIA ) ( AMIT SHUKLA ) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI, DATE: 7 TH SEPTEMBER , 2015 / COPY TO : - 1 ) / THE APPELLANT. 2 ) / THE RESPONDENT. 3) THE CIT (A) - XXXIII / CONCERNED ____ , MUMBAI. 4 ) THE CIT , CONCERNED /DIT(IT) CONCERNED ____ MUMBAI. 5 ) , , / THE D.R. D BENCH, MUMBAI. 6 ) \ COPY TO GUARD FILE. / BY ORDER / / TRUE COPY / / / , DY. / ASSTT. REGISTRAR I.T.A.T., MUMBAI * . . *CHAVAN, SR.PS