Deputy Commissioner of Income-tax, V. Imerys Asia Pacific Pvt. Ltd., Pune

ITA 2335/PUN/2016

• Counselvise Citation: [2018] 125 COUNSELVISE.COM (IT) 4363 (ITAT-PUNE)
• Duration Of Justice: 1 year(s) 10 month(s) 2 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-08-2018
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2012-2013
• Appeal Filed On: 06-10-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: MRS SHWETA MISHRA
• Keywords: Double taxation relief

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH, PUNE . , , , BEFORE SHRI D. KARUNAKARA RAO, AM AND SHRI VIKAS AWASTHY, JM . / ITA NO . 2 335 /P U N/201 6 / ASSESSMENT YEAR : 20 12 - 13 DEPUTY COMMISSIONER OF INCOME TAX, ( INTERNATIONAL TAXATION ) 1, PUNE ....... / APPELLANT / V/S. IMERYS ASIA PACIFIC PVT. LTD., UNIT NO. 403, 4 TH FLOOR, SAI CAPITAL, SENAPATI BAPAT ROAD, SHIVAJI N AGAR, PUNE 411016 PAN : AABCI2170F / RESPONDENT ASSESSEE BY : S HRI RAJENDRA AGIWAL REVENUE BY : MRS. SHWETA MISHRA / DATE OF HEARING : 3 0 - 07 - 201 8 / DATE OF PRONOUNCEMENT : 08 - 0 8 - 201 8 / ORDER PER VIKAS AWASTHY, JM : TH IS APPEAL BY THE REVENUE IS DIRECTED AGAINST THE ORDER OF COMMI SSIONER OF INCOME TAX (APPEALS) - 13, PUNE DATED 19 - 07 - 2016 FOR THE ASSESSMENT YEAR 201 2 - 13. 2. THE REVENUE HAS ASSAILED THE ORDER OF COMMISSIONER OF INCOME TAX (APPEALS) BY RAISING FOLLOWING GROUNDS : 2 ITA NO . 2335/PUN/2016, A.Y. 2012 - 13 1. THE LD. CIT(A) ERRED IN LAW AND ON FACTS, IN GIVING RELIEF IN TAX RATE IGNORING THE FACT THAT THE ASSESSEE IS NOT BENEFICIAL OWNER OF THE ROYALTY AND INTERES T INCOME AND HENCE NOT ELIGIBLE FOR CONCESSIONAL RATE OF TAX OF 10%. 2. THE LD. CIT(A) ERRED IN LAW AND ON FACTS IN HOLDING THAT THE ASSESSEE IS ENTITLED FOR CONCESSIONAL TAX RATE OF 10% IGNORING THE FACT THAT THE ASSESSEE FAILED TO FURNISH THE DOCUMENTA RY EVIDENCE TO PROVE THAT IT IS THE BENEFICIAL OWNER OF THE ROYALTY AND INTEREST. 3. THE APPELLANT CRAVES LEAVE TO ADD, AMEND/ALTER OR DELETE ANY GROUND OTHER THAN THE AFORESAID GROUND HEREIN IF ADVISED SO. 3. SHRI RAJENDRA AGIWAL APPEARING ON BEHALF OF THE ASSESSEE SUBMITTED AT THE OUTSET THAT THE ASSESSEE IS A NON - RESIDENT COMPANY INCORPORATED IN SINGAPORE AND IS COVERED UNDER INDIA SINGAPORE DOUBLE TAXATION AVOIDANCE AGREEMENT (DTAA). THE ASSESSEE COMPANY IS PROVIDING ADMINISTRATIVE, MARKETING AND SALES SERVICES TO THE GROUP AND AFFILIATE COMPANIES IN THE ASIA PACIFIC REGION. DURING THE PERIOD RELEVANT TO ASSESSMENT YEAR UNDER APPEAL, THE ASSESSEE RECEIVED INCOME FROM INDIAN ENTITIES FOR THE FOLLOWING TRANSA CTIONS : NAME OF THE ENTITY NATURE OF TRANSACTION AMOUNT (RS.) RATE OF TAX APPLIED AS PER DTAA IMERYS NEWQUEST (INDIA) PVT. LTD. (INPL) ROYALTY 45,04,000 10% IMERYS CERAMIC (INDIA) PVT. LTD. (ICPL) INTEREST 26,32,225 15% IMERYS MINERALS (INDIA) PVT. LTD. (IMPL) INTEREST 1,10,02,895 15% TOTAL 1,81,39,120 3.1 THE ASSESSING OFFICER DURING THE SCRUTINY ASSESSMENT PROCEEDINGS DENIED THE BENEFIT OF LOWER TAX RATE APPLICABLE UNDER INDIA - SINGAPORE TAX TREATY FOR THE FOLLOWING REASONS : I . THE ASSESSEE IS NOT THE BENEFICIAL OWNER OF THE ROYALTY RECEIVED FROM INPL AND INTEREST RECEIVED FROM ICPL AND IMPL; AND 3 ITA NO . 2335/PUN/2016, A.Y. 2012 - 13 II . THE ASSESSEE DOES NOT SATISFY LIMITATION OF BENEFIT CLAUSE AS PER ARTICLE 24 OF THE TREATY. CONSEQUENTLY, THE ASSESSING OFFICER TAX ED THE ASSESSEES INCOME U/S. 115A @ 20%. THE LD. AR SUBMITTED THAT FOR SIMILAR REASONS , THE ASSESSING OFFICER MADE ADDITIONS IN ASSESSMENT YEARS 2006 - 07 TO 2010 - 11. THE MATTER TRAVELLED UP TO THE TRIBUNAL. THE TRIBUNAL IN ASSESSEES APPEAL IN ITA NO. 2 33/PN/2014 FOR ASSESSMENT YEAR 2010 - 11 DECIDED ON 15 - 04 - 2016 HELD THAT THE ASSESSEE IS COVERED BY INDIA - SINGAPORE TAX TREATY AND HENCE ELIGIBLE FOR CONCESSIONAL RATE OF TAX. THE TRIBUNAL FURTHER HELD THAT THE ASSESSEE IS ALSO ELIGIBLE FOR BENEFIT UNDER AR TICLE 24 OF THE TREATY. THE LD. AR POINTED THAT SIMILAR VIEW HAS BEEN TAKEN BY THE TRIBUNAL IN THE CASE OF ASSESSEE IN ASSESSMENT YEARS 2006 - 07 TO 2009 - 10. THE LD. AR FURNISHED A COPY OF THE ORDER OF TRIBUNAL IN ITA NO. 233/PN/2014 (SUPRA) AND THE COPY O F ORDER OF TRIBUNAL IN ITA NO. 1434/PN/2015 FOR ASSESSMENT YEAR 2006 - 07 DECIDED ON 22 - 07 - 2016 AND ITA NOS. 1205 TO 1207/PUN/2015 FOR ASSESSMENT YEARS 2007 - 08 TO 2009 - 10 DECIDED ON 07 - 07 - 2017. 4. MRS. SHWETA MISHRA REPRESENTING THE DEPARTMENT FAIRLY ADM ITTED THAT THE ISSUE RAISED BY THE DEPARTMENT IN PRESENT APPEAL IS IDENTICAL TO THE ONE ALREADY ADJUDICATED BY THE TRIBUNAL IN ASSESSEES OWN CASE FOR EARLIER ASSESSMENT YEARS. 5. BOTH SIDES HEARD. ORDERS OF THE AUTHORITIES BELOW PERUSED. WE FIND THAT THE GROUNDS RAISED BY THE REVENUE ASSAILING THE ORDER OF COMMISSIONER OF INCOME TAX (APPEALS) ARE ON THE SAME ISSUES THAT HAVE BEEN DECIDED BY THE TRIBUNAL IN ASSESSEES APPEAL IN ITA NO. 233/PN/2014 FOR ASSESSMENT YEAR 2010 - 11 (SUPRA). A PERUSAL OF THE IMPUGNED ORDER SHOWS THAT RELIEF HAS BEEN GRANTED TO THE ASSESSEE BY THE COMMISSIONER OF 4 ITA NO . 2335/PUN/2016, A.Y. 2012 - 13 INCOME TAX (APPEALS) BY FOLLOWING THE ORDER OF TRIBUNAL IN ITA NO. 233/PN/2014 (SUPRA). THE ORDER OF COMMISSIONER OF INCOME TAX (APPEALS) IS IN LINE WITH THE ORDER OF TRIBUNAL IN ASSESSEES OWN CASE IN EARLIER ASSESSMENT YEARS. THE LD. DR HAS NOT BROUGHT ON RECORD ANY MATERIAL CONTRARY TO THE FINDINGS OF THE TRIBUNAL IN ASSESSEES OWN CASE IN EARLIER ASSESSMENT YEARS. W E DO NOT FIND ANY INFIRMITY IN THE ORDER OF COMM ISSIONER OF INCOME TAX (APPEALS) IN ALLOWING THE BENEFIT OF CONCESSIONAL RATE OF TAX @ 10% TO THE ASSESSEE. ACCORDINGLY, THE APPEAL OF THE REVENUE IS DISMISSED BEING BEREFT OF ANY MERIT. 6. IN THE RESULT, THE APPEAL OF THE REVENUE IS DISMISSED. ORDE R PRONOUNCED ON WEDNESDAY, THE 08 TH DAY OF AUGUST, 201 8 . SD/ - SD/ - ( . /D. KARUNAKARA RAO ) ( / VIKAS AWASTHY) / ACCOUNTANT MEMBER / JUDICIAL MEMBER / PUNE; / DATED : 08 TH AUGUST, 2018 RK / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT. 2. / THE RESPONDENT. 3. ( ) / THE CIT(A) - 13, PUNE 4. THE CIT (IT/TP), PUNE 5. , , , / DR, ITAT, B BENCH, PUNE. 6. / GUARD FILE. / / // TRUE COPY// / BY ORDER, / PRIVATE SECRETARY, , / ITAT, PUNE