DDIT (IT) 2(1), MUMBAI V. RELIANCE GLOBALCOMM LTD, MUMBAI

ITA 3538/MUM/2013

• Counselvise Citation: [2015] 134 COUNSELVISE.COM (IT) 3016 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 5 month(s) 13 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-10-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: D
• Next Hearing Date: 02-03-2015
• Assessment Year: 2007-2008
• Appeal Filed On: 06-05-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: K RAVI RAMACHANDRAN
• Section: 143(3)

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL D BE NCH, MUMBAI BEFORE SHRI N.K. BILLAIYA, ACCOUNTANT MEMBER AND SHRI AMARJIT SINGH, JUDICIAL MEMBER / I .T.A. NO. 3538/MUM/2013 ( / ASSESSMENT YEAR:2007-08 THE DDIT(IT)-2(1), SCINDIA HOUSE, 1 ST FLOOR, BALLARD ESTATE, MUMBAI-400 038 / VS. M/S. RELIANCE GLOBALCOMM LTD., C/O M/S. S.V. DOSHI & CO., 602-E, NEELKANTH, NEXT TO ROC BLDG., 98, MARINE DRIVE, MUMBAI-400 002 ./ ./ PAN/GIR NO. : AAACF 4015D ( / APPELLANT ) .. ( / RESPONDENT ) / APPELLANT BY: SHRI K. RAVI RAMA CHANDRAN / RESPONDENT BY: SHRI JITENDRA SANGHAVI / DATE OF HEARING :19.10.2015 ! / DATE OF PRONOUNCEMENT :19.10.2015 '# / O R D E R PER N.K. BILLAIYA, AM: THIS APPEAL BY THE REVENUE IS PREFERRED AGAINST THE ORDER OF THE LD. CIT(A)-11,MUMBAI DATED 28.2.2013 PERTAININ G TO ASSESSMENT YEAR 2007-08. 2. THE SOLE GRIEVANCE OF THE REVENUE IS THAT THE LD . CIT(A) ERRED IN DELETING THE PENALTY U/S. 271(1)(C) OF THE ACT. ITA. NO.3538/M/2013 2 3. THE ROOTS FOR THE LEVY OF PENALTY LIE IN THE ASS ESSMENT ORDER DATED 5.2.2010 MADE U/S. 143(3) R.W. SECT. 144C(3) OF THE ACT. WHILE SCRUTINIZING THE RETURN OF INCOME, THE ASSESSING OF FICER FOUND THAT THE ASSESSEE HAS RECEIVED $21,64,114 FROM VIDESH SANCH AR NIGAM LTD ON ACCOUNT OF PROVISIONS OF STANDBY MAINTENANCE ACT IVITIES. THE AO FURTHER FOUND THAT THE ASSESSEE HAS CLAIMED THIS AM OUNT AS ITS INCOME FROM NORMAL BUSINESS ACTIVITIES AND NOT FEES FOR TECHNICAL SERVICES. 4. AFTER CONSIDERING THE REPLY OF THE ASSESSEE, THE AO COMPLETED THE ASSESSMENT BY DETERMINING THE TOTAL TAXABLE INC OME IN RESPECT OF THE IMPUGNED AMOUNT AS FEES FOR TECHNICAL SERVICES. 4.1. THE ACTION OF THE AO WAS CONFIRMED BY THE LD. CIT(A) AND THEREFORE THE OFFICER HAS PROCEEDED WITH THE PENALT Y PROCEEDINGS U/S. 271(1)(C) OF THE ACT AND DIRECTED THE ASSESSEE TO PAY BY WAY OF PENALTY A SUM OF RS. 1,99,65,617/-. 5. THE ASSESSEE CARRIED THE MATTER BEFORE THE LD. C IT(A) AND THE CIT(A) WAS CONVINCED THAT THIS IS NOT A FIT CASE FO R THE LEVY OF PENALTY. 6. BEFORE US, THE LD. COUNSEL FOR THE ASSESSEE STRA IGHT AWAY DREW OUR ATTENTION TO THE DECISION OF THE TRIBUNAL IN QU ANTUM PROCEEDINGS AND POINTED OUT THAT THE TRIBUNAL HAS DELETED THE I MPUGNED DISALLOWANCE/ADDITIONS VIDE ORDER DATED 15.6.2015 I N ITA NO. 4685/M/2011. 7. THE LD. DEPARTMENTAL REPRESENTATIVE COULD NOT BR ING ANY DISTINGUISHING DECISION IN FAVOUR OF THE REVENUE. ITA. NO.3538/M/2013 3 8. WE HAVE CAREFULLY PERUSED THE ORDER OF THE TRIBU NAL VIDE IMPUGNED ASSESSMENT YEAR IN ITA NO. 4685/M/2011. WE FIND THAT THE TRIBUNAL AT PARA-11 ON PAGE-12 OF ITS ORDER HAS FOLLOWED EARLIER YEARS PROCEEDINGS AND HELD THAT THE RECEIPT ON ACCO UNT OF STAND BY MAINTENANCE CHARGES IS NOT CHARGEABLE AS FEES FOR T ECHNICAL SERVICES WITHIN THE SCOPE OF SEC. 9(1)(VII) OF THE ACT AND S ET ASIDE THE FINDINGS OF THE LD. CIT(A). 9. SUBLATO FUNDAMENTS CREDIT OPUS MEANING IN THE CASE THE FOUNDATION IS REMOVED, SUPER STRUCTURE FALLS. AS T HE IMPUGNED ADDITION HAVE BEEN REMOVED BY THE ORDER OF THE TRIB UNAL, THE SUPER STRUCTURE, THE LEVY OF PENALTY FALLS. 10. IN THE RESULT, THE APPEAL FILED BY THE REVENUE IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 19 TH OCTOBER, 2015 SD/- SD/- (AMARJIT SINGH ) (N.K. BILLAIYA) $% ' /JUDICIAL MEMBER ' / ACCOUNTANT MEMBER & ' MUMBAI; (' DATED :19 TH OCTOBER, 2015 . % . ./ RJ , SR. PS ITA. NO.3538/M/2013 4 !' #' / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. ) ( ) / THE CIT(A)- 4. ) / CIT 5. *+, %%-. , -.! , & ' / DR, ITAT, MUMBAI 6. ,/0 1 / GUARD FILE. $ / BY ORDER, * % //TRUE COPY// % / $& ' (DY./ASSTT. REGISTRAR) , & ' / ITAT, MUMBAI