The ACIT, Circle-1(1)(2), Baroda V. M/s. Inox India Limited Ltd., Vadodara

ITA 143/AHD/2017

• Counselvise Citation: [2018] 112 COUNSELVISE.COM (IT) 3556 (ITAT-AHMEDABAD)
• Duration Of Justice: 1 year(s) 8 month(s) 10 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-09-2018
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: Not Allotted
• Assessment Year: 2010-2011
• Appeal Filed On: 17-01-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: LALIT P JAIN
• Keywords: TDS
• Section: 143(3); 195; 201

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD C BENCH BEFORE: SHR I MAHAVIR PRASAD , JUDICIAL MEMBER AND SHRI AMARJIT SINGH, ACCOUNTANT MEMBER THE ACIT, CIRCLE - 1(1)(2), BARODA (APPELLANT) VS M/S. INOX INDIA LTD. 4 TH FLOOR, ABS TOWERS, OLD PADRA ROAD, VADODARA PAN: AAACI4416P (RESPONDENT) REVENUE BY : S H RI LALIT P. JAIN , SR. D . R. ASSESSEE BY: SHRI BHAVIN MARFATIA, A.R. DATE OF HEARING : 28 - 08 - 2 018 DATE OF PRONOUNCEMENT : 27 - 09 - 2 018 / ORDER P ER : AMARJIT SINGH, ACCOUNTANT MEMBER : - THIS REVENUE S A PPEAL FOR A. Y. 2010 - 11 , ARI SES FROM ORDER OF THE CIT(A) - I, VADODARA DATED 31 - 10 - 2 016 , IN PROCEEDINGS UNDER SECTION 143(3) RWS 263 OF THE INCOME TAX ACT, 1961; IN SHORT THE ACT . 2. THE REVENUE HAS RAISED FOLLOWING GROUNDS OF APPEAL: - 1. ON THE FACTS AN D IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A) ERRED IN LAW AND FACT IN DELETING THE ADDITION MADE ON ACCOUNT OF NON DEDUCTION OF TDS ON THE AMOUNT OF RS. 99,20,174/ - WITHOUT APPRECIATING THE FINDINGS OF ASSESSING OFFICER IN THE ASSESSMENT O RDER AND IN VIEW OF CIRCULAR NO. 7 OF 2009 OF THE BOARD.' I T A NO . 143 / A HD/20 17 A SS ESSMENT YEAR 2010 - 11 I.T.A NO. 1 4 3 /AHD/20 17 A.Y. 2010 - 11 PAGE NO ACIT VS. M/S. INOX INDIA LTD. 2 3. THE SOLITARY GROUND OF APPEAL OF THE ASSESSEE IS AGAINST THE ADDITION MADE BY THE ASSESSING OFFICER ON ACCOUNT OF NON - DEDUCTION OF TDS VIDE ORDER U/S. 143(3) R.W.S. 2 63 OF THE ACT ON 29 TH JAN , 2016. DURING THE COURSE OF APPELLATE PROCEEDINGS BEFORE US, THE LD. COUNSEL HAS BROUGHT TO OUR NOTICE THAT THE ADDITION WAS MADE IN CONSEQUENT TO DIRECTION OF THE COMMISSIONER OF INCOME TAX ISSUE D VIDE ORDER U/S. 263 OF T HE ACT DATED 12 TH MARCH, 2015 DIRECTING THE ASSESSING OFFICER TO FRAME THE ASSESSMENT AFRESH AFTER EXAMINATION OF THE CLAI M OF THE ASSESSEE HAS BEEN QUASHED BY THE CO - ORDINATE BENCH OF THE IT AT VIDE ITA NO. 139/AHD/2015 IN THE CASE OF M/S. INOX INDIA LTD. VS. PRINCIPAL COMMISSIONER OF INCOME TAX DATED 25 - 09 - 2017, THEREFORE, THE ASSESSMENT MADE BY THE ASSESSING OFFICER IS NOT VALID. THE LD. DEPARTMENTAL REPRESENTATIVE WAS FAIR ENOUGH NOT TO CONTRADICT THIS UN DISPUTED FACT OF QUASHING THE IMPUGNED ORDER PASSED U/S. 263 OF THE ACT. 4. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE MATERIAL ON RECORD CAREFULLY AND WE HAVE NOTICED THAT VIDE ABOVE MENTIONED THE CO - ORDINATE BENCH OF THE IT AT HAS QUASHED THE O RDER U/S. 263 PASSED BY THE COMMISSIONER OF INCOME TAX - 1 , BARODA AND THE RELEVANT PART OF THE DECISION IS REPRODUCED AS UNDER: - 41. WE ARE IN CONSIDERED AGREEMENT WITH THE VIEWS SO EXPRESSED BY THE COORDINATE BENCH. IN VIEW OF THESE DISCUSSIONS, AS ALSO BEARING IN MIND ENTIRETY OF THE CASE, WE UPHOLD WELL REASONING FINDINGS OF THE LEARNED CIT(A) THAT THE COMMISSION PAYMENTS MADE TO THE NON - RESIDENT AGENTS DID NOT HAVE ANY TAXABILITY IN INDIA, EVEN UNDER THE PROVISIONS OF THE DOMESTIC LAW I.E. SECTION 9. O NCE WE COME TO THE CONCLUSION THAT THE INCOME EMBEDDED IN THESE PAYMENTS DID NOT HAVE ANY TAX IMPLICATIONS IN INDIA, NO FAULT CAN BE FOUND IN NOT DEDUCTING TAX AT SOURCE FROM THESE PAYMENTS OR, FOR THAT PURPOSE, EVEN NOT APPROACHING THE ASSESSING OFFICER F OR ORDER UNDER SECTION 195. IN OUR CONSIDERED VIEW, THE ASSESSEE, FOR THE DETAILED REASONS SET OUR ABOVE, DID NOT HAVE TAX WITHHOLDING LIABILITY FROM THESE PAYMENTS. AS HELD BY HON'BLE SUPREME COURT IN THE CASE OF GE INDIA TECHNOLOGY CENTRE (P.) LTD. V. CI T [2010] 327 ITR 456/193 TAXMAN 234/7 TAXMANN.COM 18 , PAYER IS BOUND TO WITHHOLD TAX FROM THE FOREIGN REMITTANCE ONLY IF THE SUM PAID IS ASSESSABLE TO TAX IN INDIA. THE ASSESSEE CANNOT, THEREFORE, BE FAULTED FOR NOT APPROACHING THE ASSESSING OFFICER UNDER SECTION 195 EITHER. AS REGARDS THE WITHDRAWAL OF THE CBDT CIRCULAR HOLDING THAT THE COMMISSION PAYMENTS TO NON - RESIDENT AGENTS ARE NOT TAXABLE IN INDIA, NOTHING REALLY TURNS ON THE CIRCULAR, AS DE HORS THE AFORESAID CIRCULAR, WE HAVE ADJUDICATED UPON THE T AXABILITY OF THE COMMISSION AGENT'S INCOME IN INDIA IN TERMS OF THE PROVISIONS OF THE INCOME TAX ACT AS ALSO THE RELEVANT TAX TREATY PROVISIONS. I.T.A NO. 1 4 3 /AHD/20 17 A.Y. 2010 - 11 PAGE NO ACIT VS. M/S. INOX INDIA LTD. 3 42. IN VIEW OF THESE DISCUSSIONS, WE UPHOLD THE RELIEF GRANTED BY THE CIT(A) AND DECLINE TO INTERFERE IN THE MA TTER. 7. WE SEE NO REASON TO TAKE ANY OTHER VIEW OF THE MATTER THAN THE VIEW SO TAKEN BY THE CO - ORDINATE BENCH. RESPECTFULLY FOLLOWING THE DECISION OF CO - ORDINATE BENCH IN THE CASE OF WELSPUN CORP LTD (SUPRA), WE QUASH THE IMPUGNED ORDER AS THE ISSUE ON WHICH THE ORDER OF THE ASSESSING OFFICER SOUGHT TO BE REVISED IS NOW COVERED AGAINST THE REVENUE. IN THE LIGHT OF THE ABOVE FACTS, WE CONSIDER THAT ORDER U/S. 263 WAS THE FOUNDATION ON THE BASIS OF WHICH THE IMPUGNED ORDER U/S. 143(3) R.W.S. 263 DAT E D 30/12/2015 WAS PASSED . THEREFORE, ON C E THE ORDER U/S. 263 HAS BEEN QUASHED AS SUPRA, WE FIND THAT ASSESSMENT ORDER PASSED U/S. 143(3) HAS BECOME INFRUCTUOUS. ACCORDINGLY , THE APPEAL OF THE REVENUE STAND DISMISSED. 5. IN VIEW OF THE ABOVE, THE APPEA L OF THE REVENUE IS DISMISSED. ORDER PR ONOUNCED IN THE OPEN C OURT ON 27 - 09 - 201 8 SD/ - SD/ - ( MAHAVIR PRASAD ) ( AMARJIT SINGH ) JUDICIAL MEMBER ACCOUNTANT MEMBER AHMEDABAD : DATED 27 /09 /2018 / COPY OF ORDER FORWARDED TO: - 1. ASSESSEE 2. REVENUE 3. CONCERNED CIT 4. CIT (A) 5. DR, ITAT, AHMEDABAD 6. GUARD FILE. BY ORDER/ , / ,