ACIT, CHENNAI V. Matrimony.Com Pvt. Ltd., CHENNAI

ITA 1484/CHNY/2015

• Counselvise Citation: [2016] 121 COUNSELVISE.COM (IT) 2681 (ITAT-CHENNAI)
• Duration Of Justice: 6 month(s) 25 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-01-2016
• Appeal Filed By: Department
• Bench Allotted: A
• Next Hearing Date: 05-01-2016
• Assessment Year: 2009-2010
• Appeal Filed On: 18-06-2015
• Court: TRIBUNAL
• Department Lawyers: PATHLAVATH PEERYA CIT CR
• Keywords: Double taxation relief; Services rendered outside India; Permanent establishment

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH, CHENNAI ... , . , , BEFORE SHRI N.R.S.GANESAN, JUDICIAL MEMBER AND SHRI A.MOHAN ALANKAMONY, ACCOUNTANT MEMBER ./ I.T.A.NO.1484 /MDS./2015 ( ! '! / ASSESSMENT YEAR :2009-10) DEPUTY COMMISSIONER OF INCOME TAX, COMPANY CIRCLE IV(1), CHENNAI. VS. M/S.MATRIMONY .COM PVT. LTD., 94,TVH BELICAA TOWERS, 10 TH FLOOR, TOWER-II, MRC NAGAR, MANDAVELI, CHENNAI 600 028. PAN AADCM 0845 M ( / APPELLANT ) ( / RESPONDENT ) #$ % & / APPELLANT BY : MR.PATHLAVATH PEERYA CIT CR '(#$ % & / RESPONDENT BY : MR.S.P.CHIDAMBARAM ADVOCATE ) * % +, / DATE OF HEARING : 05.01.2016 -' % +, /DATE OF PRONOUNCEMENT : 13.01.2016 / O R D E R PER A.MOHAN ALANKAMONY , ACCOUNTANT MEMBER: THIS APPEAL IS FILED BY THE REVENUE, AGGRIEVED BY THE ORDER OF THE LEARNED COMMISSIONER OF INCOME TAX(A)-I, CHENNA I DATED 18.02.2015 IN ITA NO.466/13-14/A-1 (NEW NO.ITA99/CI T(A)/2013-14) ITA NO. 1484/MDS/2015 2 PASSED UNDER SEC.143(3) READ WITH SECTION.92CA & S EC. 250 OF THE ACT. 2. THE REVENUE HAS RAISED THREE ELABORATE GROUNDS IN ITS APPEAL, HOWEVER THE CRUX OF THE ISSUE IS THAT THE REVENUE I S AGGRIEVED BY THE ORDER OF THE LD. CIT (A), WHO HAD DELETED THE DISAL LOWANCE OF WEBHOSTING AND MARKETING EXPENSES TO THE TUNE OF ` 4,17,50,047/- MADE U/S./40(A)(IA) R.W.S 195 OF THE ACT. 3. AT THE OUTSET, THE LD. A.R. SUBMITTED BEFORE US THAT IN THE REVENUES APPEAL IN THE ASSESSEES OWN CASE FOR THE ASSESSMENT YEAR 2008-09 IN ITA NO.2441/MDS./2014 ON THE IDENTI CAL ISSUE, THE BENCH HAS HELD THAT, ANY PAYMENT MADE OUTSIDE INDIA , FOR SERVICES RENDERED OUTSIDE INDIA, WILL NOT BE TAXABLE IN INDI A. HENCE, PROVISIONS OF SECTION 40(A)(IA) OF THE ACT CANNOT BE INVOKED. THE LD. D.R COULD NOT CONTROVERT TO THE SUBMISSIONS OF THE LD. A.R. 4. WE HAVE HEARD BOTH THE PARTIES AND CAREFULLY PE RUSED THE MATERIALS AVAILABLE ON RECORD AND THE DECISION OF T HE TRIBUNAL IN THE ASSESSEES OWN CASE FOR THE ASSESSMENT YEAR 2008-09 MENTIONED HEREIN ABOVE. WE FIND MERIT IN THE SUBMISSIONS OF THE LD. A.R. AS ARGUED BY THE LD. A.R., ON THE IDENTICAL ISSUE IN T HE ASSESSEES OWN ITA NO. 1484/MDS/2015 3 CASE FOR THE ASSESSMENT YEAR 2008-09, IT HAS BEEN C ATEGORICALLY HELD THAT, WHEN PAYMENTS ARE MADE OUTSIDE INDIA, FOR SER VICES RENDERED OUTSIDE INDIA, WILL NOT BE TAXABLE IN INDIA. ACCORD INGLY PROVISIONS OF SECTION 40(A)(IA) OF THE ACT CANNOT BE INVOKED, BEC AUSE THE PROVISIONS OF TAX DEDUCTED AT SOURCE U/S. 195 WILL NOT BE APPLICABLE. THE RELEVANT PORTION OF THE ORDER IS REPRODUCED BEL OW FOR REFERENCE:- 6. WE HAVE HEARD BOTH THE PARTIES AND CAREFULLY PERUSED THE MATERIALS AVAILABLE ON RECORD. IT IS EVIDENT FROM THE FACTS OF THE CASE THAT THE ASSESSEE HAD MADE PAYMENTS FOR WEBHOSTING CHARGES A ND MARKETING EXPENSES OUTSIDE INDIA AND FOR SERVICES RENDERED OU TSIDE INDIA. THESE EXPENSES WERE EARLIER MADE BY THE ASSESSEE SUBSIDIA RY AND LATER IT WAS REIMBURSED BY THE ASSESSEE. THE HONBLE JURISDICTIO NAL HIGH COURT IN THE CASE OF M/S.FAIZAN SHOES PVT LTD., REPORTED IN 367 ITR 155 (MAD.), HAS HELD THAT ANY PAYMENT MADE OUTSIDE INDIA FOR SERVIC ES RENDERED OUTSIDE INDIA WILL NOT BE TAXABLE IN INDIA. FROM THE FACTS OF THE CASE, IT IS ALSO EVIDENT THAT THE ASSESSEE HAS NOT MADE ANY PAYMENT TOWARDS ROYALTY OR TECHNICAL SERVICES RENDERED OUTSIDE INDIA. THEREFOR E THE CASE OF THE ASSESSEE FALLS OUTSIDE THE SCOPE OF DTAA. THE PART IES, WHO HAVE RENDERED SERVICES TO THE ASSESSEE OUTSIDE INDIA, DO NOT HAVE ANY PERMANENT ESTABLISHMENT (PE) IN INDIA. IN THESE CI RCUMSTANCES, TAKING INTO CONSIDERATION OF THE HONBLE JURISDICTIONAL HI GH COURT IN THE CASE ITO VS. FAIZAN SHOES PVT. LTD., (SUPRA), WE HEREBY CONF IRM THE ORDER OF THE LD. CIT (A). ACCORDINGLY, ADDITION MADE BY LD. ASSESSI NG OFFICER STANDS DELETED. ITA NO. 1484/MDS/2015 4 FOLLOWING THE DECISION OF THE TRIBUNAL IN ASSESSE ES OWN CASE FOR THE ASSESSMENT YEAR 2008-09, THIS ISSUE IS DECI DED IN FAVOUR OF THE ASSESSEE. 5. IN THE RESULT, THE APPEAL OF REVENUE IS DISMISSE D. ORDER PRONOUNCED ON THE 13 TH JANUARY,2016 AT CHENNAI. SD/- SD/- ( . . . ) ( N.R.S.GANESAN ) ( . '#$ %' ) (A.MOHAN ALANKAMONY) JUDICIAL MEMBER ACCOUNTANT MEMBER CHENNAI, DATED 13 TH JANUARY, 2016. K S SUNDARAM. % '+./ 0 /'+ /COPY TO: 1. #$ /APPELLANT 2. '(#$ /RESPONDENT 3. ) 1+ () /CIT(A) 4. ) 1+ /CIT 5. /4 '+5 /DR 6. 6! 7* /GF