PLATINUM INVESTMENT MANAGEMENT LTD, MUMBAI V. CIT -55, MUMBAI

ITA 4770/MUM/2015

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 0536 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 11 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 02-08-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Assessment Year: 2007-2008
• Appeal Filed On: 21-08-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: M V RAJGURU
• Keywords: Rectification of order; Double taxation relief
• Section: 244A; 154

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL L BENCH, MUMBAI BEFORE SHRI B.R. BASKARAN (AM) & SHRI RAVISH SOOD (JM) I.T.A. NO. 4770 /MUM/20 15 (ASSESSMENT YEAR 20 07 - 08 ) PLATINUM INVESTMENT MANAGEMENT LTD. A/C PLATINUM INTERNATIONAL FUND C/O. DELOITTE HASKINS & SELLS INDIABULLS FINANCE CENTRE TOWER 3, 28 TH FLOOR ELPHINSTONE MILL COMPOUND SENAPATI BAPAT MARG ELPHINSTONE WEST MUMBAI - 400 013. VS. DEPUTY DIRECTOR OF INCOME TAX (INTERNATIONAL TAXATION) - RANGE 4(2), 1 ST FLOOR SCINDHIA HOUSE BALLARD ESTATE MUMBAI - 4 00 038. ( APPELLANT ) ( RESPONDENT ) PAN NO . AABTP2973J ASSESSEE BY SHRI MADHUR AGARWAL DEPARTMENT BY S HRI M.V. RAJGURU DATE OF HEARING 2 . 8 . 201 7 DATE OF PRONOUNCEMENT 2 . 8 . 201 7 O R D E R PER B.R. BASKARAN (AM) : - THE APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER DATED 19.3.2015 PASSED BY THE LEARNED CIT(A) - 55, MUMBAI AND IT RELATES TO A.Y. 2007 - 08. THE ASSESSEE IS AGGRIEVED BY THE DECISION OF THE LEARNED CIT(A) IN UPHOLDING THE REVISION ORDER PASSED BY THE ASSESSING OFFICER U/S. 154 OF THE ACT, WHEREIN THE ASSESSING OFFICER HAS HELD THAT INTEREST GRANTED TO THE ASSESSEE U/S. 244A OF THE ACT IS LIABLE TO BE TAXED UNDER ARTICLE 22 OF INDO - AUSTRALIA DTAA AND ACCORDINGLY RAISED DEMAND UPON THE ASSESSEE . 2. WE HAVE HEARD THE PART IES AND PERUSED THE RECORD. THE ASSESSEE IS NON - RESIDENT CORPORATE ENTITY REGISTERED WITH SEBI AS A FII. IT IS RESIDENT OF AUSTRALIA. IT FILED ITS RETURN OF INCOME FOR THE YEAR UNDER CONSIDERATION AND PLATINUM INVESTMENT MANAGEMENT LTD. 2 CONSEQUENT TO THE PASSING OF ORDER TO GIVE EFFECT TO TH E ORDER PASSED BY THE LEARNED CIT(A), THE ASSESSEE GOT REFUND OF ` 8.71, WHICH CONSIST ED OF INTEREST U/S. 244A OF THE ACT OF ` 90,44,282/ - . THE SAID INTEREST WAS SUBJECTED TO TDS AS PER ARTICLE 11 OF DTAA WITH THE VIEW THAT THE INTEREST ON INCOME TAX REFUN D IS LIABLE TO BE TAXED AT THE RATE PRESCRIBED IN ARTICLE 11 OF DTAA @ 15% . T HE ASSESSING OFFICER TOOK THE VIEW THAT INTEREST GRANTED BY THE INCOME TAX DEPARTMENT IS TAXABLE UNDER ARTICLE 22 OF DTAA AND HENCE TAX SHOULD HAVE BEEN DEDUCTED AT HIGHER RATE O F 41.82% AS AGAINST LOWER RATE DEDUCTED AS PER PROVISIONS OF ARTICLE 11 OF DTAA. ACCORDINGLY, HE PASSED A RECTIFICATION ORDER U/S. 154 OF THE ACT AND RAISED A DEMAND OF ` 24,25,676/ - . THE LEARNED CIT(A) ALSO CONFIRMED THE SAME AND HENCE THE ASSESSEE HAS FI LED THIS APPEAL BEFORE US. 3. AT THE TIME OF HEARING LEARNED AR PLACED RELIANCE ON THE DECISION RENDERED BY THE COORDINATE BENCH OF THE ITAT IN THE CASE OF DDIT (INTERNATIONAL TAXATION) VS. PRINCIPAL LIFE - INTERNATIONAL EMERGING MARKETS SEPARATE ACCOUNT (2 015) 53 TAXAMNN.COM 101 (MUM), WHEREIN THE TRIBUNAL HAS TAKEN A VIEW THAT THE QUESTION AS TO WHETHER INTEREST WAS TAXABLE UNDER ARTICLE 11 OR ARTICLE 23 OF DTAA WAS DEBATABLE ONE AND HENCE THE SAME CANNOT BE SUBJECTED TO RECTIFICATION U/S. 154 OF THE ACT. THE COORDINATE BENCH ALSO NOTED THAT THE ITAT (SPECIAL BENCH) DELHI HAS HELD IN THE CASE OF ACIT VS. CLOUGH ENGINEERING LTD. (2011) 130 ITD 137 THAT INTEREST ON INCOME TAX REFUND IS TAXABLE UNDER PARA 2 OF ARTICLE 11 OF THE DTAA. 4. WE HAVE HEARD LEARNED DEPARTMENTAL REPRESENTATIVE AND PERUSED THE RECORD. W E NOTICED THAT THE SPECIAL BENCH HAS HELD IN THE CASE OF CLOUGH ENGINEERING LTD. (SUPRA) THAT INTEREST ON INCOME TAX REFUND IS TAXABLE UNDER ARTICLE 11 OF THE DTAA. THE REVENUE HA S ORIGINALLY DEDUCTED T DS ON THE INTEREST GRANTED U/S. 244A OF THE ACT AT THE RATE PRESCRIBED UNDER ARTICLE 11 OF DTAA , WHICH IS CORRECT AS PER THE DECISION RENDERED BY THE SPECIAL BENCH . FURTHER THE COORDINATE BENCH HAS HELD IN THE CASE OF PRINCIPAL LIFE - INTERNATIONAL EMERGING MARKETS SEPARATE ACCOUNT (SUPRA) THAT QUESTION AS TO PLATINUM INVESTMENT MANAGEMENT LTD. 3 WHETHER INTEREST ON INCOME TAX REFUND IS LIABLE TO TAX UNDER ARTICLE 11 OR ARTICLE 23 OF DTAA WAS A DEBATABLE ONE. THE FACTS OF THE SAID DECISION SHALL SQUARELY APPLY TO THE FACTS OF THE PRESENT CASE A LSO. HENCE THERE IS MERIT IN THE CONTENTIONS OF THE ASSESSEE BOTH ON MERITS AND ON LEGAL POINT. 5. IN VIEW OF THE ABOVE, WE HOLD THAT RECTIFICATION ORDER PASSED BY THE ASSESSING OFFICER IS BEYOND THE SCOPE OF PROVISIONS OF SECTION 154. ACCORDINGLY, W E ARE OF THE VIEW THAT THE LEARNED CIT(A) WAS NOT JUSTIFIED IN CONFIRMING THE ORDER PASSED BY THE ASSESSING OFFICER U/S. 154 OF THE ACT. ACCORDINGLY, WE QUASH THE ORDERS PASSED BY THE TAX AUTHORITIES ON THIS ISSUE . 6 . IN THE RESULT, APPEAL FILED BY THE AS SESSEE IS ALLOWED. ORDER HAS BE EN PRONOUNCED IN THE COURT ON 2 . 8 .201 7. SD/ - SD/ - (RAVISH SOOD ) (B.R.BASKARAN) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI ; DATED : 2 / 8 / 20 1 7 COPY OF THE ORDER FORWARDED TO : 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT(A) 4. CIT 5. DR, ITAT, MUMBAI 6. GUARD FILE. BY ORDER, //TRUE COPY// ( DY./ASSTT. REGISTRAR) PS ITAT, MUMBAI