ADITYA BIRLA NUVO LTD (TREATED AS AGENT OF M/S. NEW CINGULAR WIRELESS SERVICES INC. & MMM HOLDINGS LLC), MUMBAI V. DDIT (IT) 4(1), MUMBAI

ITA 1963/MUM/2012

• Counselvise Citation: [2015] 134 COUNSELVISE.COM (IT) 2382 (ITAT-MUMBAI)
• Duration Of Justice: 3 year(s) 7 month(s) 29 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-11-2015
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 01-10-2015
• Assessment Year: 2006-2007
• Appeal Filed On: 22-03-2012
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: JASBIR S CHOUHAN
• Assessee Lawyers: RONAK G DOSHI
• Keywords: Capital asset

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH A, MUMBAI BEORE SHRI G.S.PANNU, ACCOUNTANT MEMBER AND SHRI RAMLAL NEGI, JUDICIAL MEMBER ITA NO. 1963/MUM/2012 (ASSESSMENT YEAR : 2006-07) ADITYA BIRLA NUVO LIMITED (TREATED AS AGENT OF M/S. NEW CINGULAR WIRELESS SERVICES INC.& MMM HOLDINGS LLC), ADITYA BIRLA CENTRE, A-WING, 4 TH FLOOR, MUMBAI 400 030 PAN:AAACI1747H ... APPELLANT VS. DY.DIRECTOR OF INCOME-TAX (INT.TAX) 4(1), MUMBA. ....... RESPONDENT APPELLANT BY : SHRI RONAK G. DOSHI RESPONDENT BY : SHRI JASBIR S. CH OUHAN DATE OF HEARING : 01/10/2015 DATE OF PRONOUNCEMENT : 20/11/2015 ORDER PER G.S. PANNU,AM: THE CAPTIONED APPEAL FILED BY THE ASSESSEE IS DIRE CTED AGAINST THE ORDER PASSED BY THE CIT(A)-11, MUMBAI DATED 08/12/2 011 PERTAINING TO THE ASSESSMENT YEAR 2006-07, WHICH IN TURN HAS ARIS EN FROM THE ORDER PASSED BY THE DDIT(IT)-4(1) DATED 25/03/2009 UNDER SECTION 163(1) OF THE INCOME TAX ACT, 1961 (IN SHORT THE ACT). 2 ITA NO. 1963/MUM/2012 (ASSESSMENT YEAR : 2006-07) 2. IN THIS APPEAL, THE ASSESSEE HAS RAISED THE FOLL OWING TWO GROUNDS OF APPEAL:- GROUND I: TREATING THE APPELLANT AS AN 'AGENT' OF M/S NEW CINGULAR WIRELESS SERVICES INC., USA UNDER SECTION 163 OF THE ACT 1.1 ON THE FACTS AND IN THE CIRCUMSTANCES OF THE C ASE, THE CIT(A) ERRED IN UPHOLDING THE ACTION OF THE DEPUTY DIRECTOR OF INCO ME-TAX (INTERNATIONAL TAXATION) - 4(1), MUMBAI ('THE AO') IN TREATING THE APPELLANT AS AN 'AGENT' UNDER SECTION 163 OF THE ACT OF M/S. NEW CINGULAR W IRELESS INC., USA (NCWS') IN RESPECT OF THE PURCHASE OF SHARES IN ID EA CELLULAR LIMITED (ICL) FROM M/S. AT &T CINGULAR SERVICES LNC. MAURITIUS (' ATTM'), A WHOLLY-OWNED SUBSIDIARY OF NCWS. 1.2 THE APPELLANT PRAYS THAT THE ACTION OF THE AO OF TREATING THE APPELLANT AS AN 'AGENT' UNDER SECTION 163 OF THE ACT OF CW BE HELD AS INVALID IN LAW. GROUND II: TREATING THE APPELLANT AS AN 'AGENT' OF M/S MMM HOLDINGS LLC ( NOW SUCCEEDED BY NCWS) UNDER SECTION 163 OF THE ACT 2.1 ON THE FACTS AND IN THE CIRCUMSTANCES OF THE C ASE, THE CIT(A) ERRED IN UPHOLDING THE ACTION OF THE AO IN TREATING THE APPE LLANT AS AN 'AGENT' UNDER SECTION 163 OF THE ACT OF M/S. MMM HOLDINGS LLC ('M MMH') (NOW SUCCEEDED BY NCWS) IN RESPECT OF THE PURCHASE OF SH ARES IN ICL FROM ATTM, A WHOLLY-OWNED SUBSIDIARY OF NCWS. 2.2 THE APPELLANT PRAYS THAT THE ACTION OF THE AO OF TREATING THE APPELLANT AS AN 'AGENT' UNDER SECTION 163 OF THE ACT OF MMMH BE HELD AS INVALID IN LAW. 3. THE APPELLANT COMPANY IS INCORPORATED UNDER THE PROVISIONS OF THE COMPANIES ACT, 1956, AND IN ORDER TO APPRECIATE THE CONTROVERSY IN THE PRESENT APPEAL, THE FOLLOWING FACTS ARE RELEVAN T. THE ASSESSEE- COMPANY VIDE AN AGREEMENT DATED 28/09/2005 PURCHASE D 37,17,80,740 SHARES OF IDEA CELLULAR LIMITED( IN SHORT IDEA) FROM AT &T CELLULAR PRIVATE LIMITED, MAURITIUS (ATTM) FOR A CONSIDERATI ON OF USD 150 MILLION. WHILE REMITTING THE CONSIDERATION FOR ACQU ISITION OF SUCH SHARES, NO TAX WAS DEDUCTED AT SOURCE AS ASSESSEE HAD OBTAI NED A CERTIFICATE FROM THE DEPARTMENT FOR NIL TAX DEDUCTION AT SOU RCE. SUBSEQUENTLY, AN ORDER UNDER SECTION 163(1) OF THE ACT WAS PASSE D ON 25/03/2009, 3 ITA NO. 1963/MUM/2012 (ASSESSMENT YEAR : 2006-07) WHEREBY IT WAS NOTICED THAT M/S. NEW CINGULAR WIRE LESS SERVICES INC. USA (HEREAFTER REFERRED TO AS NCWS), WHICH WAS HOLD ING COMPANY OF ATTM WAS THE REAL HOLDERS OF THE SHARES OF IDEA. A S PER THE DEPARTMENT, BY WAY OF THE AGREEMENT DATED 28/09/200 5 IN REALTY SHARES WERE PURCHASED BY THE ASSESSEE FROM NCWS AND NOT FROM ATTM. THEREFORE, AS PER THE DEPARTMENT, THE RESULTANT INC OME ON SUCH A SALE ALSO AROSE, ACCRUED AND WAS RECEIVED BY NCWS. AS PER THE DEPARTMENT, SUCH INCOME WAS TAXABLE IN THE HANDS OF NCWS AS CAPITAL GAIN AS IT INVOLVED TRANSFER OF CAPITAL ASSET SITUA TED IN INDIA, NAMELY THE SHARES OF IDEA. CONSEQUENTLY, THE ASSESSEE WAS TRE ATED AS AN AGENT OF NCWS WITH RESPECT TO THE PAYMENT OF AMOUNT OF USD 1 50 MILLION, WITHIN THE MEANING OF SECTION 163(1) OF THE ACT. 4. SUBSEQUENTLY, VIDE AN ORDER DATED 22/1/2010, THE ASSESSEE HAS ALSO BEEN HELD AS AN AGENT UNDER SECTION 163(1) OF THE ACT OF NCWS AS SUCCESSOR OF M/S.MMM HOLDINGS LLC( IN SHORT MMMH), WHICH LATER ON MERGED WITH NCWS. BOTH THE AFORESAID STANDS OF THE DEPARTMENT HAVE BEEN AFFIRMED BY THE CIT(A), AGAINST WHICH ASSESSEE IS IN APPEAL BEFORE US. 5. BEFORE US, THE LD. REPRESENTATIVE FOR THE ASSESS EE QUITE FAIRLY CONCEDED THAT THE POSITION BROUGHT OUT BY THE CIT( A) IS IN CONSONANCE WITH THE JUDGMENT OF THE HON'BLE BOMBAY HIGH COURT IN THE CASE OF ADITYA BIRLA NUVO LTD. VS. DDIT(IT), 342 ITR 308 (B OM). THE HON'BLE BOMBAY HIGH COURT WHILE DEALING WITH A WRIT PETITIO N FILED BY THE ASSESSEE AGAINST THE ORDERS PASSED UNDER SECTION 16 3(1) OF THE ACT HAD AFFIRMED THE STAND OF THE DEPARTMENT. 4 ITA NO. 1963/MUM/2012 (ASSESSMENT YEAR : 2006-07) 6. FOLLOWING THE AFORESAID PRECEDENT, WE, THEREFORE , DISMISS THE GROUNDS OF APPEAL RAISED BY THE ASSESSEE BECAUSE TH E DECISION OF THE CIT(A) IS IN CONSONANCE WITH THE JUDGMENT OF THE HO N'BLE BOMBAY HIGH COURT IN THE CASE OF ADITYA BIRLA NUVO LTD. (SUPRA ). 7. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS DI SMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 20/11/2015. SD/- SD/- (RAMLAL NEGI) (G.S. PANNU) JUDICIAL MEMBER ACCOUNTANT ME MBER MUMBAI, DATED 20/11/2015 COPY OF THE ORDER FORWARDED TO : 1. THE APPELLANT , 2. THE RESPONDENT. 3. THE CIT(A)- 4. CIT 5. DR, ITAT, MUMBAI 6. GUARD FILE. BY ORDER, //TRUE COPY// (DY./ASSTT. REGISTRAR) ITAT, MUMBAI VM , SR. PS