DDIT (IT) 2(1), MUMBAI V. SUN LIFE ASSURANCE COMPANY OF CANADA, MUMBAI

ITA 1890/MUM/2013

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 79092 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 3 month(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-06-2014
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: E
• Assessment Year: 2010-2011
• Appeal Filed On: 08-03-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ADGIRI
• Section: 234B

Judgement Text

, INCOME TAX APPELLATE TRIBUNAL,MUMBAI - E BENCH. .. , ! , BEFORE S/SH.I.P.BANSAL, JUDICIAL MEMBE R & RAJENDRA,ACCOUNTANT MEMBER /. ITA NO.1890/MUM/2013, ' ' ' ' # # # # / ASSESSMENT YEAR-2010-11 DDIT (IT) 2(1), R.NO.120, SCINDIA HOUSE, 1ST FLOOR, BALLARD ESTATE, N.M. ROAD, MUMBAI-400038 VS M/S SUN LIFE ASSURANCE COMPANY OF CANADA, 14 1 INDIA BULLS CENTRE TOWER, JUPITER MILLS COMPOUND, SENAPATI BAPAT MARG, LOWER PAREL, MUMBAI-400013 PAN: AAFCS5993L ( $% / APPELLANT) ( &'$% / RESPONDENT) ( ) / REVENUE BY : SHRI B. YADGIRI '*+ '*+ '*+ '*+ ) ) ) ) / ASSESSEE BY : NONE ' ' ' ' ( (( ( +, +, +, +, / DATE OF HEARING : 09-06-2014 -.# ( +, / DATE OF PRONOUNCEMENT : 09-06-2014 ' ' ' ' , 1961 ( (( ( 254 )1( +/+ +/+ +/+ +/+ 0 0 0 0 ORDER U/S.254(1)OF THE INCOME-TAX ACT,1961(ACT) PER RAJENDRA,AM ! ! ! ! ' ' ' ' : CHALLENGING THE ORDER DT. 18.12.2012 OF THE CIT(A)- 11,MUMBAI, ASSESSING OFFICER (AO) HAS RAISED FOLLOWING GROUNDS OF APPEAL: 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE A ND IN LAW, THE LD. CIT(A) ERRED IN DELETING THE INTEREST CHARGED UNDER SECTION 234-B OF THE INC OME-TAX ACT, 1961 WITHOUT APPRECIATING THE FACT THAT EXPLANATION 1(I) OF THE SECTION 234B OF T HE INCOME-TAX ACT, 1961 USED THE EXPRESSION INCOME DEDUCTED OR COLLECTED AT SOURCE. ACCORDINGL Y, MATERIAL IS WHETHER THE TAX AT SOURCE WAS DEDUCTED OR COLLECTED AND IF IT WAS NOT ACTUALL Y COLLECTED OR DEDUCTED, THE LIABILITY TO PAY INTEREST ARISES IN THE INSTANT CASE. 2. THE APPELLANT PRAYS THAT THE ORDER OF THE LD. CIT(A ) BE SET ASIDE ON THE ABOVE GROUNDS AND THAT OF THE ASSESSING OFFICER BE RESTORED. 3. THE APPELLANT CRAVES LEAVE TO AMEND OR ALTER ANY GR OUND OR ADD A NEW GROUND WHICH MAY BE NECESSARY. 2. EFFECTIVE GROUND OF APPEAL IS ABOUT DELETING THE IN TEREST CHARGED BY THE AO U/S 234 OF THE ACT. ASSESSEE-COMPANY, INCORPORATED IN CANADA, IS 100% S UBSIDIARY OF SUN LIFE FINANCIAL INC. AND A TAX RESIDENT OF CANADA UNDER ARTICLE 4 OF DOUBLE TA X AVOIDANCE AGREEMENT BETWEEN INDIA AND CANADA. IT FILED ITS RETURN OF INCOME ON 15.10.2010 DECLARING TOTAL INCOME AT RS. 2,65,05,520/- IN RESPECT OF SERVICE FEES RECEIVED FROM INDIAN COMPAN IES ON WHICH INCOME-TAX LIABILITY WAS COMPUTED AT RS. 40,55,347/-(INCLUSIVE OF INTEREST O F RS.79,520/-).ASSESSEE PAID TAX IN FORM OF SELF ASSESSMENT TAX.VIDE INTIMATION ISSUED U/S.143(1) OF THE ACT, DATED 23.06.2011,TOTAL TAX LIABILITY OF THE ASSESSEE WAS COMPUTED AT RS. 1,32,21,001/- (INC LUSIVE OF INTEREST OF RS. 20,27,730/- U/S. 234B AND 234COF THE ACT). 3 .AGAINST THE INTIMATION ISSUED BY THE DEPARTMENT, A SSESSEE PREFERRED AN APPEAL BEFORE THE FIRST APPELLATE AUTHORITY (FAA),WHO DIRECTED THE AO NOT T O CHARGE INTEREST UNDER SECTION 234 OF THE ACT.FOLLOWING THE JUDGMENT OF HONBLE JURISDICTIONA L HIGH COURT DELIVERED IN THE CASE OF NGC 2 ITA NO. 1890/MUM/2013 M/S SUN LIFE ASSURANCE COMPANY OF CANADA NETWORK ASIA LLC(313 ITR 187),HE ALLOWED THE APPEAL FILED BY THE ASSESSEE.HE FURTHER DIRECTED THE AO TO TAKE APPROPRIATE ACTION AGAINST THE PRAYE R OF NON-DEDUCTION AT TAX AT SOURCE IN CASE THERE WAS A FAILURE. 4. BEFORE US,DEPARTMENTAL REPRESENTATIVE (DR) STATED THAT MATTER COULD BE DECIDED BY THE BENCH. NO ONE HAD APPEARED ON BEHALF OF THE ASSESSEE,AS ST ATED ABOVE.WE HAVE GONE THROUGH THE INTIMATION PASSED U/S 143(1) AND THE ORDER OF THE F AA.WE FIND THAT HONBLE BOMBAY HIGH COURT HAS IN THE CASE OF NGC NETWORK ASIA LLC(SUPRA) HAS HELD AS UNDER: .WHEN A DUTY WAS CAST ON THE PAYER TO DEDUCT THE TAX AT SOURCE, ON FAILURE OF THE PAYER TO DO SO, NO INTEREST COULD BE IMPOSED ON THE ASSESSEE. AS THE FACTS OF THE CASE UNDER CONSIDERATION ARE ID ENTICAL TO THE CASE OF NGC NETWORK ASIA WHEREIN INTEREST LEVIED U/S.234B WAS DIRECTED TO BE DELETED,SO,FOLLOWING THE SAME,WE HOLD THAT THE ORDER OF THE FAA DOES NOT SUFFER FROM ANY LEGAL INF IRMITY.EFFECTIVE GROUND OF APPEAL IS DECIDED AGAINST THE AO. AS A RESULT,APPEA L FILED BY THE AO STANDS DISMISSED. 1+2 '*+ VF/KDKJH VF/KDKJH VF/KDKJH VF/KDKJH ( UKK UKKUKK UKK 3 ( + 45. ORDER PRONOUNCED IN THE OPEN COURT ON 9 TH JUNE,2014 . 0 ( -.# 6 7' 9 TWU , 201 4 . ( / 8 SD/- SD/- ( .. / I.P. BANSAL) ( ! ! ! ! / RAJENDRA) / JUDICIAL MEMBER /ACCOUNTANT MEMBER / MUMBAI, 7' /DATE: 09.06 . 2014. SK 0 0 0 0 ( (( ( &+9 &+9 &+9 &+9 : 9#+ : 9#+ : 9#+ : 9#+ / COPY OF THE ORDER FORWARDED TO : 1. ASSESSEE / $% 2. RESPONDENT / &'$% 3. THE CONCERNED CIT(A)/ ; < , 4. THE CONCERNED CIT / ; < 5. DR E BENCH, ITAT, MUMBAI / 9=/ &+' , . . . 6. GUARD FILE/ / 1 '9+ '9+ '9+ '9+ &+ &+&+ &+ //TRUE COPY// 0' / BY ORDER, > / 4 DY./ASST. REGISTRAR , /ITAT, MUMBAI 3 ITA NO. 1890/MUM/2013 M/S SUN LIFE ASSURANCE COMPANY OF CANADA DATE INITIALS 1. DRAFT DICTATED ON 09.06.2014 2. DRAFT PLACED BEFORE AUTHOR 09.06.2014 3. DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER 4. DRAFT DISCUSSED/APPROVED BY SECOND MEMBER 5. APPROVED DRAFT COMES TO THE SR.PS 6. KEPT FOR PRONOUNCEMENT 7. DATE ON WHICH THE FILE GOES TO THE BENCH CLERK 8. DATE ON WHICH FILE GOES TO THE A.R. FOR SIGNATURE O F THE ORDER 9. DATE OF DISPATCH OF THE ORDER