Mahindra & Mahindra Ltd., V. DDIT(IT) 1(2),

ITA 5075/MUM/2004

• Counselvise Citation: [2011] 119 COUNSELVISE.COM (IT) 6779 (ITAT-MUMBAI)
• Duration Of Justice: 6 year(s) 11 month(s) 9 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-05-2011
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: L
• Next Hearing Date: 30-05-2011
• Assessment Year: misc
• Appeal Filed On: 21-06-2004
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: SRHI JITENDRA YADAV
• Assessee Lawyers: H MAHAJANI

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH L : MUMBAI BEFORE SHRI N.V. VASUDEVAN,(JM) AND SHRI RAJENDRA SINGH ,(AM) ITA NO.5075/MUM/2004 ASSESSMENT YEAR : NOT APPLICABLE MAHINDRA & MAHINDRA LIMITED MAHINDRA TOWERS, GROUND FLOOR CORPORATE TAXATION WORLI ROAD NO.13, WORLI MUMBAI-400 018. ..( APPELLANT ) P.A. NO. (AAACM 3025 E) VS. DY. DIRECTOR OF INCOME-TAX (INTL. TAXATION) 1(2) MUMBAI AAYAKAR BHAVAN M.K. MARG MUMBAI-400 020. ..( RESPONDENT ) APPELLANT BY : SHRI H.. MAHAJANI RESPONDENT BY : SHRI J ITENDRA YADAV O R D E R PER RAJENDRA SINGH (AM). THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER DATED 3.3.2004 OF CIT(A). THE ONLY DISPUTE RAISED IS REG ARDING APPLICABILITY OF PROVISIONS OF SEC. 195 REGARDING DEDUCTION OF TAX A T SOURCE FROM THE PAYMENT MADE BY THE ASSESSEE TO M/S. TONG YONG MOOSLAN CO. LTD. 2. BRIEFLY STATED FACTS OF THE CASE ARE THAT THE A SSESSEE HAD AN AGREEMENT DATED 23.6.2000 WITH M/S. TONG YANG MOOSL AN CO. LTD. (TYM). IN TERMS OF THE SAID AGREEMENT, TYM WAS RESPONSIBLE FO R DEVELOPING A DESIGN OF TRANSAXLE HYDRAULICS AND FRONT AXLE FOR A NEW RANGE OF TRACTORS. THE DESIGN AND MODEL TO BE DEVELOPED WERE NOT UPGRADATION OF E XISTING MODEL BUT FOR DEVELOPMENT OF NEW MODEL FOR WHICH TYM WAS TO PROVIDE COMPLETE SUPPORT FOR ENGINEERING AND MANUFACTURING PROCESS, FEASIBIL ITY AND DETAILED TECHNICAL SPECIFICATION WITH REGARD TO THE DESIGN. THE DESIG N DEVELOPED BY TYM UNDER ITA NO.5075/M/04 A.Y:N.A. 2 THE AGREEMENT WAS TO BE THE SOLE AND EXCLUSIVE PROP ERTY OF THE ASSESSEE WHO WAS TO HOLD WORLD WIDE RIGHTS TO USE/SALE OF THE AB OVE DESIGN. THE PAYMENTS WERE REQUIRED TO BE MADE IN INSTALLMENTS AND EACH I NSTALLMENT BECAME DUE ONLY AFTER SUPPLY OF FINAL DESIGN. THE ASSESSEE DU RING THE PAID A SUM OF US$ 60,000 TO TYM VIDE INVOICE DATED 1.1.2003 BEING THE SIXTH INSTALLMENT. THE CASE OF THE ASSESSEE IS THAT THE PAYMENT WAS MADE F OR OUTRIGHT PURCHASE OF DRAWING AND DESIGN AND NOT FOR ANY TECHNICAL SERVIC ES AND THEREFORE, NO TAX WAS REQUIRED TO BE DEDUCTED. THE ASSESSEE MADE AN APPLICATION TO THE CHARTERED ACCOUNTANT (CA) M/S. B.K. KHARE & CO. FOR ISSUING NO OBJECTION CERTIFICATE IN THE MATTER OF DEDUCTION OF TAX AT SO URCE. M/S. B.K. KHARE & CO. HOWEVER IN THE CERTIFICATE DATED 23.8.2003 OPINED T HAT THE ISSUE WAS DEBATABLE. THE ASSESSEE WAS NOT SATISFIED WITH THE OPINION GIVEN BY THE CA AND FILED APPEAL BEFORE THE CIT(A). THE CIT(A) AFT ER NECESSARY EXAMINATION OBSERVED THAT THE SAME ISSUE ARISING OUT OF THE PAY MENT MADE UNDER SAME AGREEMENT DATED 26.6.2000 HAD ALREADY BEEN DECIDED AGAINST THE ASSESSEE IN THE APPEAL NO.CIT(A)XXXI/ADIT(IT)(2)/97, 99 & 29 6/02-03. FOLLOWING THE SAID DECISION CIT(A) DISMISSED THE APPEAL OF THE AS SESSEE, AGGRIEVED BY WHICH THE PRESENT APPEAL HAS BEEN FILED BEFORE THE TRIBUNAL. 3. AFTER HEARING BOTH THE PARTIES, WE FIND THAT THE SAME ISSUE ARISING OUT OF APPEAL FILED AGAINST THE CERTIFICATE ISSUED BY C A HAS ALREADY BEEN CONSIDERED BY THE TRIBUNAL IN ASSESSEES OWN CASE V IDE ORDER DATED 28.7.2006 IN ITA NO.2733-39/M/03. THE TRIBUNAL IN THE SAID CASE NOTED THAT THE SYSTEM OF NO OBJECTION CERTIFICATE BEING ISSUED BY ASSESSING OFFICER UNDER THE ACT WAS SIMPLIFIED BY CBDT IN 1997 VIDE CIR. NO .759 DATED 18.11.1997 AS PER WHICH IT WAS NO LONGER NECESSARY FOR THE ASSESS EE TO OBTAIN NO OBJECTION CERTIFICATE FROM THE ASSESSING OFFICER AND INSTEAD THE ASSESSEE COULD OBTAIN CERTIFICATE FROM ANY INDEPENDENT CA. HOWEVER, THE T RIBUNAL FURTHER OBSERVED THAT THE CERTIFICATE FROM THE CA WAS NOT IN SUBSTIT UTION OF THE CERTIFICATE ISSUED BY THE ASSESSING OFFICER U/S.195(2) AS CBDT IN THE CIR.767 DATED 22.5.1998 HAD CLARIFIED THAT THE NEW PROCEDURE OF F ILING AN UNDERTAKING ALONG WITH CERTIFICATE PRESCRIBED IN CIRCULAR NO.759 WOUL D BE APPLICABLE ONLY IF ORDER ITA NO.5075/M/04 A.Y:N.A. 3 U/S.195(2) HAD NOT BEEN OBTAINED BY THE RESPONSIBLE PERSON. THE TRIBUNAL AFTER NECESSARY EXAMINATION OF THE PROVISIONS HELD THAT THE APPEAL FILED AGAINST THE CERTIFICATE ISSUED BY CA WITHOUT THERE BEING ANY ORDER OF THE ASSESSING OFFICER WAS NOT MAINTAINABLE. THE TRIBUN AL DISTINGUISHED THE EARLIER DECISION OF THE TRIBUNAL IN CASE OF HINDUST AN CONSTRUCTION CO. LTD. VS. ACIT 5595/BOM/95 IN WHICH IT WAS HELD THAT A FORMAL ORDER OF THE ASSESSING OFFICER WAS NOT REQUIRED TO PRESENT AN APPEAL U/S.2 48/249 OF THE INCOME TAX ACT. THE TRIBUNAL OBSERVED THAT IN THAT CASE THE A SSESSING OFFICER HAD TAKEN THE STAND THAT THE ASSESSEE WAS LIABLE TO DEDUCT TA X AT SOURCE AND DID NOT TAKE ANY ACTION ON THE REPRESENTATION MADE BY THE A SSESSEE. THOUGH THE ASSESSING OFFICER HAD NOT PASSED A FORMAL ORDER IN THAT CASE BUT HE HAD MADE HIS STAND CLEAR THAT TAX WAS REQUIRED TO BE DE DUCTED. IT WAS UNDER THESE CIRCUMSTANCES THAT THE CO-ORDINATE BENCH HELD THAT THE APPEAL COULD BE FILED WITHOUT ANY FORMAL ORDER OF THE ASSESSING OFF ICER. IN THE PRESENT CASE THE STAND OF THE ASSESSING OFFICER WAS NOT KNOWN AN D ASSESSEE HAD DIRECTLY FILED APPLICATION AGAINST CERTIFICATE ISSUED BY CA WHICH IN THE OPINION OF THE TRIBUNAL WAS NOT MAINTAINABLE. THE TRIBUNAL ACCORD INGLY DISMISSED THE APPEAL FILED AS NOT MAINTAINABLE. THE FACTS IN THE PRESENT CASE ARE IDENTICAL. IN THIS CASE ALSO, THE ASSESSEE FILED AN APPEAL DIR ECTLY AGAINST THE CERTIFICATE ISSUED BY THE CA WITHOUT EVEN APPROACHING THE ASSES SING OFFICER FOR PASSING A FORMAL ORDER. WE, THEREFORE, RESPECTFULLY FOLLOW ING THE DECISION OF THE TRIBUNAL IN ASSESSEES OWN CASE IN ITA NO.2733 TO 3 9/M/03 DISMISS THE APPEAL OF THE ASSESSEE AS NOT MAINTAINABLE. 4. IN THE RESULT THE APPEAL OF THE ASSESSEE STANDS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 30.5.2011. SD/- SD/- (N.V. VSUDEVAN) (RAJENDRA SINGH ) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI, DATED: 30.5.2011. JV. ITA NO.5075/M/04 A.Y:N.A. 4 COPY TO: THE APPELLANT THE RESPONDENT THE CIT, CONCERNED, MUMBAI THE CIT(A) CONCERNED, MUMBAI THE DR BENCH TRUE COPY BY ORDER DY/ASSTT. REGISTRAR, ITAT, MUMBAI.