DCIT, New Delhi V. M/s Pramod Export Pvt. Ltd., New Delhi

ITA 4250/DEL/2013

• Counselvise Citation: [2015] 121 COUNSELVISE.COM (IT) 0021 (ITAT-DELHI)
• Duration Of Justice: 1 year(s) 9 month(s) 24 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-05-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: F
• Next Hearing Date: 22-04-2015
• Assessment Year: 2008-2009
• Appeal Filed On: 12-07-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: VIKRAM SAHAY
• Keywords: Double taxation relief; Non-deduction of tax

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL IN THE INCOME TAX APPELLATE TRIBUNAL IN THE INCOME TAX APPELLATE TRIBUNAL IN THE INCOME TAX APPELLATE TRIBUNAL DELHI DELHI DELHI DELHI BENCH BENCH BENCH BENCH F FF F : NEW DELHI : NEW DELHI : NEW DELHI : NEW DELHI BEFORE SHRI G.C. GUPTA BEFORE SHRI G.C. GUPTA BEFORE SHRI G.C. GUPTA BEFORE SHRI G.C. GUPTA, VICE , VICE , VICE , VICE PRESIDENT AND PRESIDENT AND PRESIDENT AND PRESIDENT AND SHRI SHRI SHRI SHRI INTURI RAMA RAO INTURI RAMA RAO INTURI RAMA RAO INTURI RAMA RAO, , , , ACCOUNTANT ACCOUNTANT ACCOUNTANT ACCOUNTANT MEMBER MEMBER MEMBER MEMBER ITA NO ITA NO ITA NO ITA NO . .. . 4250/DEL/2013 4250/DEL/2013 4250/DEL/2013 4250/DEL/2013 ASSESSMENT YEAR ASSESSMENT YEAR ASSESSMENT YEAR ASSESSMENT YEAR : : : : 2008 2008 2008 2008 - -- - 09 0909 09 DEPUTY COMMISSIONER OF DEPUTY COMMISSIONER OF DEPUTY COMMISSIONER OF DEPUTY COMMISSIONER OF INCOME TAX, INCOME TAX, INCOME TAX, INCOME TAX, CIRCLE CIRCLE CIRCLE CIRCLE- -- -14(1), 14(1), 14(1), 14(1), NEW NEW NEW NEW DELHI. DELHI. DELHI. DELHI. VS. VS. VS. VS. M/S PROMED EXPORTS PVT.LTD., M/S PROMED EXPORTS PVT.LTD., M/S PROMED EXPORTS PVT.LTD., M/S PROMED EXPORTS PVT.LTD., 208, ASHIRWAD COMPLEX, 208, ASHIRWAD COMPLEX, 208, ASHIRWAD COMPLEX, 208, ASHIRWAD COMPLEX, D DD D- -- -1, GREEN PARK, 1, GREEN PARK, 1, GREEN PARK, 1, GREEN PARK, NEW DELHI NEW DELHI NEW DELHI NEW DELHI 110 016. 110 016. 110 016. 110 016. PAN : AAACP1612Q. PAN : AAACP1612Q. PAN : AAACP1612Q. PAN : AAACP1612Q. (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI VIKRAM SAHAY, SR.DR. RESPONDENT BY : SHRI V.P. GUPTA, ADVOCATE. DATE OF HEARING : 22.04.2015 22.04.2015 22.04.2015 22.04.2015 DATE OF PRONOUNCEMENT : 06.05.2015 06.05.2015 06.05.2015 06.05.2015 ORDER ORDER ORDER ORDER PER G.C. GUPTA PER G.C. GUPTA PER G.C. GUPTA PER G.C. GUPTA, VP , VP , VP , VP : :: : THIS APPEAL BY THE REVENUE FOR THE ASSESSMENT YEAR 2008-09 IS DIRECTED AGAINST THE ORDER OF LEARNED CIT(A)-XVII, NEW DELHI DATED 29 TH APRIL, 2013. 2. GROUND NO.1 AND 2 OF THE REVENUES APPEAL READ A S UNDER:- 1. THE LD.CIT(A) HAS ERRED IN LAW AND ON THE FACTS IN DELETING THE DISALLOWANCE OF RS.13,39,707/- MADE BY THE AO ON ACCOUNT OF NON-DEDUCTION OF TAX OUT OF PAYMEN TS MADE TO NRIS. 2. THE LD.CIT(A) HAS ERRED IN LAW AND ON THE FACTS IN NOT APPRECIATING THE FACT THAT PROVISIONS OF SECTION 19 5 OF INCOME TAX ACT, 1961 ARE SQUARELY APPLICABLE ON THE ASSESSEE COMPANY. ITA-4250/DEL/2013 2 3. LEARNED DR SUBMITTED THAT THE LEARNED CIT(A) HAS NOT GIVEN ANY REASON FOR DECIDING THE ISSUE IN FAVOUR OF THE ASSE SSEE. HE REFERRED TO PARAGRAPH 6.2 OF THE APPELLATE ORDER PASSED BY THE CIT(A) IN WHICH THE DISALLOWANCE MADE UNDER SECTION 40(A)(I) WAS DELETE D BY HIM ON THE ONLY PLEA THAT THERE IS NO MENTION IN THE ASSESSMEN T ORDER THAT THE PAYMENTS MADE TO NON-RESIDENTS IN USA WERE FOR SERV ICES RENDERED IN INDIA OR THESE PAYMENTS WERE TAXABLE IN INDIA. HE REFERRED TO THE RELEVANT PORTION OF THE ASSESSMENT ORDER IN SUPPORT OF THE CASE OF THE REVENUE IN WHICH THE ASSESSING OFFICER HAS PASSED A DETAILED ORDER WHILE MAKING THE DISALLOWANCE. HE RELIED ON THE OR DER OF THE ASSESSING OFFICER. 4. LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE ISSUE HAS BEEN DISCUSSED IN DETAIL BY THE LEARNED CIT(A). HE SUBMITTED THAT THE ASSESSEE HAS CLAIMED BEFORE THE ASSESSING OFFICER T HAT THESE SERVICES DO NOT FALL WITHIN THE DEFINITION OF FEES FOR INCLU DED SERVICES UNDER ARTICLE 12 OF THE DTAA WITH USA. HE SUBMITTED THAT THIS FACT HAS BEEN RECORDED BY THE ASSESSING OFFICER IN PARAGRAPH 6.1 OF THE ASSESSMENT ORDER. HE ALSO REFERRED TO THE RELEVANT PORTION OF THE APPELLATE ORDER PASSED BY THE LEARNED CIT(A) WHEREIN THE ISSUE WAS DISCUSSED IN DETAIL BY HIM AND THE DECISIONS OF THE HONBLE COURT APPLI CABLE TO THE FACTS OF THE CASE HAVE BEEN DISCUSSED. HE RELIED ON THE ORD ER OF THE LEARNED CIT(A). 5. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND HAV E PERUSED THE ORDER OF THE ASSESSING OFFICER AND THE CIT(A). WE F IND THAT THE ASSESSEE HAS CLAIMED AT THE STAGE OF ASSESSMENT ITS ELF THAT THESE SERVICES DO NOT FALL WITHIN THE DEFINITION OF FEES FOR INCLUDED SERVICES UNDER ARTICLE 12 OF THE DTAA WITH USA. THE ASSESSI NG OFFICER HAS MADE THE DISALLOWANCE BASED ON THE DECISION OF DELH I TRIBUNAL IN THE CASE OF VAN OORD ACZ INDIA (P) LTD. VS. CIT WHICH W AS OVERRULED BY THE DECISION OF HON'BLE DELHI HIGH COURT REPORTED I N 323 ITR 130 ITA-4250/DEL/2013 3 (DELHI). LEARNED CIT(A) HAS RECORDED THE DECISION OF HON'BLE SUPREME COURT IN GE INDIA TECHNOLOGY CENTRE P.LTD. VS. CIT AND ANOTHER [2010] 327 ITR 456 (SC) WHEREIN IT IS HELD THAT PRO VISIONS OF SECTION 195(2) HAVE NO APPLICATION IN CASES WHERE PAYMENTS TO NON-RESIDENTS ARE NOT CHARGEABLE TO TAX IN INDIA. THE CIT(A) CON CLUDED THAT ONLY IF THE AMOUNT PAID TO NON-RESIDENTS IS TAXABLE IN INDI A, THE OBLIGATION TO DEDUCT TAX OCCURS AND WHEN THE AMOUNT IS NOT TAXABL E IN INDIA, PROVISIONS OF SECTION 195 OR 40(A)(I) HAVE NO APPLI CATION. IN THESE FACTS, LEARNED CIT(A) CONCLUDED THAT NO CASE HAD BE EN MADE OUT BY THE REVENUE THAT THE PAYMENT OF ` 13,39,707/- WAS MADE TO NON-RESIDENTS IN USA FOR SERVICES RENDERED IN INDIA OR THESE PAYM ENTS WERE LIABLE TO BE TAXED IN INDIA. THERE BEING NO MISTAKE IN THE O RDER OF LEARNED CIT(A) ON THIS ISSUE, THE SAME IS CONFIRMED AND GRO UNDS OF APPEAL NO.1 & 2 OF THE REVENUE ARE DISMISSED. 6. IN THE RESULT, THE APPEAL OF THE REVENUE IS DISM ISSED. DECISION PRONOUNCED IN THE OPEN COURT ON 6 TH MAY, 2015. SD/- SD/- ( (( ( INTURI RAMA RAO INTURI RAMA RAO INTURI RAMA RAO INTURI RAMA RAO ) )) ) (G. (G. (G. (G. C. GUPTA C. GUPTA C. GUPTA C. GUPTA ) )) ) ACCOUNTANT ACCOUNTANT ACCOUNTANT ACCOUNTANT MEMBER MEMBER MEMBER MEMBER VICE PRESIDENT VICE PRESIDENT VICE PRESIDENT VICE PRESIDENT VK. COPY FORWARDED TO: - 1. APPELLANT : DEPUTY COMMISSIONER OF INC DEPUTY COMMISSIONER OF INC DEPUTY COMMISSIONER OF INC DEPUTY COMMISSIONER OF INCOME TAX, OME TAX, OME TAX, OME TAX, CIRCLE CIRCLE CIRCLE CIRCLE- -- -14(1), NEW DELHI. 14(1), NEW DELHI. 14(1), NEW DELHI. 14(1), NEW DELHI. 2. RESPONDENT : M/S PROMED EXPORTS PVT.LTD., M/S PROMED EXPORTS PVT.LTD., M/S PROMED EXPORTS PVT.LTD., M/S PROMED EXPORTS PVT.LTD., 208, ASHIRWAD COMPLEX, 208, ASHIRWAD COMPLEX, 208, ASHIRWAD COMPLEX, 208, ASHIRWAD COMPLEX, D DD D- -- -1, GREEN PARK, NEW DELHI 1, GREEN PARK, NEW DELHI 1, GREEN PARK, NEW DELHI 1, GREEN PARK, NEW DELHI 110 016. 110 016. 110 016. 110 016. 3. CIT 4. CIT(A) 5. DR, ITAT ASSISTANT REGISTRAR