DCIT 8(3)(1), MUMBAI V. TRANSAMERIC DIRECT MARKETING CONSULTANTS P.LTD, MUMBAI

ITA 1978/MUM/2015

• Counselvise Citation: [2018] 125 COUNSELVISE.COM (IT) 9849 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 11 month(s) 12 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-03-2018
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: L
• Next Hearing Date: 07-06-2017
• Assessment Year: 2010-2011
• Appeal Filed On: 07-04-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: M V RAJGURU
• Assessee Lawyers: NIRAJ SHETHMAHEK GALA
• Keywords: Business income; Double taxation relief; Permanent establishment
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH L, MUMBAI BEFORE SHRI G.S. PANNU, ACCOUNTANT MEMBER AND SHRI RAVISH SOOD , JUDICIAL MEMBER ITA NO. 1978/MUM/2015 : A.Y : 2010 - 11 DCIT - 8(3)(1), MUMBAI (APPELLANT) VS. M/S. TRANSAMERICA DIRECT MARKETING CONSULTANTS PVT. LTD., UNIT NO. 731, LEVEL 7, SOFITEL MUMBAI BKC, OPP. DHIRUBHAI AMBANI INTL. SCHOOL, C - 57, BLOCK - G, BANDRA KURLA COMPLEX, BANDRA (E), MUMBAI 400 051. PAN : AACCT9331L (RESPONDENT) APPELLANT BY : SHRI M.V. RAJGURU RESPONDENT BY : SHRI NIRAJ SHETH/MAHEK GALA DATE OF HEARING : 30/01/2018 DATE OF PRONOUNCEMENT : 19 /0 3 /2018 O R D E R PER G.S. PANNU , AM : THE CAPTIONED APPEAL BY THE REVENUE IS DIRECTED AGAINST THE ORDER OF CIT(A) - 14, MUMBAI DATED 15.12.2014, PERTAINING TO THE ASSESSMENT YEAR 2010 - 11, WHICH IN TURN HAS ARISEN FROM ORDER DATED 28.02.2013 PASSED BY THE ASSESSING OFFICER, MUMBAI U/S 143(3) OF THE INCOME TAX ACT, 1961 (IN SHORT THE ACT). 2. IN THIS APPEAL, THOUGH REVENUE HAS RAISED T WO GROUNDS OF APPEAL, BUT THE SOLITARY GRIEVANCE IS AGAINST THE DECISION OF CIT(A) IN SETTING ASIDE THE 2 ITA NO. 1978/MUM/2015 M/S. TRANSAMERICA DIRECT MARKETING CONSULTANTS PVT. LTD. DISALLOWANCE MADE BY THE ASSESSING OFFICER OF RS.82,92,686/ - BY INVOKING SEC. 40(A)(I) OF THE ACT (WRONGLY STATED IN THE GROUNDS AS 40(A)(IA)). 3. IN O RDER TO APPRECIATE THE CONTROVERSY, THE FACTS CAN BE SUMMARISED AS FOLLOWS. THE RESPONDENT - ASSESSEE IS A COMPANY INCORPORATED UNDER THE PROVISIONS OF THE COMPANIES ACT, 1956 AND IS, INTER - ALIA , ENGAGED IN THE BUSINESS OF CARRYING OUT DIRECT MARKETING ACTIVITIES IN INDIA AS WELL AS BUSINESS OF MANAGEMENT, SCIENTIFIC, TECHNICAL AND ADVISORY CONSULTANCY SERVICES. THE RESPONDENT - ASSESSEE HAS A SERVICE AGREEMENT DATED 01.07.2008 WITH AEGON DIRECT M ARKETING SERVICES INTERNATIONAL, INC (ADMSI), A U.S BASED ASSOCIATE CONCERN. FOR THE SERVICES PROVIDED TO THE ASSESSEE IN TERMS OF THE SERVICE AGREEMENT, ASSESSEE PAID A SUM OF RS.1,89,27,054/ - TO ADMSI. THE ASSESSING OFFICER NOTED THAT ASSESSEE HAD DE DUCTED TAX AT SOURCE ONLY ON A PORTION OF THE PAYMENTS MADE TO ADMSI. ON BEING ASKED TO JUSTIFY, ASSESSEE EXPLAINED THAT ADMSI WAS PROVIDING SERVICES TO THE ASSESSEE WHICH, INTER - ALIA , INCLUDED CARRYING ON OF ACTIVITIES IN INDIA AND THAT TAX WAS DEDUCTED AT SOURCE AT THE MAXIMUM RATE OF 41.2% (I.E. 40% + EDUCATION CESS @ 3%) ONLY IN RELATION TO THE COMPONENT RELATING TO SUCH ACTIVITIES. SO FAR AS THE PAYMENT MADE FOR THE SERVICES RENDERED TO THE ASSESSEE FROM OUTSIDE INDIA, I.E. FROM U.S.A, NO TAX WAS DED UCTED AT SOURCE. IN OTHER WORDS, THE STAND OF THE ASSESSEE WAS THAT SO FAR AS THE ACTIVITIES CARRIED OUT BY THE U.S ENTITY IN INDIA WAS CONCERNED, IT CONSTITUTED A SERVICE PERMANENT ESTABLISHMENT (PE) AND THE PROFITS ATTRIBUTABLE TO SUCH ACTIVITY WAS ALON E TAXABLE IN INDIA IN VIEW OF ARTICLE 7(1) OF THE INDO - US DTAA AND ACCORDINGLY, TAX WAS DEDUCTED AT SOURCE ON SUCH PAYMENT. WITH RESPECT TO SERVICES RENDERED FROM OUTSIDE INDIA, I.E. FROM U.S.A, THE PROFITS ATTRIBUTABLE TO THE SAME COULD NOT BE TREATED AS ATTRIBUTABLE TO THE PE OF 3 ITA NO. 1978/MUM/2015 M/S. TRANSAMERICA DIRECT MARKETING CONSULTANTS PVT. LTD. ADMSI IN INDIA AND THUS, THE SAME WERE NOT TAXABLE IN INDIA AND THUS, OUTSIDE THE PURVIEW OF DEDUCTION OF TAX AT SOURCE. THE SUBMISSIONS OF THE ASSESSEE HAVE INDEED BEEN EXTRACTED BY THE ASSESSING OFFICER IN THE ASSESSMENT ORDER WHICH ALSO, INTER - ALIA , CONTAINS REFERENCE AND RELIANCE ON VARIOUS DECISIONS INCLUDING THAT OF THE HON'BLE SUPREME COURT IN THE CASE OF ISHIKAWAJIMA - HARIMA HEAVY INDUSTRIES LTD. VS. DIT, 228 ITR 408 (SC) AND ALSO THE DECISION OF THE MUMBAI BENCH OF THE TR IBUNAL IN THE CASE OF WNS NORTH AMERICA INC., ITA NO. 8621/MUM/2010 DATED 14.12.2012 . HOWEVER, THE ASSESSING OFFICER, IN A CRYPTIC ORDER, NOT ACCEPTED THE SUBMISSIONS PUT FORTH BY THE ASSESSEE. THE RELEVANT DISCUSSION IN THE ASSESSMENT ORDER SHOWS THAT T HE ONLY POINT RAISED BY THE ASSESSING OFFICER IS THAT THE TAX OUGHT TO HAVE BEEN DEDUCTED AT SOURCE ON THE ENTIRE PAYMENTS, INCLUDING PAYMENT MADE FOR SERVICES RENDERED BY ADMSI FROM OUTSIDE INDIA, I.E. FROM U.S.A, BECAUSE THE ASSESSEE HAS BEEN BENEFITTED FROM RENDERING OF SUCH SERVICES ALSO. FOR THE SAID REASON, THE ASSESSING OFFICER HELD THAT RENDERING OF SERVICES FROM OUTSIDE INDIA SHOULD ALSO BE ATTRIBUTABLE TO THE PE OF ADMSI IN INDIA AND, THEREFORE, ACCORDING TO HIM, SUCH PAYMENTS WERE ALSO LIABLE FO R TAXATION IN INDIA, THEREBY INVITING THE PROVISIONS WHICH REQUIRE DEDUCTION OF TAX AT SOURCE. ACCORDINGLY, THE AMOUNT OF RS.82,92,686/ - , WHICH WAS ACCEPTED AS BEING PAID TOWARDS SERVICES RENDERED FROM OUTSIDE INDIA, WAS HELD BY THE ASSESSING OFFICER TO B E LIABLE FOR DEDUCTION OF TAX AT SOURCE IN INDIA, AND IN THE ABSENCE OF THE REQUISITE TAX HAVING BEEN DEDUCTED AT SOURCE BY THE ASSESSEE, THE ASSESSING OFFICER INVOKED SEC. 40(A)(I) OF THE ACT AND DISALLOWED THE SAME. THIS DISALLOWANCE WAS CHALLENGED BY T HE ASSESSEE IN APPEAL BEFORE THE CIT(A) PRIMARILY REITERATING THE SAME SUBMISSIONS AS WERE RAISED BEFORE THE ASSESSING OFFICER. THE CIT(A) NOTED THAT THE ASSESSING OFFICER ACCEPTED THE POSITION THAT SERVICES WERE RENDERED BY ADMSI BOTH, 4 ITA NO. 1978/MUM/2015 M/S. TRANSAMERICA DIRECT MARKETING CONSULTANTS PVT. LTD. FROM OUTSIDE INDIA AS WELL AS WITHIN INDIA. THE CIT(A) HAS REFERRED TO THE DECISION OF THE HON'BLE SUPREME COURT IN THE CASE OF ISHIKAWAJIMA - HARIMA HEAVY INDUSTRIES LTD. (SUPRA) AS WELL AS THE DECISION OF THE TRIBUNAL IN THE CASE OF WNS NORTH AMERICA INC. (SUPRA) AND DIT(I T) VS. MORGAN STANLEY & CO., 292 ITR 416 AND CONCLUDED THAT THERE WAS NO NEED FOR THE ASSESSEE TO DEDUCT TAX AT SOURCE ON THE PAYMENTS MADE FOR SERVICES WHICH HAVE BEEN RENDERED BY THE U.S ENTITY FROM OUTSIDE INDIA. IN COMING TO SUCH A CONCLUSION, THE CIT (A) HAS REFERRED TO THE PROVISIONS OF INDIA - U.S .A DTAA , THOUGH THE SPECIFIC CLAUSE OF THE DTAA HAVE NOT BEEN SPELT - OUT BY HIM. IN SUM AND SUBSTANCE, THE CONCLUSION OF THE CIT(A) IS THAT ASSESSEE WAS NOT REQUIRED TO DEDUCT TAX AT SOURCE ON PAYMENTS FOR SER VICES RENDERED BY THE U.S ENTITY FROM OUTSIDE INDIA AND ACCORDINGLY, HE DELETED THE DISALLOWANCE MADE BY THE ASSESSING OFFICER BY RELYING ON SEC. 40(A)(I) OF THE ACT. AGAINST SUCH A DECISION, REVENUE IS IN APPEAL BEFORE US. 4. BEFORE US, THE LD. DR HAS N OT DISPUTED THE FACTUAL MATRIX, BUT HAS CONTENDED THAT EVEN THE PAYMENT MADE FOR SERVICES RENDERED TO ASSESSEE FROM OUTSIDE INDIA WOULD CONSTITUTE INCOME DEEMED TO HAVE ACCRUED IN INDIA IN THE HANDS OF THE PAYEE SINCE SUCH ACTIVITIES COULD NOT BE SEGREGATE D FROM THE ACTIVITIES OF RENDERING SERVICES FROM INDIA CONSIDERING THE FACT THAT THERE IS A SERVICE PE OF THE RECIPIENT U.S ENTITY IN INDIA. IN SUPPORT OF SUCH A PROPOSITION, HE HAS RELIED UPON THE DECISION OF THE DELHI BENCH OF THE TRIBUNAL IN THE CASE O F SNC/ACRES VS. DEPUTY COMMISSIONER, [1996] 57 ITD 419 (DELHI) . 5 ITA NO. 1978/MUM/2015 M/S. TRANSAMERICA DIRECT MARKETING CONSULTANTS PVT. LTD. 5. ON THE OTHER HAND, THE LEARNED REPRESENTATIVE FOR THE RESPONDENT - ASSESSEE VEHEMENTLY POINTED OUT THAT THE CIT(A) HAS MADE NO MISTAKE IN CONCLUDING THAT THE PAYMENTS MADE FOR SERVICES RENDE RED TO THE ASSESSEE FROM OUTSIDE INDIA CANNOT BE ATTRIBUTABLE TO THE PE OF THE U.S ENTITY IN INDIA BECAUSE OF THE FACT THAT SUCH SERVICES ARE ADMITTEDLY RENDERED FROM OUTSIDE INDIA. IN THIS CONTEXT, HE HAS TAKEN US THROUGH THE PHRASEOLOGY OF ARTICLE 7 OF THE INDIA - U.S DTAA ; AND, A CCORDING TO HIM, IN TERMS OF ARTICLE 7(1), THE PROFITS OF AN U.S ENTERPRISE IS TAXABLE IN INDIA ONLY IN A SITUATION WHERE SUCH ENTERPRISE CARRIES ON BUSINESS IN INDIA THROUGH A PE. ACCORDING TO HIM, NO DOUBT, THERE IS A SERVICE P E OF ADMSI IN INDIA, BUT HE REFERRED TO THE LATTER PART OF ARTICLE 7(1) TO POINT OUT THAT ONLY THE PROFITS ATTRIBUTABLE TO THE PE OR THE PROFITS ATTRIBUTABLE TO ANY OTHER BUSINESS ACTIVITIES CARRIED ON IN INDIA OF THE SAME OR SIMILAR KIND AS THOSE EFFECTED THROUGH THE PE CAN ALONE BE BROUGHT TO TAX IN INDIA. ACCORDING TO HIM, FACTUALLY THE ASSESSING OFFICER AS WELL AS THE CIT(A) DO NOT DISPUTE THE POSITION THAT, IN THE PRESENT CASE, THE AMOUNT OF RS.82,92,686/ - WHICH IS DISALLOWED , REPRESENTS PAYMENT FOR A CTIVITIES CARRIED ON IN THE COURSE OF PROVIDING OF SERVICES BY THE U.S ENTITY FROM OUTSIDE INDIA. IT HAS ALSO BEEN POINTED OUT THAT THE SAID PROPOSITION HAS BEEN NOTED BY THE MUMBAI BENCH OF THE TRIBUNAL IN THE CASE OF WNS NORTH AMERICA INC. (SUPRA) FOR A SSESSMENT YEAR 2006 - 07, AND WHICH HAS BEEN FURTHER APPROVED BY THE HON'BLE BOMBAY HIGH COURT VIDE ITS ORDER DATED 24.03.2015 IN ITA NO. 1269 OF 2013 (COPIES OF THE ORDERS HAVE BEEN PLACED ON RECORD). IT IS POINTED OUT THAT A SIMILAR SITUATION EXISTED IN T HE CASE OF WNS NORTH AMERICA INC. (SUPRA) FOR ASSESSMENT YEAR 2007 - 08 WHEREIN THE ORDER OF THE TRIBUNAL REPORTED IN [2014] 146 ITD 435 HAS BEEN AGAIN APPROVED BY THE HON'BLE BOMBAY HIGH COURT VIDE ORDER DATED 24.03.2017 IN ITA NO. 461 OF 2014. 6 ITA NO. 1978/MUM/2015 M/S. TRANSAMERICA DIRECT MARKETING CONSULTANTS PVT. LTD. 6. INSOFAR A S THE RELIANCE PLACED BY THE LD. DR ON THE DECISION IN THE CASE OF SNC/ACRES (SUPRA) IS CONCERNED, THE LEARNED COUNSEL CONTENDED THAT THE SAME DEALT WITH PAYMENTS IN THE HANDS OF NON - RESIDENT RECIPIENTS, WHICH WERE IN THE NATURE OF FEES FOR TECHNICAL SERV ICES GOVERNED BY SEC. 9(1)(VII) OF THE ACT, WHEREAS ACCORDING TO HIM, THE INSTANT SITUATION IS RELATING TO BUSINESS RECEIPTS GOVERNED BY SEC. 9(1)(I) OF THE ACT. DRAWING DISTINCTION BETWEEN THE OPERATION OF SEC. 9(1)(VII) AND 9(1)(I) OF THE ACT, THE LEAR NED REPRE SENTATIVE POINTED OUT THAT THE E XPLANATION BELOW SEC. 9(2) OF THE ACT AS INSERTED BY THE FINANCE ACT,2010 W.R.E.F. 01.06.1976 PRESCRIBES THAT FOR THE PURPOSES OF CLAUSE (VII) OF SEC. 9(1) , INCOME OF A NON - RESIDENT SHALL BE DEEMED TO ACCRUE OR ARIS E IN INDIA, INTER - ALIA , EVEN IN A SITUATION WHERE THE NON - RESIDENT HAS NOT RENDERED SERVICES IN INDIA. IN OTHER WORDS, THE LEARNED REPRESENTATIVE POINTED OUT THAT SO FAR AS THE TREATMENT OF FEES FOR TECHNICAL SERVICES GOVERNED BY SEC. 9(1)(VII) READ WIT H EXPLANATION THEREOF IS CONCERNED, THE SOURCE OF PAYMENT, BEING FROM A RESIDENT, IS OF PARAMOUNT IMPORTANCE TO EVALUATE THE TAXABILITY IN THE HANDS OF THE NON - RESIDENT RECIPIENT IRRESPECTIVE OF THE PLACE FROM WHERE THE SERVICES HAVE BEEN RENDERED. ON THE CONTRARY, THE EXPLANATION BELOW SEC. 9(2) OF THE ACT DOES NOT TAKE INTO ITS FOLD SEC. 9(1)(I) OF THE ACT, WHICH IS RELEVANT FOR THE PRESENT CONTROVERSY. ACCORDING TO HIM, THE DECISION OF THE DELHI BENCH OF THE TRIBUNAL IN THE CASE OF SNC/ACRES (SUPRA) DEALS WITH RECEIPTS ON ACCOUNT OF TECHNICAL SERVICES RENDERED BY A NON - RESIDENT TO INDIAN CONCERN WHICH ATTRACTS SEC. 9(1)( V II) OF THE ACT AND, THEREFORE, THE SAME DOES NOT GOVERN THE INSTANT SITUATION, WHICH RELATES TO TAXABILITY OF BUSINESS PROFITS IN TH E HANDS OF RECIPIENT NON - RESIDENT IN TERMS OF ARTICLE 7 OF THE INDIA - U.S DTAA AS WELL AS SEC. 9(1)(I) OF THE ACT. 7 ITA NO. 1978/MUM/2015 M/S. TRANSAMERICA DIRECT MARKETING CONSULTANTS PVT. LTD. 7. WE HAVE CAREFULLY CONSIDERED THE RIVAL SUBMISSIONS. WE HAVE ALSO PERUSED CAREFULLY THE RELEVANT DISCUSSION AND FINDINGS IN THE ORDERS OF THE AUTHORITIES BELOW AS WELL AS OTHER MATERIAL ON RECORD, NAMELY, THE SERVICE AGREEMENT BETWEEN ASSESSEE AND ADMSI IN TERMS OF WHICH THE IMPUGNED PAYMENTS HAVE BEEN MADE. BROADLY SPEAKING, THE SERVICE AGREEMENT BETWEEN THE ASSESSEE AND ADMSI ENVISAGED PR OVIDING OF VARIOUS SERVICES TO ASSESSEE IN THE FORM OF INFORMATION SUPPORT SYSTEM, MARKETING AND NEW BUSINESS DEVELOPMENT, NEW PRODUCT DEVELOPMENT, ACTUARIAL SERVICES, ACCOUNTING SUPPORT SERVICES, INTERNAL AUDIT SERVICES, ETC. WITHOUT GOING INTO MUCH DETA IL, IT WOULD SUFFICE TO INFER THAT ADMSI WAS CONTRACTED BY THE ASSESSEE TO RENDER VARIOUS SUPPORT SERVICES. AT THE TIME OF HEARING, THE LEARNED REPRESENTATIVE ALSO REFERRED TO THE PAPER BOOK WHEREIN IS PLACED COPIES OF WRITTEN SUBMISSIONS DATED 29.01.2013 , 06.02.2013, 19.02.2013 AND 26.02.2013 ADDRESSED TO THE ASSESSING OFFICER AT PAGES 1 TO 72, WHICH COMPLETELY CLEARS THE STAND OF THE ASSESSEE. BE THAT AS IT MAY, THE DISCUSSION BY THE ASSESSING OFFICER CLEARLY BRINGS OUT THAT HE DOES NOT DISPUTE THAT THE SERVICES HAVE BEEN RENDERED BY ADMSI WITH IN INDIA AS WELL AS THROUGH ACTIVITIES UNDERTAKEN OUTSIDE INDIA. INSOFAR AS THE FORMER IS CONCERNED, ASSESSEE HAS TREATED THE SAME AS TAXABLE IN INDIA AND HAS DEDUCTED THE REQUISITE TAX @ 41.2%. IT IS ONLY IN THE CASE OF PAYMENTS RELATABLE TO THE LATTER TYPE OF SERVICES , WHERE THE ASSESSING OFFICER HAS JOINED ISSUE WITH THE ASSESSEE AS, ACCORDING TO HIM, SUCH AMOUNT IS ALSO AN INCOME LIABLE TO BE TAXED IN INDIA AND, THUS REQUIRING DEDUCTION OF TAX AT SOURCE . THE ONLY REASON ADVANCED BY HIM IS THAT SUCH PAYMENTS HAVE ALSO BENEFITTED THE ASSESSEE IN INDIA AND, THEREFORE, THE SAME ARE LIABLE TO BE TAXED IN INDIA. AT THIS POINT, WE MAY EMPHASISE THE FACT THAT THE AMOUNT PAID BY THE ASSESSEE TO ADMSI AS PER SERVICE AG REEMENT IS IN THE NATURE OF BUSINESS PROFITS 8 ITA NO. 1978/MUM/2015 M/S. TRANSAMERICA DIRECT MARKETING CONSULTANTS PVT. LTD. COVERED BY ARTICLE 7 OF INDIA - U.S DTAA AND SEC. 9(1)(I) OF THE ACT , WHICH IS NOT DISPUTED BY THE ASSESSING OFFICER. THIS BECOMES CLEAR BY IMPLICATION AS THE ONLY POINT MADE OUT BY THE ASSESSING OFFICER IS THA T SINCE THE BENEFICIARY OF THE SERVICES RENDERED FROM OUTSIDE INDIA IS LOCATED IN INDIA, I.E. THE ASSESSEE, THEREFORE, THE SAME IS LIABLE TO BE TAXED IN INDIA. OSTENSIBLY, SUCH A TEST IS RELEVANT FOR THE PURPOSE OF EVALUATING THE TAXABILITY OF FEES FOR T ECHNICAL SERVICES IN THE HANDS OF NON - RESIDENT RECIPIENT, AND NOT IN THE CONTEXT OF EITHER SEC. 9(1)(I) OF THE ACT OR ARTICLE 7 OF THE INDIA - U.S DTAA , WHICH IS THE SITUATION BEFORE US . THEREFORE, WE PROCEED FURTHER IN THE AFORESAID FACTUAL BACKGROUND. I N THE CASE OF WNS NORTH AMERICA INC. (SUPRA) , THE TRIBUNAL WAS CONSIDERING A SITUATION WHERE ASSESSEE, A NON - RESIDENT, HAD RECEIVED CERTAIN SUM TOWARDS MARKETING AND MANAGEMENT FEE FROM INDIAN CONCERN BOTH FOR PROVIDING SUCH SERVICES IN INDIA AS WELL AS FR OM OUTSIDE INDIA. IN THE CONTEXT OF THE AMOUNT RECEIVED FOR RENDERING OF MARKETING AND MANAGEMENT SERVICES FROM OUTSIDE INDIA, THE TRIBUNAL HELD THAT THE SAME COULD NOT BE SUBJECTED TO TAX IN INDIA BECAUSE SUCH INCOME COULD NOT BE SAID TO ACCRUE OR ARISE OR DEEMED TO ACCRUE OR ARISE TO ASSESSEE IN INDIA. IT REACHED THE SAID CONCLUSION AFTER NOTICING THAT EVEN THE EXISTENCE OF A SERVICE PE IN INDIA WILL NOT MAKE IT TAXABLE BECAUSE OF NON - INVOLVEMENT OF THE PE IN EARNING OF THE INCOME FOR WHICH THE SERVICES WERE RENDERED FROM OUTSIDE INDIA. NOTABLY, THE SAID DECISION TRAVELLED TO THE HON'BLE BOMBAY HIGH COURT IN AN APPEAL PREFERRED BY THE REVENUE, WHICH HAS SINCE BEEN DISMISSED BY THE HON'BLE HIGH COURT VIDE ORDER DATED 24.03.2015 (SUPRA). IN OUR CONSIDERE D OPINION, THE SAID DECISION FULLY COVERS THE CONTROVERSY IN THE INSTANT CASE INASMUCH AS, FACTUALLY SPEAKING, ASSESSEE HAD ASSERTED BEFORE THE ASSESSING OFFICER, WHICH IS EVIDENT FROM THE COPY OF WRITTEN SUBMISSIONS ON RECORD AND WHOSE RELEVANT PORTION HA S ALSO BEEN 9 ITA NO. 1978/MUM/2015 M/S. TRANSAMERICA DIRECT MARKETING CONSULTANTS PVT. LTD. REPRODUCED BY THE ASSESSING OFFICER IN THE ASSESSMENT ORDER, THAT THE IMPUGNED PAYMENTS ARE IN RELATION TO SERVICES WHICH HAVE BEEN RENDERED BY THE U.S ENTITY FROM OUTSIDE INDIA AND THERE IS NO CHARGE MADE AGAINST THE ASSESSEE BY THE ASSESSING OFFICER THAT THERE IS ANY INVOLVEMENT OF ASSESSEES PE IN INDIA FOR THE PURPOSES OF RENDERING OF SUCH SERVICES FROM OUTSIDE INDIA . IN FACT, AT THE TIME OF HEARING, THE LEARNED REPRESENTATIVE POINTED OUT THAT SO FAR AS THE SERVICES RENDERED BY THE EMPLOYEE S OF ADMSI DEPUTED IN INDIA WERE CONCERNED, THE SAME HAVE BEEN CONSIDERED TO BE TAXABLE, BEING ATTRIBUTABLE TO THE SERVICE PE IN INDIA. ONLY IN SITUATIONS WHERE THE EMPLOYEES OF ADMSI HAVE RENDERED SERVICE S TO THE ASSESSEE FROM OUTSIDE INDIA, THE CORRESPONDING PAYMENTS HAVE BEEN HELD NOT ATTRIBUTABLE TO THE PE IN INDIA AND THUS, NOT LIABLE TO BE TAXED IN INDIA. IN OUR VIEW, THE AFORESAID FACTUAL DISTINCTION BROUGHT OUT BY THE ASSESSEE IS SUPPORTED BY THE MA TERIAL ON RECORD INASMUCH AS WE HAVE ALSO BEEN TAKEN THROUGH THE COPIES OF THE SERVICE AGREEMENT AND OTHER CORRESPONDENCE, WHICH BRING S OUT THE VARIOUS SERVICES BEING RENDERED BY ADMSI TO THE ASSESSEE. THEREFORE, ON FACTS, AND IN VIEW OF THE LEGAL POSITIO N DISCUSSED ABOVE, WE FIND NO REASONS TO INTERFERE WITH THE ULTIMATE CONCLUSION DRAWN BY THE CIT(A) OF SETTING ASIDE THE DISALLOWANCE MADE BY TH E ASSESSING OFFICER U/S 40(A)(I ) OF THE ACT. THUS, THE REVENUE FAILS IN ITS APPEAL. 8. IN THE RESULT, APPEAL OF THE REVENUE IS DISMISSED , AS AB OVE . ORDER PRONOUNCED IN THE OPEN COURT ON 19 TH MARCH, 2018. SD/ - SD/ - (RAVISH SOOD) JUDICIAL MEMBER (G.S. PANNU) ACCOUNTANT MEMBER MUMBAI, DATE : 19 TH MARCH, 201 8 *SSL* 10 ITA NO. 1978/MUM/2015 M/S. TRANSAMERICA DIRECT MARKETING CONSULTANTS PVT. LTD. COPY TO : 1) THE APPELLANT 2) THE RESPONDENT 3) THE CIT(A) CONCERNED 4) THE CIT CONCERNED 5) THE D.R, L BENCH, MUMBAI 6) GUARD FILE BY ORDER DY./ASSTT. REGISTRAR I.T.A.T, MUMBAI