DCIT 13(1)(2), MUMBAI V. PINSTROM TECHNOLOGIES P.LTD, MUMBAI

ITA 4937/MUM/2016

• Counselvise Citation: [2018] 126 COUNSELVISE.COM (IT) 0275 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 6 month(s) 12 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 14-02-2018
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: Not Allotted
• Assessment Year: 2012-2013
• Appeal Filed On: 01-08-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Revised return
• Section: 142(1)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH, MUMBAI BEFORE SHRI RAJENDRA , AM AND SHRI AMARJIT SINGH , JM I.T.A. NO . 4937 M/201 6 ASSESSMENT YEAR : 201 2 - 13 DCIT, CIRCLE - 13(1)(2),MUMBAI 2 ND FLOOR, ROOM NO. 218, AAYAKAR BHAVAN, M.K. ROAD, MUMBAI - 400020 VS. M/S. PINSTROM TECHNOLOGIES P. LTD. GROUND FLOOR, SWATI BUILDING, NORTH AVENUE, SANTACRUZ WEST, MUMBAI - 400054 ./ ./ PAN/GIR NO. : AADCP 4854 B ( APPELLANT ) .. ( RESPONDENT ) DATE OF HEARING : 05.02 .201 8 DATE OF PRONOUNCEMENT : 14. 02 .2018 O R D E R PER AMARJIT SINGH, JM: THE REVENUE HAS FILED THE PRESENT APPEA L AGAINST THE ORDER DATED 16.05 . 2016 PASSED BY THE COMMIS S IONER OF INCOME TAX (APPEALS) - 21 , MUMBAI [HEREINAFTER REFERRED TO AS THE CIT(A)] RELEVANT TO THE ASSESSMENT YEAR 201 2 - 1 3 . 2 . THE REVENUE HAS RAISED THE FOLLOWING GROUNDS: - 'WHETHER, ON THE FACTS AND IN CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A) WAS JUSTIFIED IN DELETING THE DISALLOWANCE U/S. 40 (A)(IA) HOLDING THAT THE AMOUNT PAID BY THE ASSESSES TO GOOGLE IRELAND LTD. FOR UPLOADING AND DISPLAY OF BANNER ADVERTISEMENT WAS NOT IN THE NATURE OF RENDERING OF ROYALTY BUT WAS FOR RENDERING ASSESSEE BY: SHRI HARIDAS BHAT (AR) DEPARTMENT BY: SHRI T.A. KHAN (DR) ITA. NO.4937 /M/2016 A.Y. 2012 - 1 3 2 OF BUSINESS PROFIT OF M/S GOOGLE IRELAND LTD. AND IN THE ABSENCE OF ANY PE OF M/S GOOGLE IRELAND LTD. IN INDIA, THE SAME IS NOT CHARGEABLE TO TAX IN INDIA'. 'WHETHER, O N THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A] IS JUSTIFIED IN DELETING THE DISALLOWANCE AND PASSING THE JUDGMENT ON THE BASIS OF HON'BLE ITAT DECISION IN CASE OF M/S. YAHOO INDIA PVT. LTD. IN ITA NO. 506/MUM/2008. 3} THE APPELLANT PRAYS THAT THE ORDER OF THE CIT (A) ON THE ABOVE GROUND BE SET ASIDE AND THAT OF THE ASSESSING OFFICER BE RESTORED. 4) THE APPELLANT CRAVES LEAVE TO AMEND OR ALTER ANY GROUNDS OR ADD A NEW GROUND WHICH MAY BE NECESSARY. 3 . THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE FILED ITS RETURN OF INCOME ON 30 . 09 .201 2 DECLARING TOTAL INCOME TO THE TUNE OF RS. 17,41,270 / - . THEREAFTER THE ASSESSEE FILED THE REVISED RETURN ON 26.09.2013 DECLARING TOTAL LOSS TO THE TUNE OF RS.36,65,116/ - . THE REVISED RETURN WAS FILED ON ACCOUNT OF FINANCIAL DIFFICULTIES AND LACK OF PROPER STAFF AND THE AUDIT CANNOT BE COMPLETED WELL IN TIME. T HE RETURN WAS PROCESSED U/S 143(1) OF THE I.T. ACT, 1961. THEREAFTER, THE CASE WAS SELECTED FOR SCRUTINY AND NOTICE U/S 143(2) OF THE ACT DATED 10.09.2013 WAS ISSUED AND SERVED UPON THE ASSESSEE. NOTICE U/S 142(1) OF THE ACT DATED 24.07.2014 WAS ISSUED AND SERVED UPON THE ASSESSEE. THE ASSESSEE IS ENGAGED IN THE BUSINESS OF SEARCH ENGINES, MARKETING THROUGH INTERNET CONSISTING OF GENERATING CLICKS, LINKS, VISITS THROUGH INTERNET WITH CLIENTS. ON VERIFICATION , IT WAS FOUND THAT THE ASSESSEE DID NOT DEDUCT TH E TDS ON AN AMOUNT OF RS. 1,01,02,632/ - ON THE PAYMENT MADE TO THE FOREIGN VENDORS. NOTICE WAS GIVEN AND AFTER THE REPLY , AN AMOUNT OF RS.1,01,02,632/ - WAS DISALLOWED AND ADDED TO THE INCOME OF THE ASSESSEE. AIR MISMATCH TO THE TUNE OF RS.1,03,285/ - ITA. NO.4937 /M/2016 A.Y. 2012 - 1 3 3 WAS FOU ND WHICH WAS NOT EXPLAINED, THEREFORE, THE SAID AMOUNT WAS ALSO ADDED TO THE INCOME OF THE ASSESSEE. THE TOTAL INCOME OF THE ASSESSEE WAS ASSESSED TO THE TUNE OF RS.65,40,800/ - . FEELING AGGRIEVED, THE ASSESSEE FILED AN APPEAL BEFORE THE CIT(A) WHO ALLOWED T HE CLAIM OF THE ASSESSEE, THEREFORE, THE REVENUE HAS FILED THE PRESENT APPEAL BEFORE US. ISSUE NO S .1 TO 2 : - 4 . UNDER THESE ISSUES THE REVENUE HAS CHALLENGED THE DELETION OF THE DISALLOWANCE U/S 40(A)(IA) OF THE I.T. ACT, 1961 OF AN AMOUNT OF RS.1,01,02,632/ - . THE CONTENTION OF THE ASSESSEE IS THAT THE PAYMENT TO M/S. GOOGLE IRELAND LTD. FOR UPLOADING AND DISPLAY OF BANNER ADVERTISEMENT WAS NOT IN THE NATURE OF RENDERING OF ROYALTY BUT THE SAME WAS FOR RENDERING THE BUSINESS PR OFIT OF M/S. GOOGLE IRELAND LTD. AND IN THE ABSENCE OF ANY PE OF M/S. GOOGLE IRELAND LTD. IN INDIA , THE SAME IS NOT CHARGEABLE TO TAX IN INDIA. THE REVENUE IS OF THE VIEW THAT THE SAID PAYMENT WAS IN THE NATURE OF ROYALTY, THEREFORE, THE TDS WAS LIABLE TO BE DEDUCT ED IN ACCORDANCE WITH LAW. ON APPRAISAL OF THE ORDER OF THE CIT(A) , IT CAME INTO NOTICED THAT THE ISSUE HAS ALREADY BEEN DECIDED IN FAVOUR OF THE ASSESSEE BY THE ITAT IN THE ASSESSEES OWN CASE FOR THE A.Y. 2006 - 07 IN ITA. NO. 4332/M/2009 DATED 18.07.2012 . T HE SAID DECISION WAS FOLLOWED IN THE APPELLANTS OWN CASE IN THE SUBSEQUENT ASSESSMENT YEAR ALSO. THE HONBLE ITAT HAS ALSO DECIDED THESE ISSUES IN FAVOUR OF THE ASSESSEE IN THE ASSESSEES ITA. NO.4937 /M/2016 A.Y. 2012 - 1 3 4 OWN CASE FOR THE A.Y. 2008 - 09 IN ITA. NO.2895/M/2012 D ATED 23.01.2013. THE CIT(A) HAS ALSO DECIDED THESE ISSUE IN FAVOUR OF THE ASSESSEE ON THE BASIS OF THE DECISION OF ITAT. SINCE THESE ISSUES HAS ALREADY BEEN DECIDED IN FAVOUR OF THE ASSESSEE BY THE ITAT AND THE CI T(A) HAS ALSO FOLLOWED THE SAME, T HEREFORE, IN THE SAID CIRCUMSTANCES, WE NOWHERE FOUND ANY ILLEGALITY AND IRREGULARITY IN THE ORDER PASSED BY THE CIT(A) IN QUESTION. THEREFORE, WE CONFIRMED THE FINDING OF THE CIT(A) ON THESE ISSUES AND DECIDED THESE ISSUES IN FAVOUR OF THE ASSESSEE AGAINST THE REV ENUE. 5 . IN THE RESULT THE APPEAL FILED BY THE REVENUE IS HEREBY ORDERED TO BE D ISMISSED . ORDER P RONOUNCED IN THE OPEN COURT ON 14. 02 .2 018 SD/ - SD/ - ( RAJENDRA ) (AMARJIT SINGH) / ACCOUNTANT MEMBER / JUDICIAL MEMBER MUMBAI; DATED : 14. 0 2 . 2018 VIJAY ITA. NO.4937 /M/2016 A.Y. 2012 - 1 3 5 / 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) , / ITAT, MUMBAI