Regen Powertech Private Limited, CHENNAI V. DCIT International Taxation 2(1), CHENNAI

ITA 2721/CHNY/2017

• Counselvise Citation: [2019] 118 COUNSELVISE.COM (IT) 2827 (ITAT-CHENNAI)
• Duration Of Justice: 1 year(s) 3 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-02-2019
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: B
• Assessment Year: 2014-2015
• Appeal Filed On: 13-11-2017
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: HOMI RAJVANSH
• Assessee Lawyers: B RAMAKRISHNAN
• Keywords: Business income; Double taxation relief; Services rendered outside India; Deemed to accrue or arise in india; Retrospective amendment; Permanent establishment; Competent authority; TDS
• Section: 201(1); 195; 90

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL , B B ENCH, CHENNAI . . . , ., $ BEFORE SHRI N.R.S.GANESAN, JUDICIAL MEMBER AND SHRI S.JAYARAMAN, ACCOUNTANT MEMBER / I.T.A. NO.2721/CHNY/2017 (( /ASSESSMENT YEAR : 2014-15 M/S. REGEN POWERTECH PVT.LTD., 7 TH FLOOR, KRM PLAZA, NORTH TOWER, NO.2, HARRINGTON ROAD, CHETPET CHENNAI-600 031. VS THE DEPUTY COMMISSIONER OF INCOME TAX, INTERNATIONAL TAXATION-2(1), CHENNAI. PAN: AADR5531M ( /APPELLANT) ( /RESPONDENT) / APPELLANT BY : MR.B.RAMAKRISHNAN, CA /RESPONDENT BY : MR.HOMI RAJVANSH, CIT /DATE OF HEARING : 20.12.2018 /DATE OF PRONOUNCEMENT : 28.02.2019 / O R D E R PER S.JAYARAMAN, AM: THE ASSESSEE FILED THIS APPEAL AGAINST THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS)-16, CHENNAI IN ITA NO. 60/CIT(A) -16/2016-17 DATED 01.08.2017 FOR ASSESSME NT YEAR 2014-15. 2. M/S. REGEN POWERTECH PRIVATE LIMITED, THE ASS ESSEE, IS ENGAGED IN THE BUSINESS OF MANUFACTURE AND SUPPLY O F RENEWABLE ENERGY DEVICES VIZ. WIND TURBINE GENERATORS (WTG) . FOR AY 2014-15, THE DCIT, INTERNATIONAL TAXATION 2 (1), CH ENNAI, AFTER :-2-: ITA NO.2721/CHNY/2017 CONSIDERING THE ASSESSEEES EXPLANATIONS AND OTHER MATERIAL HELD THAT THE ASSESSEES CLAIM OF; REIMBURSEMENT OF RS.1,19,47,013/- TO M/S WINDFORCE PRIVATE LIMITED, SRILANKA FOR INSTALLATION OF WTG AT THE PREMISES OF SRILANKAAS F EE FOR TECHNICAL SERVICES / ROYALTY, CONSULTANCY CHARGES OF RS.12,01 ,000/- PAID TO M/S ERNST & YOUNG URE FOR MARKET STUDY AS ROYALTY A ND THE PAYMENTS OF RS.5,23,545/- MADE FOR PURCHASE OF SOFT WARE FROM M/S EMD INTERNATIONAL AS ROYALTY. SINCE THE ASSESSEE H AS NOT DEDUCTED TDS ON THESE PAYMENTS, HE HAS PASSED AN OR DER U/S 201(1) / 201(1A). AGGRIEVED, THE ASSESSEE FILED AN APPEAL AND THE LD.CIT(A) DISMISSED THE APPEAL. AGAINST THE ORDER O F THE LD.CIT(A), THE ASSESSEE FILED THIS APPEAL. 3. THE LD AR SUBMITTED THAT THE ASSESSEE SELLS ITS WEG TO CUSTOMERS IN INDIA AND ALSO OUTSIDE INDIA. FOR THE WEG SOLD OUTSIDE INDIA,IT ENGAGED THE COMPANIES RESIDENT IN THE RESPECTIVE COUNTRIES FOR PROVIDING THE ERECTION AND COMMISSION ING SERVICES AND SUBSEQUENT REPAIR SERVICES TO THE CUSTOMERS IN THOSE COUNTRIES.DURING THE ASSESSMENTYEAR IT PAID, RS.1, 19,47,013/- TO M/S WINDFORCE PRIVATE LIMITED, SRILANKA FOR ERECTIO N AND COMMISSION SERVICES RENDERED TO ITS CUSTOMERS OUTSI DE INDIA AND :-3-: ITA NO.2721/CHNY/2017 RS.3,34,414/- TO M/S WINGTEC ROTOR SERVICE, GERMANY FOR REPAIR SERVICES RENDERED TO ITS CUSTOMERS OUTSIDE INDIA. T HE ASSESSING OFFICER HELD THAT THE ABOVE SERVICES REQUIRE TECHNI CAL SKILLS AND EXPERTISE AND HENCE THEY ARE TAXABLE UNDER SECTION 9(1)(VII) .FURTHER, THE AO HELD THAT AS PER THE PROVISIONS OF DOUBLE TAXATION AVOIDANCE AGREEMENT WITH GERMANY AND SRILANKA, THE FEE FOR TECHNICAL SERVICES PAYABLE TO ANON-RESIDENT IS TAXA BLE IN INDIA AT 10%. IN THIS REGARD, THE LD AR SUBMITTED THAT AS PE R THE PROVISIONS OF SECTION 9(1)(VII) (B) OF THE ACT, THE INCOME B Y WAY OF FEES FOR TECHNICAL SERVICES PAYABLE BY A PERSON WHO IS A RES IDENT, EXCEPT WHERE THE FEES ARE PAYABLE IN RESPECT OF SERVICESUT ILISED IN A BUSINESS OR PROFESSION CARRIED ON BY SUCH PERSON OU TSIDE INDIA OR FOR THE PURPOSES OF MAKING OR EARNING ANY INCOME FR OM ANY SOURCE OUTSIDE INDIA SHALL BE DEEMED TO ACCRUE OR ARISE IN INDIA. SINCE THE ABOVE MENTIONED SERVICES ARE PROVIDED AT THE CU STOMER PREMISES OUTSIDEINDIA, THEY RELATE TO BUSINESS OF THE ASSESSEE OUTSIDE INDIA. HENCE, THESE PAYMENTS UNDER THE CA TEGORY OF FTS IS NOT TAXABLE IN INDIA.IN THIS REGARD, RELIANCE WA S PLACED ON THE DECISION OF CIT V. FAIZAN SHOES (P.) LTD [2014] 48 TAXMANN.COM 48 (MADRAS). IT WAS ALSO PLEADED THAT EVER ASSUMING THAT THESE PAYMENTS ARE RELATED TO THE BUSINESS INCOME OF THE FOREIGN :-4-: ITA NO.2721/CHNY/2017 COMPANIES, AS PER THE ARTICLE 7 OF THE DTAA WITH SR ILANKA AND WITH GERMANY, READ WITH SECTION 90 OF THE ACT, THE TAXAB ILITY OF BUSINESS PROFITS IS AS UNDER: THE PROFITS OF AN ENTERPRISE OF A CONTRACTING STAT E SHALL BE TAXABLE ONLY IN THAT STATE UNLESS THE ENTERPRISE CA RRIES ON BUSINESS IN THE OTHER CONTRACTING STATE THROUGH APERMANENT ESTABLISHMENT SITUATED THEREIN. IF THE ENTERPRISE CARRIES ON BUSINESS AS AFORESAID, THE PR OFITS OF THE ENTERPRISE MAY BE TAXED IN THE OTHER STATE BUT ONLY SO MUCH OF THEM AS IS ATTRIBUTABLE TO THAT PERMANENT ESTABLISHMENT. 3.1 IN THE ASSESSEES CASE, NEITHER THE SRILANKAN N OR THE GERMAN ENTITY TO WHOM THE IMPUGNED PAYMENTSARE MADE, HAS ANY PERMANENT ESTABLISHMENT IN INDIA. HENCE, THESE PAYM ENTS BEING THE BUSINESS INCOME OF THE FOREIGN COMPANIES ARE NO T TAXABLE IN INDIA.IN THIS REGARD, RELIANCE WAS PLACED IN THE C ASE OF DCIT V. SRM AGRO FOODS IN [2016] 75 TAXMANN.COM 210 (MUMBAI - TRIB.), WHEREIN IT WAS HELD THAT WHERE ASSESSEE HADMADE PA YMENT TO NON-RESIDENT AGENT FOR RENDERING SERVICES OUTSIDE I NDIA AND SAIDAGENT DID NOT HAVE ANY PE IN INDIA, SAID PAYMEN T WAS NOT EXIGIBLE TO TDS DEDUCTION UNDER SECTION 195 3.2 THE LD AR FURTHER SUBMITTED THAT SINCE THE ABOV E PAYMENTS ARE NOT SUBJECT TO TAX IN INDIA, THEY ARE NOT LIAB LE TO SUFFER TDS AS :-5-: ITA NO.2721/CHNY/2017 HELD BY THE HONBLE SUPREME COURT IN THE CASE OF GE INDIA TECHNOLOGY CEN.(P.) LTD. V. CIT IN [2010] 193 TAXMA N 234 (SC) AND HENCE PLEADED TODIRECT THE A O NOT TO TREAT TH E ASSESSEE IN DEFAULT U/S 201/201(1A) OF THE ACT AND DELETE THE T AXES AND THE INTEREST LEVIED U/S 201(1A) ON THESE PAYMENTS. 4. PER CONTRA, THE LD DR INVITED OUR ATTENTION TO T HE ORDER OF THE LD.CIT(A) AND SUPPORTED IT. THE RELEVANT PORTION IS EXTRACTED AS UNDER : THE NATURE OF WORK MENTIONED AS PER THE WORK ORDER IN RESPECT OF WFPL MENTIONS THAT WFPL SHALL PROVIDE ONE NO LIEBHERR LR 1350 SERIAL NO 074073 (350T CAPACITY) CRAWLER CRANE WITH 96 METER MAIN BO OM AND 12 METERS FIXED JIB IN A GOOD WORKING CONDITION AND LO AD HANDLING CAPACITY AS PER THE LOAD CHART OF THE CRANE AT KALP ITIYA SITES FOR ERECTION AND DE-ERECTION OF WIGS BELONGING TO REGEN . WINDFORCE SHALL GIVE OR PROVIDE ALL NECESSARY SUPER INTENDENCE DURING THE EXECUTION OF THE WORKS. WINDFORCEPVT. LT D. SHALL PROVIDE AND EMPLOY PERSONNEL ON THE SITE IN CONNECT ION WITH THE EXECUTION OF THE WORKS. ONLY SUCH TECHNICAL ASSISTA NTS AS ARE SKILLED AND EXPERIENCED IN THEIR RESPECTIVE CALLING S AS AREA COMPETENT TO GIVE PROPER SUPERVISION TO THE WORK TH EY ARE REQUIRED TO SUPERVISE SUCH SKILLED, SEMI-SKILLED AN D UNSKILLED LABOUR AS IN NECESSARY FOR THE PROPER AND TIMELY EX ECUTION AND MAINTENANCE OF WORKS. WHERE REQUIRED BY LAW OR REGU LATION OF LOCAL OR OTHER AUTHORITY, SUCH PERSONNEL SHALL BE D ULY LICENSES BY THE COMPETENT AUTHORITY TO PRACTICE THEIR TRADES, P ROFESSIONS AND CALLINGS. THE APPELLANT HAS EXPORTED WIND TURBINE G ENERATORS TO ITS CUSTOMERS IN SRILANKA. THE TURBINE GENERATORS A RE MANUFACTURED / SUPPLIED FROM INDIA. THE SITUS/ SOUR CE OF INCOME GENERATING ACTIVITY I.E WTG SUPPLIED TOWARDS WHICH THE PAYMENT UNDER CONSIDERATION IS MADE, IS THEREFORE IN INDIA. THERE IS NO BUSINESS OR PROFESSION CARRIED OUT BY REGEN POWER T ECH PVT. LTD. OUTSIDE INDIA IN SRILANKA. REGEN POWER TECH IS ONE OF THE LARGEST MANUFACTURERS OF MULTI MEGAWATT DIRECT DRIV E (GEARLESS) WECS WITH PERMANENT MAGNET TECHNOLOGY IN INDIAN MAR KET AND PROVIDES FULL TURNKEY INSTALLATIONS FOR WIND POWER PROJECTS. THE :-6-: ITA NO.2721/CHNY/2017 WEBSITE OF THE APPELLANT STATES THAT THE WECS ARE M ANUFACTURED AT TADA, ANDHRAPRADESH OR FROM UDAIPUR. HENCE, IT I S CLEAR THAT THE BUSINESS OF MANUFACTURING TURBINES IS UNDERTAKE N IN INDIA WHERE IT HAS AROUND 2000 EMPLOYEES SPREAD ACROSS IT S VARIOUS OFFICES IN INDIA. HENCE AN ORDER OF INSTALLING TURB INE OUTSIDE INDIA, CANNOT BE CONSIDERED AS A BUSINESS OR PROFES SION DONE BY REGEN OUTSIDE INDIA. THE MATERIALS (TURBINE) INV OLVED IN THAT BUSINESS ARE NOT PROCURED FROM OUTSIDE INDIA. HENCE THE APPELLANTS CONTENTION THAT EXECUTION OF WORKS IN S RILANKA ARE BUSINESS CARRIED OUT ENTIRELY OUTSIDE INDIA IS NOT FOUND ACCEPTABLE. THE APPELLANTS CONTENTION THAT THE NATURE OF PAYME NT MADE TO WFPL, SRILANKA IS NOT IN THE NATURE OF FEES FOR TEC HNICAL SERVICE AS PER THE EXPLANATION (2] TO SECTION 9(I) (VII) OF THE INCOME, TAX ACT. THUS THE APPELLANT CLAIMS THAT AS THE INCOME IS NO T IN THE NATURE OF FTS. IT MUST BE TREATED AS BUSINESS INCOM E IN THE HANDS OF WFPL,, SRILANKA. AS PER ARTICLE 7 OF INDIA -SRILANKA DTAA, BUSINESS PROFITS OF AN ENTERPRISE OF SRILANKA MUST BE TAXABLE ONLY IN SRILANKA UNLESS THE ENTERPRISE CARR IES ON BUSINESS IN INDIA THROUGH PERMANENT ESTABLISHMENT. HOWEVER EXPLANATION [2] OF SECTION 9(I)(VII) STATES THAT-FO R THE PURPOSES OF THIS CLAUSE, FEES FOR TECHNICAL SERVICES MEAN S ANY CONSIDERATION (INCLUDING ANY LUMP SUM CONSIDERATION OR RENDERING OF ANY MANAGERIAL, TECHNICAL OR CONSULTAN CY SERVICES (INCLUDING THE PROVISION OF SERVICES OF TECHNICAL O R OTHER PERSONNEL) BUT DOES NOT INCLUDE CONSIDERATION FOR A NY CONSTRUCTION, ASSEMBLY, MINING OR LIKE PROJECT UNDE RTAKEN BY THE RECIPIENT OR CONSIDERATION WHICH WOULD BE INCOME OF RECIPIENT CHARGEABLE UNDER THE HEAD SALARIES.] THE APPELLANTS CONTENTION THAT THE PROJECT UNDERTA KEN IN SRILANKA IS MERE CONSTRUCTION AND HENCE DOES NOT QU ALIFY AS FEE FOR TECHNICAL SERVICE. IN THE WORK ORDER ISSUED BY REGEN POWERTECHPVT. LTD. TO M/S WINDFORCEPVT. LTD., THE S COPE OF THE WORK IS MENTIONED AS WFPL TO OPERATE THE CRANE UN DER SUPERVISION AND CONTROL OF REGEN. THE WORK ASSIGNED IS MENTIONED AS LOADING AND UNLOADING OF OUR WEC COMP ONENTS AT REGEN, WEC LOCATIONS, DE-ERECTION AND ERECTION O F FOUNDATION CANS, STEEL TOWERS, NACELLE, GENERATOR, ROTOR, BLADES AND OTHER SUPPORTING COMPONENTS OF WEC AT RE GEN SITES. DISMANTLING, ASSEMBLY, LOADING AND UNLOADING OF CRANE AND CRANE PARTS AT REGEN SITE. IN THE CONDITIONS O F CONTRACT, CLAUSE 3.0 STATES THAT WINDFORCE PVT LTD SHALL GIVE OR PROVIDE ALL NECESSA RY SUPERINTENDENCE DURING THE .EXECUTION OF THE WORKS AND AS LONG THEREAFTER AS THE SITE ENGINEER MAY CONSIDER NECESS ARY FOR THE :-7-: ITA NO.2721/CHNY/2017 PROPER FULFILLING OF THE OBLIGATIONS UNDER THE CONT RACT. WINDFORCE PUT LTD SHALL ARRANGE A COMPETENT AND AUTHORIZED AG ENT OR REPRESENTATIVE TO BE CONSTANTLY ON THE WORKS WHO SH ALL GIVE HIS WHOLE TIME TO THE SUPERINTENDENCE OF THE SAME. CLAUSE 4.0 SAYS THAT WINDFORCE PUT LTD SHALL PROVIDE AND EMPLOY PERSONNE L ON THE SITE IN CONNECTION WITH THE EXECUTION OF WORKS, ONL Y SUCH TECHNICAL ASSISTANTS AS ARE SKILLED AND EXPERIENCED IN THEIR RESPECTIVE CALLINGS AS AREA COMPETENT TO GIVE PROPE R SUPERVISION TO THE WORK THEY ARE REQUIRED TO SUPERVISE AND SUCH SKILLED, SEMI-SKILLED AND UNSKILLED LABOUR AS IS NECESSARY F OR THE PROPER AND TIMELY EXECUTION AND MAINTENANCE OF THE WORKS. WHERE REQUIRED BY LAW OR REGULATION OF LOCAL OR OTHER AUT HORITY, SUCH PERSONNEL SHALL BE DULY LICENSES BY THE COMPETENT A UTHORITY TO PRACTICE THEIR TRADES, PROFESSIONS AND CALLINGS. FROM THE DESCRIPTION OF WORK ORDER AND ABOVE CLAUSE S IN THE AGREEMENT, IT IS EVIDENT THAT THE WORK BEING CARRIE D OUT IN SRILANKA IS NOT MERE CONSTRUCTION ASSEMBLY OR MININ G LIKE PROJECT. INSTALLATION OF WIND TURBINE REQUIRES LOT OF TECHNICALITY. WIND FORCE PVT LTD HENCE PROVIDE FOR SKILLED TECHNI CAL ASSISTANTS AND SITE ENGINEERS FOR EXECUTING THE INS TALLATION WORK. THE SERVICES OF TECHNICAL PERSONNEL ARE USED IN THE INSTALLATION OF WIND TURBINES AND HENCE THE SERVICES RENDERED BY WIND FORCE PVT. LTD. TO REGEN POWER TECH FOR ITS PROJECT S IN SRILANKA ARE IN THE NATURE OF FEE FOR TECHNICAL SERVICES. MOREOVER AS PER ARTICLE 12 OF INDIA-SRILANKA DTAA, ROYALTY OF FEE FOR TECHNICAL SERVICES MAY ALSO BE TAXED IN THE CONTRACTING STATE IN WHICH THEY ARISE, ACCORDING TO THE LAWS OF THAT STATE1 BUT IF THE BENEFICIAL OWNER OF THE ROYALTIES OR FEE S FOR TECHNICAL SERVICES IS A RESIDENT OF THE OTHER CONTRACTING STA TE, THE TAX SO CHARGED SHALL NOT EXCEED 10 PER CENT OF THE GROSS A MOUNT OF THE ROYALTIES OR FEES FOR TECHNICAL SERVICES. IN THE APPELLANT S CASE, THE SERVICES ARE RENDERED BY WIND FORCE PVT. LTD. TO THE APPELLANT WHO IS BASED IN IN DIA. HENCE AS PER CLAUSE (2) OF ARTICLE 12 OF DTAA, THE PAYMENTS MADE TOWARDS THE SERVICES RENDERED BY WFPL, SRILANKA ARE LIABLE TO WITHHOLDING TAX AT 10%, AS AGAINST NON-DEDUCTION OF TDS ON SUCH PAYMENTS BY APPELLANT. IN VIEW OF THE ABOVE DISCUSSION CASE LAWS REFERRED ARE FOUND DISTINGUISHABLE ON FACTS THEREFORE WITHOUT PREJUDIC E TO THE ABOVE, THE PAYMENTS OF RS.1,19,47,013/- PAID TO M/S WINDFORCE PRIVATE LIMITED, SRILANKA FOR ERECTION AND COMMISSI ON SERVICES RENDERED TO CUSTOMERS OUTSIDE INDIA ARE ALSO IN THE NATURE OF ROYALTY AS IT INVOLVES THE PAYMENT FOR THE RIGHT TO USE INDUSTRIAL, :-8-: ITA NO.2721/CHNY/2017 COMMERCIAL, OR SCIENTIFIC EQUIPMENT, AS THE PRESENT PAYMENT IS TOWARDS HIRING OF CRANES AND HENCE IN THE NATURE OF RIGHT TO USE INDUSTRIAL, THEREFORE I UPHELD THE ACTION OF THE AO TO TREAT THE PAYMENT RS.L,19,47,013/- PAID TO M/S WINDFORCE PRIV ATE. LIMITED, SRILANKA FOR ERECTION AND COMMISSION SERVI CES RENDERED TO CUSTOMERS OUTSIDE INDIA AS FTS OR ROYALTY LIABLE TO 10% TDS AND AS APPELLANT HAS FAILED TO DO SO, HENCE APPELLA NT IS IN DEFAULT IN VIEW OF SEC 201(1) OF THE ACT AND THEREF ORE THE AO HAS RIGHTLY LEVIED TAX AND INTEREST U/S 20 1(1) & U/S 2 01(1A) OF THE ACT. THE GROUND OF APPEAL IS THEREFORE DISMISSED. AS REGARD THE REPAIR SERVICE, THE APPELLANT HAS ENG AGED M/S. WINGTEC ROTOR SERVICE, GERMANY FOR CARRYING OU T REPAIR ON THE ROTOR BLADES BY DEPLOYING ITS SERVICE TECHNICIA NS AND HAD INCURRED AN AMOUNT OF RS.3,34,414 TOWARDS THE SAME AND APPELLANT HAS NOT DEDUCTED IDS ON THE SAID PAYMENT FOR THE REASON THAT THE NATURE OF REMITTANCE IS TOWARDS REP AIR CHARGES, THE REPAIRS ARE MOST TYPICAL FEATURES LIKE CRACKING AND ROUGHNESS ON THE SURFACE OF THE BLADES, ELECTRIC SH ORT CIRCUIT IN THE GENERATOR ARID OVERHEATING OF THE GEARBOX ALL D EMAND A SOPHISTICATED APPROACH TO MAINTENANCE. HENCE THESE REPAIRS ARE NOT MUNDANE REPAIRS, BUT REQUIRE HIGHLY SOPHIST ICATED TECHNIQUES AND HENCE IN THE NATURE OF TECHNICAL SER VICES AS PER SECTION 9(L)(VII) R.W. EXPLANATION 2 OF IT ACT 1961 . AS THE PAYMENTS FOR REPAIR SERVICE WERE MADE TO NON RESIDENT OF GERMANY DURING THE F.Y. 2013-14, THE TAXABILITY AS PER DTHA WITH GERMANY. ARTICLE 12 ROYALTIES AND FEES FOR TEC HNICAL SERVICES ARISING IN A CONTRACTING STATE AND PAID TO A RESIDENT OF THE OTHER CONTRACTING STATE MAY BE TAXED IN THE OTH ER STATE. HOWEVER, SUCH ROYALTIES AND FEES FOR TECHNICAL SERV ICES MAY ALSO BE TAXED IN THE CONTRACTING STATE IN WHICH THE Y ARISE AND ACCORDING TO THE LAWS OF THAT STATE, BUT IF THE REC IPIENT IS THE BENEFICIAL OWNER OF THE ROYALTIES, OR FEES FOR TECH NICAL SERVICES, THE TAX SO CHARGED SHALL OR EXCEED 10 PER CENT OF T HE GROSS AMOUNT OF THE ROYALTIES OR FEES FOR TECHNICAL SERVI CES. THE TERMS FEES FOR TECHNICAL SERVICES AS UNDER IN THIS ARTICLE MEANS PAYMENTS OF ARTY AMOUNT, IN CONSIDERATION FOR THE SERVICES OF A MANAGERIAL, TECHNICAL OR CONSULTANCY NATURE, INCLUDING THE PROVISIONS OF SERVICES OF TECHNICAL O R OTHER PERSONNEL. HENCE AN AMOUNT OF RS.3,34,414/- PAID TO M/S. WINGT EC ROTOR SERVICE, BEING IN THE NATURE OF FTS IS RIGHTLY TREA TED AS INCOME CHARGEABLE TO TAX IN INDIA AND HENCE LIABLE TO TDS. IN VIEW OF THE ABOVE DISCUSSION I UPHELD THE ACTION OF THE AO TO TREAT THE PAYMENT RS. 3,34,414/- PAID TO M/S WINGTEC ROTOR SE RVICE, SRILANKA FOR REPAIR SERVICES RENDERED TO CUSTOMERS OUTSIDE INDIA AS FTS LIABLE TO 10% TDS AND AS APPELLANT HAS FAILE D TO DO SO, :-9-: ITA NO.2721/CHNY/2017 HENCE APPELLANT IS IN DEFAULT IN VIEW OF SEC 201(1) OF THE ACT AND THEREFORE THE AO HAS RIGHTLY LEVIED TAX AND INTERES T U/S 201(1) & U/S 201(1A) OF THE ACT. THE GROUND OF APPEAL IS THE REFORE DISMISSED. 5. WE HAVE HEARD THE RIVAL SUBMISSIONS AND GONE TH ROUGH RELEVANT MATERIAL. THE AO RECORDED A FINDING THAT R EGEN POWER TECH PVT LTD , THE ASSESSEE, IS ONE OF THE LARGEST MANUFACTURERS OF MULTI MEGAWATT DIRECT DRIVE (GEARLESS) WECS WITH PE RMANENT MAGNET TECHNOLOGY IN INDIAN MARKET AND PROVIDES FUL L TURNKEY INSTALLATIONS FOR WIND POWER PROJECTS. IT HAS EXPOR TED WIND TURBINE GENERATORS TO ITS CUSTOMERS IN SRILANKA. THE TURBIN E GENERATORS ARE MANUFACTURED / SUPPLIED FROM INDIA. THE SITUS/ SOUR CE OF INCOME GENERATING ACTIVITY I.E WTG SUPPLIED TOWARDS WHICH THE PAYMENT UNDER CONSIDERATION IS MADE, IS THEREFORE IN INDIA. THERE IS NO BUSINESS OR PROFESSION CARRIED OUT BY REGEN POWER TECH PVT. LTD. OUTSIDE INDIA IN SRILANKA. HENCE, IT IS CLEAR THAT THE BUSINESS OF MANUFACTURING TURBINES IS UNDERTAKEN IN INDIA.HENCE , AN ORDER OF INSTALLING TURBINE OUTSIDE INDIA, CANNOT BE CONSIDE RED AS A BUSINESS OR PROFESSION DONE BY REGEN OUTSIDE INDIA. THE MATE RIALS (TURBINE)INVOLVED IN THAT BUSINESS ARE NOT PROCURED FROM OUTSIDE INDIA. HENCE, THE A O HELD THAT THE ASSESSEES CON TENTION THAT EXECUTION OF WORKS IN SRILANKA ARE NOT THE BUSINES S CARRIED OUT ENTIRELY OUTSIDE INDIA. AFTER EXAMINATION OF THE AG REEMENTS, ARTICLE :-10-: ITA NO.2721/CHNY/2017 12 OF INDIA-SRILANKA DTAA, ARTICLE 12 OF INDIA-GERM ANY , THE LD CIT(A) HAS AFTER DISTINGUISHING THE CASE LAWS RELIE D ON BY THE ASSESSEE, INTER ALIA, HELD , SUPRA, THAT THE SERVI CES OF TECHNICAL PERSONNEL ARE USED IN THE INSTALLATION OF WIND TURB INES AND HENCE THE SERVICES RENDERED BY WIND FORCE PVT. LTD. TO RE GEN POWER TECH FOR ITS PROJECTS IN SRILANKA ARE IN THE NATURE OF FEE FOR TECHNICAL SERVICES AND THE PAYMENTS MADE TO M/S WIN DFORCE PRIVATE LIMITED, SRILANKA FOR ERECTION AND COMMISSI ON SERVICES RENDERED TO CUSTOMERS OUTSIDE INDIA ARE ALSO IN THE NATURE OF ROYALTY AS IT INVOLVES THE PAYMENT FOR THE RIGHT TO USE INDUSTRIAL, COMMERCIAL, OR SCIENTIFIC EQUIPMENT, AS THE PRESENT PAYMENT IS TOWARDS HIRING OF CRANES AND HENCE IN THE NATURE OF RIGHT TO USE INDUSTRIAL AND AS PER CLAUSE (2) OF ARTICLE 12 OF DTAA, THE PAYMENTS MADE TOWARDS THE SERVICES RENDERED BY WFPL , SRILANKA ARE LIABLE TO WITHHOLDING TAX AT 10%. SIMILARLY, ON THE PAYMENTS MADE FOR REPAIR SERVICE TO NON RESIDENT OF GERMANY, THE LD CIT(A), INTER ALIA, HELD, SUPRA, THAT IT IS IN THE NATURE OF FTS, RIGHTLY TREATED AS INCOME CHARGEABLE TO TAX IN INDI A AND HENCE LIABLE TO TDS. THEREFORE, THE AO HAS RIGHTLY LEVIE D TAX AND INTEREST U/S 201(1) & U/S 201(1A) OF THE ACT. SINCE THE ASSE SSEE PROVIDED FULL TURNKEY INSTALLATIONS FOR WIND POWER PROJECTS FOR THE CUSTOMERS :-11-: ITA NO.2721/CHNY/2017 OUTSIDE INDIA AND THUS THE ASSESSEE HAS FULFILL ED /RENDERED ITS TURNKEY PROJECTS OUTSIDE INDIA BY AVAILING THE IMPU GNED SERVICES. THEREFORE, ITS BUSINESS IS NOT CARRIED OUT ENTIRE LY OUTSIDE INDIA. IN THE FACTS AND CIRCUMSTANCES, WE DO NOT FIND ANY REA SON TO INTERFERE WITH THE ORDER OF THE LD CIT(A).THE CORRESPONDING GROUNDS OF THE ASSESSEE ARE DISMISSED. 6. THE NEXT ISSUE IS THAT THE ASSESSEE HAD PURCHASE D SOFTWARE CALLED WINDPRO FROM EMD INTERNATIONAL A/S, DENMA RK FOR RS.5,23,545/-. THE ASSESSING OFFICER HELD THAT THE PAYMENT MADE FOR PURCHASE OF SOFTWARE AMOUNTS TO ROYALTY AS PER EXPLANATION 4 TO SECTION 9(1)(VI) OF THE ACT AND AS PER ARTICLE 13(3 ) OF THE INDO- DENMAK DTAA R.W.S 90 OF THE ACT, IT IS LIABLE TO TAX IN INDIA. SINCE THE ASSESSEE FAILED TO DEDUCT TAX ON THE REMITTANC ES MADE TOWARDS PURCHASE OF SOFTWARE U/S 201(1) AND 201(1A) , THE AO HELD THAT THE ASSESSEE IS LIABLE TO PAY THE TAX A ND INTEREST THEREON AND LEVIED ACCORDINGLY. ON APPEAL , THE LD CIT(A) D ISMISSED THE APPEAL. 6.1 IN THIS REGARD, THE LD AR SUBMITTED THAT THE E XPLANATION 4 TO SECTION 9(1)(VI) WAS INTRODUCED IN FINANCE ACT, 201 2 WITH RETROSPECTIVE EFFECT FROM 01-06-1976 TO INCLUDE PAY MENTS MADE FOR :-12-: ITA NO.2721/CHNY/2017 RIGHTS TO USE A SOFTWARE WITHIN THE MEANING OF ROYA LTY.HOWEVER, THE TERM ROYALTY AS PER INDO-DENMARK DTAA WAS NOT AMENDED TO INCLUDE PAYMENTS MADE FOR RIGHTS TO USE A SOFTWARE, WHICH IS READ AS UNDER: ARTICLE 13 ---------------- (3) THE TERM ROYALTIES AS USED IN THIS ARTICLE ME ANS PAYMENTS OF ANY KIND RECEIVED AS A CONSIDERATION FOR THE USE OF , OR THE RIGHT TO USE, ANY COPYRIGHT OF LITERARY, ARTISTIC OR SCIENTI FIC WORK INCLUDING CINEMA TO GRAPH FILM OR FILMS OR TAPES USED FOR RAD IO OR TELEVISION BROADCASTING, ANY PATENT, TRADE MARK, DESIGN OR MOD EL, PLAN, SECRET FORMULA OR PROCESS OR FOR THE USE OF, OR THE RIGHT TO USE, INDUSTRIAL, COMMERCIAL OR SCIENTIFIC EQUIPMENT, OR FOR INFORMATION CONCERNING INDUSTRIAL, COMMERCIAL OR SCIENTIFIC EXP ERIENCE.SINCE AS PER THE PROVISIONS OF INDO-DENMARK DTAA PURCHASE OF PACKAGED SOFTWARE ISOUTSIDE THE DEFINITION OR SCOPE OF ROYALTY OR FTS, THE PROVISIONS OF DTAA, BEING MOREBENEFICIAL P REVAILS OVER THE PROVISIONS OF THE ACT AS HELD IN THE DECISION O F THE APEX COURT IN THE CASE OF UNION OF INDIA V. AZADI BACHAO ANDOLAN (2003) 263 ITR 705/132 TAXMAN 373. FURTHER, HE RELI ED ON THE FOLLOWING CASES,WHEREIN IT WAS HELD THAT THE AMENDE DPROVISIONS OF THE DOMESTIC LAW CANNOT BE READ INTO THE DTAA: 1. ADIT V. FIRST ADVANTAGE (P.) LTD [2017] 77 TAXMA NN.COM 195 (MUMBAI - TRIB.) 2. DY. DIT (IT) V. RELIANCE INDUSTRIES LTD. [2016] 159 ITD 208/69 TAXMANN.COM 311(MUM. - TRIB.) 3.CAPGEMINI BUSINESS SERVICES (INDIA) LTD. V. ASSTT . CIT 120161 158 ITD 1/68 TAXMANN.COM 36 (MUM.- TUB.) 4. FINANCIAL SOFTWARE & SYSTEMS (P.) LTD. VS. DCIT / ACIT COMPANY CIRCLE 11(1), CHENNAI [2014] 47 TAXMANN.COM 410 6.2 FURTHER, THE LD AR SUBMITTED THAT IN THE CASE O F FINANCIAL SOFTWARE & SYSTEMS (P.) LTD. VS. DCIT / ACIT COMPAN Y CIRCLE 11(1), CHENNAI [2014] 47 TAXMANN.COM 410 WHEREIN IN PARA 54, THIS TRIBUNAL HAS HELD AS UNDER: :-13-: ITA NO.2721/CHNY/2017 ANYHOW, EVEN IF THE AMENDMENT BROUGHT IN SEC. 9(1) (VI) BY FINANCE ACT, 2012, IS CONSIDEREDAS A MILESTONE, THE JUDGMENT RENDERED BY THE HONBLE DELHI HIGH COURT IN THE CAS E OF INFRASOFT LTD. (SUPRA,), REALLY SUPPORTS THE ARGUMENT OF THE ASSESSEE. IN THE SAID DECISION, EVENAFTER THE AMENDMENT, THE HONBLE DELHI HIGH COURT HAS HELD THAT THE AMOUNT RECEIVED BY THEASSES SEE FROM A NON-RESIDENT COMPANY FOR GRANTING LICENSE TO USE CO PYRIGHT SOFTWARE TO ITSOWN BUSINESS PURPOSES COULD NOT BE B ROUGHT TO TAX AS ROYALTY UNDER ARTICLE 12(3) OF INDO-US DTAA. AND THE MUMBAI TRIBUNAL DECISION IN THE CASE OF D EPUTY DIRECTOR OF LNCOME-TAX (IT)2(1) VS. WORKS CORPN (2012) 18 TA XMANN.COM 189 (MUM) WHEREIN IT IS HELD THAT WHEN SHRINK WRAP SOFTWARE IS SOLD, THE CONSIDERATION IS PAID FOR RIGHT TO USE S OFTWARE AND SUCH CONSIDERATION IS NOT ROYALTY. THEREFORE, THE LD.AR PRAYED THAT THE ASSESSING OFFICER MAY BE DIRECTED NOT TO TREAT THE ASSESSEE IN DEFAULT U/S 201/201(1A) AND DELETE THE TAXES AND I NTEREST LEVIED U/S 201 (1A). PER CONTRA, THE LD DR SUPPORTED THE O RDERS OF THE LOWER AUTHORITIES. 7. WE HAVE HEARD THE RIVAL SUBMISSIONS, GONE THROUG H RELEVANT MATERIAL AND FIND FORCE IN THE LD.AR S SUBMISSIONS , SUPRA. WE HOLD :-14-: ITA NO.2721/CHNY/2017 THAT THE IMPUGNED CONSIDERATION IS PAID FOR THE PURCHASE OF SOFTWARE, IT IS PAID FOR RIGHT TO USE SOFTWARE AN D HENCE SUCH CONSIDERATION IS NOT ROYALTY. THEREFORE, WE DIRECT THE A.O NOT TO TREAT THE ASSESSEE IN DEFAULT U/S 201/201(1A) AND DELETE THE TAXES AND INTEREST LEVIED U/S 201 (1A) ON THIS ISSUE. THE CORRESPONDING GROUNDS OF THE ASSESSEE ARE ALLOWED. 8. THE NEXT ISSUE IS THAT THE ASSESSEE HAD MADE REM ITTANCE OF RS.12,01,000/- TO M/S ERNST AND YOUNG, UAE IN CONNE CTION WITH A MARKET STUDY FOR WIND ENERGY RENDERED BY ERNST AND YOUNG IN UAE.NO TDS WAS DEDUCTED. THE ASSESSING OFFICER HELD THAT THE SAID MARKET STUDY IS IN THE NATURE OF INFORMATION C ONCERNING COMMERCIAL EXPERIENCE AND HENCE THE SAME AMOUNTS TO ROYALTY UNDER LNDO-UAE DTAA. SINCE THE ASSESSEE FAILED T O DEDUCT TAX ON THE REMITTANCES, THE AO HELD THAT THE ASSESSE E IS LIABLE TO PAY THE TAX AND INTEREST THEREON U/S 201/201(1A) AN D LEVIED ACCORDINGLY. ON APPEAL, THE LD.CIT(A) DISMISSED THE APPEAL. 8.1 IN THIS REGARD, THE LD AR SUBMITTED THAT THE MARKET SURVEY WAS DONE IN UAE FOR EARNING THE INCOME IN RELATION TO SALE IN UAE, WHICH AMOUNTS TO BUSINESS CONNECTION OUTSIDE INDIA. HENCE, AS :-15-: ITA NO.2721/CHNY/2017 PER THE PROVISIONS OF SECTION 9(1)(VII)(B) OF THE A CT, WHICH IS READ AS UNDER: 9. (1) THE FOLLOWING INCOMES SHALL BE DEEMED TO AC CRUE OR ARISE IN INDIA: (VII) INCOME BY WAY OF FEES FOR TECHNICAL SERVICES PAYABLE BY ------- (B) A PERSON WHO IS A RESIDENT, EXCEPT WHERE THE FE ES ARE PAYABLE IN RESPECT OF SERVICESIN A BUSINESS OR PROFESSION C ARRIED ON BY SUCH PERSON OUTSIDE INDIA OR FOR THEOF MAKING OR EARNING ANY INCOME FROM ANY SOURCE OUTSIDE INDIA; OR... THEREFORE, THE REMITTANCES MADE TO ERNST & YOUNG UAE IS NOT TAXABLE IN INDIA. IN THIS REGARD, THE LD AR RELIED ON THE DECISION OF KOTAK MAHINDRA BANK LTD. V. ITO IN [2016] 74246 (MU MBAI - TRIB.) SINCE THE SAID PAYMENTS ARE NOT SUBJECT TO TAX IN I NDIA, IT IS NOT LIABLE TO TDS AS HELD BY THE HONBLE SUPREME COURT IN THE CASE OF GE INDIA TECHNOLOGY CEN. (P.) LTD. V. CIT IN [2010] 193 TAXMAN 234 (SC)AND HENCE PRAYED THAT THE AO MAY BE DIRECT ED NOT TO TREAT THE ASSESSEE IN DEFAULT AND DELETE THE TAXES AND INTEREST LEVIED PRAY THAT YOUR AUTHORITY MAY DIRECT THE ASSE SSING OFFICER NOT TO TREAT THE ASSESSEE IN DEFAULT U/S 201/201(1A) OF THE ACT AND DELETE THE TAXES AND INTEREST LEVIED U/S 201(1A). :-16-: ITA NO.2721/CHNY/2017 8.2 PER CONTRA, THE LD DR INVITED OUR ATTENTION TO THE ORDER OF THE LD CIT(A) AND SUPPORTED IT. THE RELEVANTPORTION IS EXTRACTED AS UNDER : I HAVE CAREFULLY CONSIDERED THE APPELLANTS SUBMISSION ON FEE FOR PROFESSIONAL SERVICES. THE APPELLANT HAS MADE A REMITTANCE OF RS.12,O1,000 TO M/S. ERNST & YOUNG, U AE IN CONNECTION WITH A MARKET STUDY FOR WIND ENERGY REND ERED BY E&Y AND APPELLANT HAD NOT DEDUCTED TDS ON THE SAME FOR THE REASON THAT CONSULTANCY SERVICES AND NOT FTS AS PER INDIA UAE TREATY, NO MAKE AVAILABLE OF TECHNICAL KNOWLEDGE, IT IS JUS T A MARKET STUDY REPORT. APPLYING ARTICLE 5/7/14 OF DTAA WITH UAE IT HAS BEEN CONCLUDED AS BUSINESS PROFITS AND TAXABLE IN T HE RECEIVING END AND HENCE NO TDS HAS BEEN DEDUCTED ON THIS. SERVICES RENDERED OUTSIDE INDIA AND HENCE NOT TAXAB LE. THEY DONT HAVE PE IN INDIA. IN THIS REGARD, IT WOULD BE PERTINENT TO QUOTE DEFI NITION OF MARKET STUDY AS PER WIKIPEDIA MARKET RESEARCH PROVIDES IMPORTANT INFORMATION T O IDENTIFY AND ANALYSE THE MARKET NEED, MARKET SIZE AND COMPET ITION. THE FACTORS THAT ARE INVESTIGATED THRO MARKET RESE ARCH INCLUDE MARKET INFORMATION/ SEGMENTATION/ TRENDS & SWOT ANA LYSIS. TAXABILITY AS PER INCOME TAX ACT: SECTION 9 (1)(VII) OF THE ACT READS AS UNDER: 9. (1) THE FOLLOWING INCOMES SHALL BE DEEMED TO ACC RUE OR ARISE IN INDIA: (VII) INCOME BY WAY OF FEES FOR TE CHNICAL SERVICES PAYABLE BY (B) A PERSON WHO IS A RESIDENT, EXCEPT WHERE THE RO YALTY IS PAYABLE IN RESPECT OF ANY RIGHT, PROPERTY OR INFORM ATION USED OR SERVICES UTILISED FOR THE PURPOSES OF A BUSINESS OR PROFESSION CARRIED ON BY SUCH PERSON OUTSIDE INDIA OR FOR THE PURPOSES OF MAKING OR EARNING ANY INCOME FROM ANY SOURCE OUTSID E INDIA; OR :-17-: ITA NO.2721/CHNY/2017 EXPLANATION 2.FOR THE PURPOSES OF THIS CLAUSE, FE ES FOR TECHNICAL SERVICES MEANS ANY CONSIDERATION (INCLUD ING ANY LUMP SUM CONSIDERATION) FOR THE RENDERING OF ANY MA NAGERIAL, TECHNICAL OR CONSULTANCY SERVICES (INCLUDING THE PR OVISION OF SERVICES OF TECHNICAL OR OTHER PERSONNEL) BUT DOES NOT INCLUDE CONSIDERATION FOR ANY CONSTRUCTION ASSEMBLY, MINING OR LIKE PROJECT UNDERTAKEN BY THE RECIPIENT OR CONSIDERATIO N WHICH WOULD BE INCOME OF THE RECIPIENT CHARGEABLE UNDER T HE HEAD SALARIES. EXPLANATION FOR THE REMOVAL OF DOUBTS, IT IS HERE BY DECLARED THAT FOR THE PURPOSES OF THIS SECTION, INCOME OF A NON-RESIDENT SHALL BE DEEMED TO ACCRUE OR ARISE IN INDIA UNDER C LAUSE (V) OR CLAUSE (VI) OR CLAUSE(VII) OF SUBSECTION. (1) AND S HALL BE INCLUDED IN THE TOTAL INCOME OF THE NON-RESIDENT, W HETHER OR NOT,- THE NON-RESIDENT HAS A RESIDENCE OR PLACE OF BUSINE SS OR BUSINESS CONNECTION IN INDIA; OR THE NON-RESIDENT HAS RENDERED SERVICES IN INDIA. HENCE THE MARKET STUDY BEING IN THE NATURE OF TECHN ICAL SERVICES THE REMITTANCES IS TREATED AS FTS INCOME I N THE HANDS OF E&Y AND IS LIABLE TO TDS. WITHOUT PREJUDICE TO THE ABOVE, THE SAID MARKET STU DY IS IN THE NATURE OF INFORMATION CONCERNING COMMERCIAL EXPERIE NCE AND HENCE IS ROYALTY UNDER INDO UAE DTAA. TO QUOTE THE SAME THE TERM ROYALTIES AS USED IN ARTICLE MEANS PAYM ENT OF ANY KIND RECEIVED AS A CONSIDERATION FOR THE USE OF, OR THE RIGHT TO USE, ANY COPYRIGHT OF LITERATELY, ARTISTIC OR SCIEN TIFIC WORK, INCLUDING CINEMATOGRAPHY FILMS, OR FILMS TAPES USED FOR RADIO OR TEE VISION BROADCASTING, ANY PATENT, TRADE MARK, ARTISTIC OR SCIENTIFIC WORK, INCLUDING CINEMATOGRAPHY FILMS OR TAPES USED FOR RADIO OR TELEVISION BROADCASTING, AND PATENT, T RADEMARK, DESIGN OR MODEL, PLAN, SECRET FORMULA OR PROCESS, O R FOR THE USE OF OR THE RIGHT TO USE, INDUSTRIAL, COMMERCIAL OR SCIENTIFIC EQUIPMENT, OR FOR INFORMATION CONCERNING INDUSTRIAL , COMMERCIAL OR SCIENTIFIC EXPERIENCE BUT DO NOT INCL UDE ROYALTIES OR OTHER PAYMENTS IN RESPECT OF THE OPERA TION OF MINES OR QUARRIES OR EXPLOITATION OF, PETROLEUM OR OTHER NATURAL RESOURCES.... THEREFORE I UPHELD THE ACTION OF THE AO TO TREAT TH E PAYMENT OF CONSULTANCY CHARGES AMOUNTING TO RS.12,01,000/- PAI D TO :-18-: ITA NO.2721/CHNY/2017 EARNST AND YOUNG UAE AS FTS OR ROYALTY LIABLE TO 10 % TDS AND AS APPELLANT HAS FAILED TO DO SO, HENCE APPELLANT IS IN DEFAULT IN VIEW OF SEC 201(1) OF THE ACT AND THEREF ORE THE AO HAS RIGHTLY LEVIED TAX AND INTEREST U/S 201(1) & U/ S 201(1A) OF THE ACT. THE GROUND OF APPEAL IS THEREFORE DISMISSE D. 9. WE HAVE HEARD THE RIVAL SUBMISSIONS AND GONE THR OUGH RELEVANT MATERIAL.AFTER EXAMINATION OF THE DEFINITI ON OF MARKET STUDY AND PROVISIONS OF SECTION 9 (1) (VII), THE INDO UAE DTAA, THE LD CIT(A) HAS, INTER ALIA, HELD, SUPRA, THAT THE MARKE T STUDY BEING IN THE NATURE OF TECHNICAL SERVICES, IS IN THE NATURE OF INFORMATION CONCERNING COMMERCIAL EXPERIENCE AND HENCE ROYALTY . THEREFORE, THE IMPUGNED REMITTANCES ARE TREATED AS FTS INCOM E IN THE HANDS OF E & Y AND IS LIABLE TO TDS. SINCE, THE AS SESSEE HAS NOT PLACED ANY MATERIAL TO DISLODGE THE FINDINGS RECORD ED BY THE LD CIT(A), WE DO NOT FIND ANY REASON TO INTERFERE WITH HIS ORDER. THE CORRESPONDING GROUNDS OF THE ASSESSEE FAILS. 10. IN RESULT, THE ASSESSEES APPEAL IS PARTLY ALL OWED. ORDER PRONOUNCED ON 28 TH FEBRUARY, 2019 AT CHENNAI. SD/- SD/- ( ... ) ( . ) (N.R.S.GANESAN) (S.JAYARAMAN) ( ! / JUDICIAL MEMBER) ( ! / ACCOUNTANT MEMBER) /CHENNAI, $ /DATED: 28 TH FEBRUARY , 2019 SOMU :-19-: ITA NO.2721/CHNY/2017 ()*) /COPY TO: 1. / APPELLANT 2. /RESPONDENT 3. + ) (/CIT(A) 4. + /CIT 5. ). /DR 6. 1 /GF