DCIT, CHENNAI V. Aspire Systems (India) P. Ltd., CHENNAI

ITA 1407/CHNY/2013

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 86315 (ITAT-CHENNAI)
• Duration Of Justice: 1 year(s) 8 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-02-2015
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 23-02-2015
• Assessment Year: 2009-2010
• Appeal Filed On: 24-06-2013
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: S DASGUPTA
• Assessee Lawyers: MRS JHARNA B HARILAL
• Keywords: Opportunity of being heard
• Section: 143(3); 14A

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH, CHENNAI . , . ' #$ , % & BEFORE SHRI A. MOHAN ALANKAMONY, ACCOUNTANT MEMBER AND SHRI V. DURGA RAO, JUDICIAL MEMBER ./ ITA NO.1407/MDS/2013 & C.O. NO.137/MDS/2013 (IN I.T.A. NO. 1407/MDS/2013) % $ ($ / ASSESSMENT YEAR : 2009-10 THE DEPUTY COMMISSIONER OF INCOME TAX, COMPANY CIRCLE I(1), CHENNAI - 600 034. V. M/S ASPIRE SYSTEMS (INDIA) P. LTD., NO.7, TRUST LINK ROAD, MANDAVELI, CHENNAI - 600 028. PAN : AACCA 4543 M (*+/ APPELLANT) (,-*+/ RESPONDENT & CROSS OBJECTOR) REVENUE BY : SHRI S. DAS GUPTA, JCIT ASSESSEE BY : MRS. JHARNA B. HARILAL, FCA ' . / / DATE OF HEARING : 23.02.2015 0( . / / DATE OF PRONOUNCEMENT: 25.02.2015 / O R D E R PER V. DURGA RAO, JUDICIAL MEMBER: THE APPEAL FILED BY THE REVENUE AND THE CROSS-OBJ ECTION FILED BY THE ASSESSEE ARE DIRECTED AGAINST THE ORDE R DATED 11-02- 2013 PASSED BY THE COMMISSIONER OF INCOME TAX (APPE ALS)-VI, CHENNAI, AND THEY RELATE TO ASSESSMENT YEAR 2009-10 . 2 I.T.A. NO. 1407/MDS/2013 C.O. NO. 137/MDS/2013 2. FACTS ARE IN BRIEF THAT THE ASSESSEE IS IN THE B USINESS OF PROVIDING OUTSOURCED PRODUCT DEVELOPMENT SERVICES. THE ASSESSEE HAD FILED A RETURN OF INCOME BY ADMITTING A TOTAL I NCOME OF ` 7,54,35,305/-. IT CLAIMED DEDUCTION UNDER SECTION 10A OF INCOME- TAX ACT, 1961 (IN SHORT 'THE ACT') OF ` 7,33,78,813/-. AFTER DUE PROCESS, THE A.O. HAS COMPLETED THE ASSESSMENT UNDE R SECTION 143(3) OF THE ACT. IN THE ASSESSMENT ORDER, THE A. O. HAS OBSERVED THAT IT IS OBSERVED FROM THE FINANCIALS THAT THE AS SESSEE HAS NOT DEDUCTED TDS ON AGENCY COMMISSION OF ` 1,00,62,191/- AND CONSULTANCY CHARGES OF ` 4,14,42,184/-. WHEN QUESTIONED, IT WAS REVEALED THAT THESE PAYMENTS MADE TO NON-RESIDENTS WERE DEEMED TO ARISE IN INDIA UNDER SECTION 9(1)(VII) OF THE AC T AND THEREFORE, CHARGEABLE TO TAX IN INDIA. ON THE ABOVE OBSERVATI ON, THE A.O. BY INVOKING SECTION 40(A)(I), DELETED AN AMOUNT OF ` 5,15,04,375/-. 3. ON APPEAL, THE LD. CIT(APPEALS) WITHOUT DISCUSSI NG ANY FACTS SIMPLY DELETED THE ADDITION MADE BY THE A.O. 4. REVENUE CARRIED THE MATTER IN APPEAL BEFORE THE TRIBUNAL. THE LD. D.R. STRONGLY SUPPORTED THE ORDER OF THE A. O. WHEN THE BENCH POINTED OUT REGARDING PAYMENTS OF AGENCY COMM ISSION AND THE CONSULTANCY CHARGES, THE LD.COUNSEL FOR THE ASS ESSEE SUBMITTED 3 I.T.A. NO. 1407/MDS/2013 C.O. NO. 137/MDS/2013 THAT THE ISSUE MAY BE REMITTED BACK TO THE FILE OF THE A.O. FOR VERIFICATION. 5. WE HAVE HEARD BOTH SIDES AND PERUSED THE RECORDS AND GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW. WE FIND THAT NEITHER THE A.O. NOR THE LD. CIT(APPEALS) DISCUSSED THE FACTUAL ASPECTS OF THE ISSUE. THEREFORE WE SET ASIDE THE O RDER PASSED BY THE LD. CIT(APPEALS) AND REMIT THE MATTER BACK TO T HE FILE OF THE A.O. TO DECIDE THE ISSUE AFTER CONSIDERING ALL THE FACTS WITH REGARD TO AGENCY COMMISSION AND CONSULTANCY CHARGES AND AFTER GIVING REASONABLE OPPORTUNITY OF BEING HEARD TO THE ASSESS EE. 6. IN SOFAR AS THE SECOND GROUND RAISED BY THE REVE NUE WITH REGARD TO DISALLOWANCE MADE UNDER SECTION 14A OF TH E ACT IS CONCERNED, AGAIN THE AUTHORITIES BELOW HAVE NOT DIS CUSSED THE FACTS RELATING TO THE ACTUAL EXPENDITURE INCURRED BY THE ASSESSEE. THEREFORE WE SET ASIDE THE ORDER PASSED BY THE LD. CIT(APPEALS) AND DIRECT THE A.O. TO DECIDE THIS ISSUE ALSO AFRES H AFTER EXAMINING THE FACTS OF THE CASE. 7. IN THE RESULT, THE APPEAL FILED BY THE REVENUE I S ALLOWED FOR STATISTICAL PURPOSES. 4 I.T.A. NO. 1407/MDS/2013 C.O. NO. 137/MDS/2013 8. SINCE THE APPEAL IS REMITTED BACK TO A.O. TO DEC IDE THE ISSUE AFRESH, THE CROSS-OBJECTION FILED BY THE ASSESSEE I S ALLOWED FOR STATISTICAL PURPOSES. 9. TO SUMMARIZE THE RESULT, THE APPEAL FILED BY THE REVENUE AND THE CROSS-OBJECTION FILED BY THE ASSESSEE ARE A LLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED ON WEDNESDAY, THE 25 TH OF FEBRUARY, 2015 AT CHENNAI. SD/- SD/- ( . ) ( . ' #$ ) (A. MOHAN ALANKAMONY) (V. DURGA RAO) /ACCOUNTANT MEMBER % /JUDICIAL MEMBER /CHENNAI, = /DATED, THE 25 TH FEBRUARY, 2015. KRI. > . ,%/?@ A@(/ /COPY TO: 1. *+ /APPELLANT 2. ,-*+ /RESPONDENT 3. ' B/ () /CIT(A)-VI, CHENNAI 4. ' B/ /CIT-I, CHENNAI 5. @ D# ,%/% /DR 6. #E$ F /GF.