ACIT, Faridabad V. M/s Lakhani India Ltd., Faridabad

ITA 2657/DEL/2011

• Counselvise Citation: [2013] 140 COUNSELVISE.COM (IT) 69711 (ITAT-DELHI)
• Duration Of Justice: 2 year(s) 7 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-12-2013
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: D
• Next Hearing Date: 17-12-2013
• Assessment Year: 2006-2007
• Appeal Filed On: 24-05-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S N BHATIA
• Assessee Lawyers: M K MADAN
• Keywords: Capital asset; Business income; Double taxation relief

Judgement Text

INCOME TAX APPELLATE TRIBUNAL DELHI BENCH D : NEW DELHI BEFORE SHRI G. D. AGARWAL, HONBLE VICE PRESIDENT AND SHRI A. T. VARKEY, JUDICIAL MEMBER I TA NO. 2657 /DEL/ 2011 (ASSESSMENT YEAR: 2006 - 07 ) ACIT, CIRCLE - II, FARIDABAD VS. LAKHANI INDIA LTD. PLOT NO. 131, SECTOR - 24, FARIDABAD AAACL3113G (APPELLANT) (RESPONDENT) APPELLANT BY :SHRI S. N. BHATIA, SR. DR RESPONDENT BY: M. K. M ADAN, CA O R D E R PER A. T. VARKEY , JUDICIAL MEMBER THIS IS AN APPEAL PREFERRED BY THE REVENUE AGAINST THE ORDER OF THE LD CIT(A) , FARIDABAD, DATED 14.03.2011 , FOR THE ASSESSMENT YEAR 2006 - 07 . 2. THE GROUNDS RAISED BY THE REVENUE ARE AS FOLLOWS: - 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD CIT(A) HAS ERRED ON FACTS AND IN LAW IN DELETING THE ADDITION OF RS. 10,52,537/ - MADE BY ASSESSING OFFICER ON ACCOUNT OF INTEREST LIABILITY UNDER SECTION 36(1)(III) OF THE INCOME TAX ACT, WITHOUT TAKING INTO CONSIDERATION THE RATIO OF THE DECISION IN THE CASE OF COMMISSIONER OF INCOME - TA X, BANGALORE VS. LK TRUST 297 ITR 53 WHERE IT HAS BEEN HELD THAT WHERE THE INTEREST IS PAID IN RESPECT OF THE AMOUNT BORROWED FOR ACQUISITION OF ASSET, UNLESS ASSET IS ACQUIRED AND PUT TO USE, DEDUCTION FOR THE INTEREST CANNOT BE CLAIMED. ALLOWING ANY SUC H DEDUCTION WILL BE CONTRARY TO THE PROVISION TO SECTION 36(1)(III) OF THE INCOME TAX ACT, 1961. IN THE INSTANT CASE, THE ASSESSEE HAS MADE A PAYMENT OF RS. 93.98 LACS TO SIDCUL BY AVAILING OVERDRAFT FACILITY FROM THE CC ACCOUNT NO. 3008 WHICH WAS AN OVER DRAFT ACCOUNT. THERE WAS DEBIT BALANCE ON THE DATE OF PAYMENTS AND THEREBY INCURRED LIABILITY OF PAYMENT OF INTEREST ON THE SAME. THE INDUSTRIAL PLOT, WHICH WAS ALLOTTED TO THE ASSESSEE COMPANY, WAS NOT PUT TO USE FOR BUSINESS PURPOSES BY THE ASSESSEE DURI NG THE YEAR UNDER ASSESSMENT. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD CIT(A) HAS ERRED ON FACTS AND IN LAW IN DELETING THE ADDITION OF RS. 10,52,537/ - MADE BY ASSESSING PAGE NO. 2 OFFICER ON ACCOUNT OF INTEREST LIABILITY UNDER SECTION 36(1)(III) OF THE INCOME TAX ACT, BY OBSERVING THAT THE PROFIT GENERATED DURING THE YEAR AND RECOVERIES FROM THE DEBTORS ETC ARE MORE THAN THE INVESTMENT SO MADE IN THE ASSETS WITHOUT TAKING INTO CONSIDERATION THE RATIO OF THE JUDGMENT PRONOUNCED BY THE HONBLE PU NJAB AND HARYANA HIGH COURT IN THE CASE OF ABHISHEK INDUSTRIES LTD. REPORTED IN 286 ITR 1 (P &H), WHEREIN HONBLE COURT HAS OPINED THAT THE MONIES RECEIVED AS SHARE CAPITAL, AS TERM LOANS, AS WORKING CAPITAL LOAN, AS SALE PROCEEDS ETC., DO NOT HAVE ANY DIF FERENT COLOUR. WHATEVER ARE THE RECEIPTS IN THE BUSINESS, THEY HAVE COLOUR OF BUSINESS RECEIPTS AND HAVE NO SEPARATE IDENTIFICATION. SOURCES HAVE NO CONCERN WHATSOEVER. 3. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD CIT(A) HAS ERRED ON FACTS AND IN LAW IN DELETING THE ADDITION OF RS. 11,00,293/ - MADE BY ASSESSING OFFICER ON ACCOUNT OF NON DEDUCTION OF TAX OUT OF THE PAYMENT SO MADE BY INVOKING PROVISIONS OF SECTION 40(1)(IA) OF THE INCOME TAX ACT AS THE ASSESSEE IS A RESIDENT COMPANY AND PAYME NT WAS MADE TO A NON - RESIDENT FOR CONSULTANCY AND SUCH PAYMENT WAS CLEARLY COVERED UNDER THE PROVISIONS OF SECTION 9 OF THE ACT AND WAS SUBJECT TO DEDUCTION OF TAX AT SOURCE UNDER THE PROVISION OF SECTION 195 OF THE ACT. 4. THAT THE APPELLANT CRAVES FOR THE PERMISSION TO ADD, DELETE OR AMEND THE GROUNDS OF APPEAL BEFORE OR AT THE TIME OF HEARING OF APPEAL. 3. IN GROUND NO S . 1 AND 2 THE REVENUE HAS PLEADED THAT LD CIT(A) HAS ERRED IN DELETING THE ADDITION OF RS. 10,52,537/ - . IT HAS PLEADED THAT LD CIT(A ) ERRED IN DELETING THE INTEREST LIABILITY OF RS. 10,52,537/ - WHICH WAS ADDED BY THE ASSESSING OFFICER WITH THE HELP OF PROVISO APPENDED TO SECTION 36(1)(III) OF THE INCOME TAX ACT (HEREINAFTER THE ACT) . 4. AT THE OUTSET , THE LD COUNSEL FOR THE ASSESSEE SUBMITTED THAT THIS VERY SAME ISSUE WAS COVERED IN FAVOUR OF THE ASSESSEE BY THE ORDER OF ITAT IN ASSESSEES OWN C ASE FOR ASSESSMENT YEAR 2005 - 06. 5. WE HAVE CONSIDERED THE RIVAL CONTENTIONS AND GONE THROUGH THE RECORDS CAREFULLY AND WE FIND THAT A SIMILA R ADDITION MADE BY THE ASSESSING OFFICER IN THE ASSESSEES OWN CASE WAS DELETED BY THE LD CIT(A) FOR THE ASSESSMENT YEAR 2005 - 06 , WHOSE ORDER , HAS BEEN UPHELD BY THE ITAT .THE GROUND OF APPEAL TAKEN BY THE REVENUE FOR THE ASSESSMENT YEAR 2005 - 06 AND THE CON CLUSION RECORDED BY THE ITAT READS AS UNDER: - 14. IN GROUND NO.3, REVENUE HAS PLEADED THAT LEARNED CIT(APPEALS) HAS ERRED IN DELETING THE ADDITION OF RS.3,42,417. IT HAS PLEADED THAT LD. CIT (A) HAS ERRED IN PAGE NO. 3 DELETING THE INTEREST LIABILITY OFRS.3,42,417 W HICH WAS ADDED BY THE ASSESSING OFFICER WITH THE HELP OF PROVISO APPENDED TO SECTION 36 (1) (III) OF THE IT ACT. 15. THE BRIEF FACTS OF THE CASE ARE THAT SIDCUL HAD ALLOTTED INDUSTRIAL PLOT BEARING NO. 22, 23 AN D 2 4 TO THE ASSESSEE AT HARIDWAR , IT HAS MADE A PAYMENT OFRS.14 LACS ON 31SR AUGUST 2004 AND RS. 56 LACS ON 16.10.2004. ACCORDING TO THE ASSESSING OFFICER, ASSESSEE IS HAVING A CC ACCOUNT BEARING NUMBER 3008, WITH BANK OF INDIA. THE PAYMENTS HAVE BEEN MADE FROM THIS ACCOUNT TOWARDS THE C OST OF LAND. ACCORDING TO THE ASSESSING OFFICER THERE WAS AN OVERDRAFT LEADING TO DEBIT BALANCE ON THE DATES OF THE ABOVE PAYMENTS. THIS PLOT WAS NOT PUT TO USE BEFORE THE END OF THE ACCOUNTING PERIOD, HENCE AS PER THE PROVISO APPENDED TO SECTION 36 (1) (I II) THE INTEREST PAID IN RESPECT OF CAPITAL BORROWED FOR ACQUISITION OF AN ASSET FOR EXTENSION OF EXISTING BUSINESS HAS TO BE CAPITALIZED FROM THE DATE ON WHICH THE CAPITAL WAS BORROWED FOR ACQUISITION OF ASSETS TILL THE DATE ON WHICH SUCH ASSET WAS FIRST PUT TO USE. THE DEDUCTION OF SUCH INTEREST LIABILITY WOULD NOT BE ALLOWED AS A DEDUCTION. THE LD. AO HARBOURED BELIEF THAT ASSESSEE MUST HAVE INCURRED INTEREST EXPENDITURE, BECAUSE THERE WAS A DEBIT BALANCE ON THE DATES OF PAYMENT IN THE ABOVE CC ACCOUNT. ACCORDINGLY HE DISALLOWED A SUM OF RS.3,42,417 AND MADE ADDITION IN THE INCOME OF THE ASSESSEE. 16. ON APPEAL, IT WAS CONTENDED BY THE ASSESSEE THAT A SUM OF RS.25 LACS WAS DEPOSITED IN THE CC A/C. ON 31.8.2004. OUT OF THIS AMOUNT, PAYMENT OF RS.14,70,000 WA S MADE ON 31.8.2004. SIMILARLY, ASSESSEE HAS DEPOSITED APPROXIMATELY A SUM OF RS. 113.98 LACS IN THE STATE BANK ACCOUNT FROM 14.10.2004 TO 16.10.2004 BEFORE MAKING PAYMENT OF RS.56 LACS ON 16.10.2004. ON THE STRENGTH OF THESE DETAILS, IT WAS CONTENDED BY THE ASSESSEE THAT NO INTEREST BEARING AMOUNT WAS USED BY THE ASSESSEE FOR MAKING PAYMENT TOWARDS ACQUISITION OF CAPITAL ASSETS. LEARNED FIRST APPELLATE AUTHORITY HAS ACCEPTED THE CONTENTIONS OF THE ASSESSEE AND DELETED THE ADDITION. 17. WITH THE ASSISTAN CE OF LEARNED REPRESENTATIVE, WE HAVE GONE THROUGH THE RECORD CAREFULLY. THE ASSESSEE HAS PLACED ON RECORD COPY OF THE CC A/C AND DEMONSTRATED THAT DEBIT BALANCE WAS NOT ON ACCOUNT OF PURCHASE OF THE ASSETS. IT HAS DEPOSITED A SUM OF RS.113.98 LACS IN THIS ACCOUNT BEFORE MAKING PAYMENT OF RS.56 LACS. THE ASSESSEE HAS A SUBSTANTIAL PROFIT WHICH WAS DEPOSITED IN THIS VERY ACCOUNT. THUS, IT HAS SUBSTANTIAL SURPLUS FUND WHICH CAN ENABLE IT TO ACQUIRE THE CAPITAL ASSETS. LEARNED CIT(APPEALS) HAS OBSERVED THAT AS SESSEE HAS DECLARED AN INCOME OF RS.3.55 CRORES WHICH SUGGEST THAT IT HAS EXCESS INTEREST FREE FUNDS, THEN THE INVESTMENT MADE IN THE ACQUISITION OF THE ASSETS. CONSIDERING THESE ASPECTS, WE ARE OF THE VIEW THAT PROVISO TO SECTION 36(1)(III) IS NOT APPLICA BLE ON THE FACTS OF THE PRESENT CASE. HENCE THIS GROUND OF APPEAL IS REJECTED. 6. RESPECTFULLY FOLLOWING THE ORDER OF THE CO - ORDINATING BENCH, WE DISMIS S GROUND NO S . 1 AND 2 RAISED BY THE REVENUE AND CONFIRM THE ORDER OF THE LD CIT(A) IN DELETING THE ADDITION OF RS. 10,52,537/ - PAGE NO. 4 7. APROPOS GROUND NO. 3 .IN THIS GROUND OF APPEAL THE REVENUE HAS PLEADED THAT LD CIT(A) HAS ERRED IN DELETING THE ADDITION OF RS. 11,00,293/ - . THIS ADDITION WAS MADE BY THE ASSESSING OFFICER ON ACCOUNT OF NON - DEDUCTION OF TAX OUT OF THE PAYMENT SO MADE BY INVOKING PROVISIONS OF SECTION 40(1) ( IA) OF THE ACT ON THE GROUND THAT THE ASSESSEE HAS FAILED TO DEDUCT TDS U/S 195 OF THE ACT WHILE MAKING PAYMENT TO THE NON - RESIDENT. THE SAME ISSUE WAS ALSO BEFORE THE ITAT IN ASSESSMENT Y EAR 2005 - 06. THE ITAT IN THIS RESPECT HAS HELD AS FOLLOWS: - 18. GROUND NOS. 4 AND 5 ARE INTER - CONNECTED WITH EACH OTHER. IN THESE GROUNDS OF APPEAL, REVENUE HAS PLEADED THAT LEARNED CIT(APPEALS) HAS ERRED IN DELETING THE ADDITION OF RS.21,83,917. THIS ADD ITION WAS MADE BY THE ASSESSING OFFICER BY MAKING A DISALLOWANCE UNDER SEC. 40(A)(I) OF THE ACT ON THE GROUND THAT ASSESSEE HAS FAILED TO DEDUCT T DS UNDER SEC. 195 WHILE MAKING PAYMENT TO THE NON - RESIDENT. THE BRIEF FACTS OF THE CASE ARE THAT ASSESSEE HAS ENGAGED MR. ANDREA BONOTTO AND MR. FRANK DECAVELLE OF ITALY FOR DESIGNING AND DEVELOPMENT FOR SPRINGS SUMMER 2005 COLLECTION. THEY WERE PAID A FEE OF EURO 10,000 IN THREE INSTALLMENTS. ACCORDING TO THE ASSESSING OFFICER, THE ASSESSEE HAS CLAIMED PAYMENT OF RS.21,83,917. HE OBSERVED THAT IT IS A PAYMENT OF FEE FOR TECHNICAL SERVICES, BECAUSE THE CONSULTANCY FOR DESIGNING AND DEVELOPMENT CLEARLY COMES IN THE AMBIT OF PROVISIONS OF SEC. 9 OF THE ACT. ACCORDING TO THE ASSESSING OFFICER, BEFORE MAKING PAYMENT TO A NON - RESIDENT, ASSESSEE OUGHT TO HAVE DEDUCTED THE T DS, THEREFORE, HE INVITED THE EXPLANATION OF THE ASSESSEE AS TO WHY THE CLAIM OF THE ASSESSEE BE NOT DISALLOWED UNDER SEC. 40(A)(I) OF THE ACT. ACCORDING TO THE ASSESSEE, ARTICLE 15 OF THE DTAA BETWEEN INDIA AND ITALY NOTIFIED ON 25.4.1996 CONTEMPLATES THAT IF INCOME HAS BEEN DERIVED BY A RESIDENT OF A CONTRACTING IN RESPECT OF PROFESSIONAL SERVICES OR OTHER INDEPENDENT ACTIVITY OF A SIMILAR CHARACTER MAY BE TAXED IN EITHER STATE, IF SUCH SERVICE S ARE PROVIDED IN THAT OTHER STATE AND THE PERFORMER IS PRESENT IN THAT STATE FOR A PERIOD AGGREGATING 183 DAYS IN THE RELEVANT FISCAL YEAR OR SUCH PERSON HAS ANY FIXED PLACE REGULARLY AVAILABLE TO HIM IN THAT OTHER CONTRACTING STATE FOR THE PURPOSE OF PER FORMING HIS ACTIVITIES. ACCORDING TO THE ASSESSEE, MR. ANDREA BONOTTO WAS NOT HAVING ANY PERMANENT FIXED PLACE IN INDIA AND HE NEVER REMAINED IN INDIA MORE THAN 183 DAYS. THE ASSESSEE FURTHER DISPUTED THE SERVICES RENDERED BY HIM AS TECHNICAL SERVICES. LEA RNED ASSESSING OFFICER DID NOT TAKE COGNIZANCE OF THE ASSESSEE'S SUBMISSIONS. HE OBSERVED THAT AS PER ARTICLE 13 OF THE DTAA, THE INCOME IS CHARGEABLE TO TAX IN INDIA @20%, ASSESSEE FAILED TO DEDUCT THE T DS ON THE PAYMENTS WHICH HAS ELEMENT OF INCOME, THER EFORE, A DISALLOWANCE OF THE TOTAL PAYMENT HAS TO BE MADE UNDER SEC. 40(A)(I) OF THE ACT. 19. LEARNED FIRST APPELLATE AUTHORITY HAS REAPPRECIATED THE FACTS AND CIRCUMSTANCES AND OBSERVED THAT CASE OF THE ASSESSEE FALLS WITHIN THE AMBIT OF ARTICLE 15 AND NO DISALLOWANCE OUGHT TO HAVE BEEN MADE BY THE ASSESSING OFFICER. PAGE NO. 5 20. WE HAVE HEARD THE RIVAL CONTENTIONS AND GONE THROUGH THE RECORD CAREFULLY. IN ORDER TO RESOLVE THE CONTROVERSY, IT IS SALUTARY UPON US TO TAKE NOTE OF ARTICLES 13 AND 15 OF THE DTAA BETWEE N INDIA AND REPUBLIC OF ITALY NOTIFIED ON 25.4.1996. THEY READS AS UNDER: ' ARTICLE 13 - ROYALTIES AND FEES FOR TECHNICAL SERVICES 1. ROYALTIES AND FEES FOR TECHNICAL SERVICES ARISING IN A CONTRACTING STATE AND PAID TO A RESIDENT OF THE OTHER CONTRACTING STATE MAY BE TAXED IN THAT OTHER STATE. 2. HOWEVER SUCH ROYALTIES AND FEES FOR TECHNICAL SERVICES MAY ALSO BE TAXED IN THE CONTRACTING STATE IN WHICH THEY ARISE AND ACCORDING TO THE LAWS OF THAT STATE, BUT IF THE RECIPIENT IS THE BENEFICIAL OWNER OF THE ROYALTIES, OR FEES FOR TECHNICAL SERVICES, THE TAX SO CHARGED SHALL NOT EXCEED 20 PER CENT, OF THE GROSS AMOUNT OF THE ROYALTIES OR FEES FOR TECHNICAL SERVICES. ARTICLE - 15 - INDEPENDENT PERSONAL SERVICES 1. INCOME DERIVED BY A RESIDENT OF A CONTRACTING STATE IN RESPECT OF PROFESSIONAL SERVICES OR OTHER INDEPENDENT ACTIVITIES OF A SIMILAR CHARACTER MAY BE TAXED IN THAT STATE. SUCH INCOME M AY ALSO BE TAXED IN THE OTHER CONTRACTING STATE IF SUCH SERVICES ARE PERFORMED IN THAT OTHER STATE AND IF: ( A) HE IS PRESENT IN THAT OTHER STATE FOR A PERIOD OR PERIODS AGGREGATING 183 DAYS IN THE RELEVANT FISCAL YEAR; OR (B) HE HAS A FIXED BASE REGULARLY AVAILABLE TO HIM IN THAT OTHER STATE FOR THE PURPOSE OF PERFORMING HIS ACTIVITIES BUT ONLY SO MUCH OF THE INCOME AS IS ATTRIBUTABLE TO THAT FIXED BASE.' 21. WE DO NOT FEEL IT NECESSARY TO GO INTO THE ISSUE, WHETHER THE PAYMENTS MADE BY THE ASSESSEE TO MR. ANDREA BONOTTO IS A FEE FOR TECHNICAL SERVICES OR NOT, BECAUSE EVEN FOR THE SAKE OF ARGUMENT, WE PRESUME THAT IT IS FEE FOR TECHNICAL SERVICE THEN ALSO TDS WOULD BE DEDUCTIBLE ONLY WHEN ELEMENT OF INCOME IS INVOLVED IN SUCH PAYM ENT. LEARNED ASSESSING OFFICER HAS RESTRICTED HIMSELF QUA ARTICLE 13 ONLY. HE DID NOT LOOK INTO ARTICLE 15 LEARNED FIRST APPELLATE AUTHORITY HAS MADE LUCID ENUNCIATION OF THE FACT AND LAW ON THE IMPACT OF ARTICLE 15. A BARE PERUSAL OF THIS ARTICLE SUGGESTS THAT INCOME DERIVED BY A RESIDENT OF A CONTRACTING STATE IN RESPECT OF PROFESSIONAL SERVICES OR OTHER INDEPENDENT ACTIVITIES OF A SIMILAR CHARACTER MAY BE TAXED IN THAT STATE. SUCH INCOME MAY ALSO BE TAXED IN INDIA BUT SUBJECT TO FULFILLMENT OF CONDITIONS OF CLAUSES (A) AND (B) OF ARTICLE 15 (EXTRACTED SUPRA). IF MR. ANDREA BONOTTO HAS CARRIED OUT HIS ACTIVITIES BY STAYING IN INDIA FOR A PERIOD OF MORE THAN 183 DAYS IN THE RELEVANT FISCAL YEAR OR HE HAS A FIXED BASE REGULARLY AVAILABLE TO HIM IN INDIA, THE N ELEMENT OF INCOME WOULD BE INVOLVED IN THE PAYMENT MADE BY THE ASSESSEE. IF THESE CONDITIONS ARE MISSING THEN IT WOULD BE CONSTRUED THAT PAYMENTS DO NOT ACCRUE TO THE NON - RESIDENT IN INDIA AND IF ELEMENT OF INCOME IS NOT INVOLVED IN THE PAYMENT THEN ASSE SSEE WILL NOT BE OBLIGED TO DEDUCT THE TAX. LEARNED FIRST APPELLATE AUTHORITY HAS RECORDED A FINDING THAT MR. ANDREA BONOTTO IS ENTITLED FOR THE BENEFICIAL PROVISIONS OF THE DT AA. HE IS COVERED B Y ARTICLE 15 OF THE DT AA. HENCE, THE INCOME WOULD NOT BE PAGE NO. 6 TAX ABLE IN HIS HAND IN INDIA AND, THEREFORE, NO TDS WOULD BE DEDUCTIBLE. 22. THE LEARNED COUNSEL FOR THE ASSESSEE ALSO RELIED UPON THE ORDER OF THE ITAT, SPECIAL BENCH IN THE CASE OF MERILYN SHIPPING & TRANSPORT VS. ADI REPORTED IN 136 ITD 23. ON THE STRENGTH OF THIS DECISION, HE CONTENDED THAT SPECIAL BENCH HAS INTERPRETED THE EXPRESSION PAYABLE EMPLOYED IN SEC. 40(A)(I) OF THE ACT AND OBSERVED THAT NO DISALLOWANCE WOULD BE MADE UNDER SEC. 40(A)(I) ON THE AMOUNTS WHICH HAVE ALREADY BEEN PAID, BY ALLEGING THAT ASSESSEE FAILED TO DEDUCT THE TDS. THE DISALLOWANCE WILL BE MADE ON THE AMOUNTS WHICH ARE PAYABLE ON THE DATE OF BALANCE SHEET AND NO TDS WAS DEDUCTED. THE OPERATION OF THE ORDER HAS BEEN STAYED BY HON'BLE MADRAS HIGH COURT AND WE HAVE UPHELD THE ORDER OF THE LEARNED CIT(APPEALS) FOR THE REASONS ASSIGNED BY HIM, I.E. ON THE GROUND THAT ELEMENT OF INCOME IS NOT INVOLVED IN THE PAYMENTS MADE BY THE ASSESSEE, THEREFORE, NO TDS WAS REQUIRED TO BE DEDUCTED. WE DO NOT DEEM IT NECESSARY TO GO INTO THIS ALTERNATIVE CONTENTION. ACCORDINGLY, GROUNDS OF APPEAL RAISED BY THE REVENUE ARE REJECTED. 8. RESPECTFULLY FOLLOWING THE ORDER OF THE CO - ORDINATE BENCH, WE DISMISS GROUND NO. 3 RAISED BY THE REVENUE. 9. IN THE RESULT THE APPEAL PREFERRED BY THE REVENUE IS DISMISSED AND THE ORDER OF THE LD CIT(A) IS CONFIRMED. ORDER PRO NOUNCED IN THE OPEN COURT ON 3 1 .12.2013. - S D / - - S D / - ( G. D. AGARWAL) (A. T. VARKEY) HONBLE VICE PRESIDENT JUDICIAL MEMBER DATED 3 1 /12 /2013 A K KEOT COPY FORWARDED TO 1. APPLICANT 2. RESPONDENT 3. CIT 4. CIT (A) 5. DR:ITAT ASSISTANT REGISTRAR ITAT, NEW DELHI