DDIT (IT)-4(1), MUMBAI V. M/S. LINKLATERS, MUMBAI

ITA 3058/MUM/2008

• Counselvise Citation: [2010] 135 COUNSELVISE.COM (IT) 3598 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 7 month(s) 22 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-12-2010
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: L1
• Next Hearing Date: 10-06-2010
• Assessment Year: 2003-2004
• Appeal Filed On: 05-05-2008
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: NARENDRA SINGH
• Assessee Lawyers: PRASHANT APTE
• Section: 234B; 195; 208; 2

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES L, MUMBAI BEFORE SHRI R.S.SYAL, AM AND SHRI V.DURGA RAO, JM ITA NOS.3057 & 3058/MUM/2008 : ASST.YEARS 2002-200 3 & 2003-2004 THE DEPUTY DIRECTOR OF INCOME TAX (INTERNATIONAL TAXATION) 4(1) MUMBAI. VS. M/S.LINKLATERS C/O.M/S.DELOITTE HASKINS & SELLS CHARTERED ACCOUNTANTS 264-265, VASWANI CHAMBERS WORLI, MUMBAI 400 030. PA NO.AABFL2160M. (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI NARENDRA SINGH (CIT-DR) RESPONDENT BY : SHRI PRASHANT APTE O R D E R PER R.S.SYAL, AM : THESE TWO APPEALS BY THE REVENUE ARISE OUT OF THE O RDERS PASSED BY THE COMMISSIONER OF INCOME-TAX (APPEALS) ON 28.02.2008 IN RELATION TO THE ASSESSMENT YEAR 2002-2003 & 2003-2004. 2. THE REVENUE IS AGGRIEVED AGAINST THE DIRECTION O F THE LEARNED CIT(A) FOR NOT CHARGING INTEREST U/S.234B AS THE TAX WAS DEDUCTIBL E AT SOURCE IN THIS CASE. 3. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE RELEVANT MATERIAL ON RECORD. THE ASSESSEE IS A NON-RESIDENT FIRM WHOSE I NCOME WAS DETERMINED BY THE ASSESSING OFFICER INTER ALIA CHARGING INTEREST U/S.234B. THE LEARNED CIT(A) HEL D THAT INTEREST IS NOT CHARGEABLE UNDER THIS SECTION INASMUCH AS TAX WAS DEDUCTIBLE AT SOURCE ON ASSESSEES INCOME. SECTION 195 PROVIDES T HAT ANY PERSON RESPONSIBLE FOR PAYING TO A NON-RESIDENT, ANY SUM CHARGEABLE UNDER THE PROVISIONS OF THIS ACT, SHALL AT THE TIME OF CREDIT OF SUCH INCOME TO THE ACCOUNT OF THE PAYEE OR AT THE TIME OF PAYMENT THEREOF, DEDUCT INCOME-TAX THEREON AT THE R ATES IN FORCE. THE ASSESSEE IN THE INSTANT CASE IS A NON-RESIDENT AND HENCE ANY PE RSON RESPONSIBLE FOR PAYING TO IT IS UNDER OBLIGATION FOR DEDUCTING TAX AT SOURCE IF INCOME IS CHARGEABLE TO TAX UNDER ITA NOS.3057 & 3058/MUM/2008 M/S.LINKLATERS. 2 THE ACT. SECTION 208 PROVIDES THAT THE ADVANCE TAX SHALL BE PAYABLE DURING A FINANCIAL YEAR IN EVERY CASE WHERE THE AMOUNT OF SU CH TAX PAYABLE BY THE ASSESSEE DURING THAT YEAR IS FIVE THOUSAND RUPEES OR MORE. SECTION 209(1)(D) STATES THAT THE INCOME-TAX CALCULATED UNDER CLAUSES (A) TO (C) SHAL L BE REDUCED BY THE AMOUNT OF INCOME TAX WHICH WOULD BE DEDUCTIBLE AT SOURCE DURI NG THE SAID FINANCIAL YEAR UNDER ANY PROVISION OF THIS ACT FROM ANY INCOME. BY VIRTUE OF SECTION 195 ALL THE PAYMENTS MADE TO THE ASSESSEE ARE SUBJECTED TO DEDU CTION OF TAX AT SOURCE. UNDER THESE CIRCUMSTANCES, THE ASSESSEE CANNOT BE SAID TO HAVE COMMITTED ANY DEFAULT IN NOT PAYING THE ADVANCE TAX FOR WHICH THE LIABILITY TO PAY INTEREST U/S 234B COULD BE FASTENED ON IT. OUR VIEW IS FORTIFIED BY THE SPECIA L BENCH ORDER OF THE TRIBUNAL IN MOTOROLA INC. VS. DCIT [(2005) 95 ITD 269 (DEL.) (S B), WHICH STANDS IMPLIEDLY AFFIRMED BY THE HONBLE JURISDICTIONAL HIGH COURT I N D.I (INTERNATIONAL TAXATION) VS. NGC NETWORK ASIA LTD. (2009) 222 CTR 86 (BOM) . RESPECTFULLY FOLLOWING THE PRECEDENT, WE ACCEPT THE OPINION OF THE LEARNED CIT(A) ON THIS COUNT IN ORDERING DELETION OF THE LEVY OF INTEREST U/S.234B. 4. IN THE RESULT, BOTH THE APPEALS ARE DISMISSED. ORDER PRONOUNCED ON THIS 27 TH DAY OF DECEMBER, 2010. SD/- SD/- ( V.DURGA RAO ) ( R.S.SYAL ) JUDICIAL MEMBER ACC OUNTANT MEMBER MUMBAI : 27 TH DECEMBER, 2010. DEVDAS* ITA NOS.3057 & 3058/MUM/2008 M/S.LINKLATERS. 3 COPY TO : 1. THE APPELLANT. 2. THE RESPONDENT. 3. THE CIT CONCERNED 4. THE CIT(A) - XXXIII, MUMBAI. 5. THE DR/ITAT, MUMBAI. 6. GUARD FILE. TRUE COPY. BY ORDER ASSISTANT REGISTRAR, ITAT, MUMBAI.