ADIT(IT)-3(2), MUMBAI V. M/S. BUREAU VERITAS INDIAN DIVISION, MUMBAI

ITA 3680/MUM/2009

• Counselvise Citation: 368019914 RSA 2009
• Duration Of Justice: 2 year(s) 5 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-11-2011
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: L
• Next Hearing Date: 22-11-2011
• Assessment Year: 2006-2007
• Appeal Filed On: 05-06-2009
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: G GURUSWAMI
• Keywords: Permanent establishment

Judgement Text

IN THE INCOME TAX APPELLATE TRIB UNAL MUMBAI BENCHES L, MUMBAI BEFORE SHRI R.S.SYAL, AM AND SHRI N.V.VASUDEVAN, JM ITA NO.3680/MUM/2009 : ASST.YEAR 2006-2007 THE ASSTT.DIRECTOR OF INCOME TAX (INTERNATIONAL TAXATION) 3(2) MUMBAI. M/S.BUREAU VERITAS INDIAN DIVISION C/O. N.VARMA & ASSOCIATES 56/B, MITTAL TOWER, 210 NARIMAN POINT MUMBAI 400 021. PAN :AAACB1465H. (APPELLANT) VS. (RESPONDENT) APPELLANT BY : SHRI G.GURUSWAMI RESPONDENT BY : SHRI DEEPAK TRALSHAWALA DATE OF HEARING : 22.11.2011 DATE OF PRONOUNCEMENT : 25.11.2011 O R D E R PER R.S.SYAL, AM : THIS APPEAL BY THE REVENUE IS DIRECTED AGAINST THE ORDER PASSED BY THE COMMISSIONER OF INCOME-TAX (APPEALS) ON 06.03.2009 IN RELATION TO THE ASSESSMENT YEAR 2006-2007. 2. THE ONLY EFFECTIVE GROUND IS AS UNDER:- ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD.CIT(A) ERRED IN DELETING THE ADDITION OF ` 50,22,533 AS REIMBURSEMENT OF SHARE OF TECHNICAL AND ADMINISTRATIVE EXPENSES, HOLDING THAT THIS AMOUNT NOT BEING AN ALLOWABLE DEDUCTION IN THE HAND S OF INDIAN PERMANENT ESTABLISHMENT CANNOT BE BROUGHT TO TAX IN THE HANDS OF HEAD OFFICE AS INCOME. 3. BRIEFLY STATED THE FACTS OF THE CASE ARE THAT TH E ASSESSEE CLAIMED DEDUCTION OF ` 50,22,533 AS REIMBURSEMENT OF EXPENSES. THE ASSESSI NG OFFICER OPINED THAT DEDUCTION OF TAX AT SOURCE WAS REQUIRED TO BE MADE FROM THIS PAYMENT. INVOKING THE PROVISIONS OF SECTION 40(A)(I), HE MADE DISALLOWAN CE OF THE SAID SUM. THE LEARNED CIT(A), FOLLOWING HIS ORDER FOR ASSESSMENT YEAR 200 3-2004, DELETED THE ADDITION, AGAINST WHICH THE REVENUE HAS COME UP IN APPEAL BEF ORE US. ITA NO.3680/MUM/2009 M/S.BUREAU VERITAS INDIAN DIVISION. 2 4. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE RELEVANT MATERIAL ON RECORD. IT IS OBSERVED THAT SIMILAR ISSUE CAME UP B EFORE THE TRIBUNAL IN ASSESSEES OWN CASE FOR ASSESSMENT YEAR 2002-2003 AND THE TRIBUNAL VIDE ITS ORDER DATED 29 TH OCTOBER, 2009 IN ITA NO.3070/MUM/2006 DECIDED IT IN ASSESSEE S FAVOUR BY HOLDING THAT SIMILAR AMOUNT WAS NOT LIABLE TO BE BROUGHT TO TAX. COPY OF THE SAID ORDER IS PLACED ON RECORD. THE LEARNED DEPARTMENTAL REPRESENTATIVE FAI RLY CONCEDED THAT THE ISSUE UNDER CONSIDERATION HAS BEEN DECIDED BY THE TRIBUNAL IN A SSESSEES FAVOUR INASMUCH AS NO DISTINGUISHING FEATURE IN THE FACTS OF THE INSTANT YEAR AND THE EARLIER YEAR, WAS BROUGHT TO OUR NOTICE. IN VIEW OF THE RIVAL BUT COMMON SUBM ISSIONS AND RESPECTFULLY FOLLOWING THE PRECEDENT, WE UPHOLD THE IMPUGNED ORDER ON THIS SCORE BY HOLDING THAT REIMBURSEMENT OF EXPENSES IN THE PRESENT CIRCUMSTAN CES CANNOT BE BROUGHT TO TAX IN THE HANDS OF HEAD OFFICE AS INCOME AND HENCE SECTIO N 40(A)(I) CANNOT APPLY. 5. IN THE RESULT, THE APPEAL OF THE REVENUE IS DISM ISSED. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 25 TH DAY OF NOVEMBER, 2011. SD/- SD/- (N.V.VASUDEVAN) (R.S.SYAL) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI : 25 TH NOVEMBER, 2011. DEVDAS* 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.