DCIT-8(3)(2), MUMBAI V. ZOOMIN ONLINE INDIA PVT. LTD., MUMBAI

ITA 52/MUM/2019

• Counselvise Citation: [2020] 111 COUNSELVISE.COM (IT) 4423 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 1 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-02-2020
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: G
• Assessment Year: 2014-2015
• Appeal Filed On: 03-01-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: CULLA E MUMBAI PAN AACCDB
• Keywords: Double taxation relief; Additional evidence; Tax effect
• Section: 195; 12

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH G , MUMBAI BEFORE SHRI C.N. PRASAD , HONBLE JUDICIAL MEMBER AND SHRI N.K. PRADHAN , HONBLE ACCOUNTANT MEMBER ITA NO S . 50, 51 & 52 /MUM/2019 ( A.Y S : 20 12 - 13, 2013 - 14 & 2014 - 15 ) DY. COMMISSIONER OF INCOME - TAX CENTRAL C IRCLE - 8 (3) (2) AAYAKAR BHAVAN, ROOM NO. 615 M.K. ROAD, NEW MARINE LINES MUMBAI 400 020 V. M /S. ZOOMIN ONL I NE INDIA P VT. LTD., JETHA COMPOUND , OPP. NIRMAL PARK DR. B. AMBEDKAR ROAD BYCULLA (E), MUMBAI 400 027 PAN: AACCD4964B (APPELLANT) (RESPONDENT) ASSESSEE BY : NONE DEPARTMENT BY : SHRI UDAY BHASKAR JAKKA DATE OF HEARING : 29 .01.2020 DATE OF PRONOUNCEMENT : 19 .0 2 .2020 O R D E R PER C.N. PRASAD (JM) THESE THREE APPEALS ARE FILED BY THE REVENUE AGAINST DIFFERENT ORDERS OF THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) - 1 4 , MUMBAI [HEREINAFTER IN SHORT LD.CIT(A)] IN APPEAL NO S . CIT(A) - 14 /IT - 1 0185 / 17 - 18 , CIT(A) - 1 4/IT - 179B/16 - 17 AND CIT(A) - 14/IT - 213B/16 - 17 DATED 20 .08.2018 FOR THE A .YS. 2012 - 13, 2013 - 14 & 2014 - 15 RESPECTIVELY. 2 ITA NOS. 50, 51 & 52/MUM/2019 (A.YS: 2012 - 13, 2013 - 14 & 2014 - 15) M/S. ZOOMIN ONLINE INDIA PVT. LTD., 2. REVENUE HAS RAISED THE FOLLOWING COMMON GROUND S IN ITS APPEAL S EXCEPT FOR FIGURES - 1. ON THE FACTS OF THE CASE AND CIRCUMSTANCES AND IN LAW, THE CIT(A) ERRED IN DIRECTING THE AO TO DELETE THE DISALLOWANCE U/S. 40(A)(I) OF RS. 88,11,937/ - HOLDING THAT THE SERVER CHARGES AND WEB HOSTING CHARGES PAID BY THE ASSESSEE TO AMAZON WEB SERVICES AND SOFTLAYER TECHNOLOGIES WERE NOT IN THE NATURE OF INTEREST OR ROYALTIES OR FEE FOR TECHNICAL SERVICES OR OTHER SUM CHARGEABLE TO TAX IN INDIA AND THE ASSESSEE WAS NOT REQUIRED TO DEDUCT TAX AT SOURCE U/S. 195 WHILE MAKING PAYMENTS OUTSIDE INDIA. 2. ON THE FACTS OF THE CASE AND CIRCUMSTANCES AND IN LAW, THE CIT(A) ERRED IN DIRECTING THE AO TO DELETE THE DISALLOWANCE U/S. 40(A)(I) OF RS.70,12,134 / - WITHOUT APPRECIATING THAT THE PAYMENT BY THE ASSESSEE TO FOREIGN COMPANIES ON ACCOUNT OF 'ONLINE ADVERTISING' FALLS WITHIN THE MEANING OF ROYALTY AS PER PROVISIONS OF SECTION 9(1 )(VI) OF THE ACT AS WELL AS PROVISIONS OF THE DTAA BETWEEN INDIA AND IRELAN D AND USA AS HELD BY THE BANGALORE TRIBUNAL IN THE CASE OF GOOGLE INDIA (P.) LTD., [2018] 93 TAXMANN.COM 183 (BANGALORE - TRIB.). 3. ON THE FACTS OF THE CASE AND CIRCUMSTANCES AND IN LAW, THE CIT(A) ERRED IN DIRECTING THE AO TO DELETE THE DISALLOWANCE ON THE BASIS OF ADDITIONAL EVIDENCE FILED BEFORE CIT(A) WITHOUT CALLING THE REMAND REPORT FROM THE ASSESSING OFFICER . 3. AT THE TIME OF HEARING, LD. DR FAIRLY SUBMITTED THAT TAX EFFECT ON THE ISSUE IN THE PRESENT APPEAL S IS BELOW .50 LACS AND IN VIEW OF THE CB DT CIRCULAR NO. 17/2019 DATED 08.08.2019 IN F.NO.279/MISC.142/2007 - ITJ (PT), THE APPEAL S OF THE REVENUE ARE NOT MAINTAINABLE. 4. WE HAVE HEARD THE SUBMISSIONS OF LD. DR AND PERUS ED THE GROUNDS OF APPEAL IN THESE APPEAL S . WE FIND THAT THE TAX EFFECT IN ALL TH ESE APPEAL S IS LESS THAN .50 LAKHS AND THEREFORE THE APPEAL S OF THE REVENUE ARE NOT 3 ITA NOS. 50, 51 & 52/MUM/2019 (A.YS: 2012 - 13, 2013 - 14 & 2014 - 15) M/S. ZOOMIN ONLINE INDIA PVT. LTD., MAINTAINABLE ON ACCOUNT OF LOW TAX EFFECT IN VIEW OF THE CBDT CIRCULAR NO.17/20 19 DATED 08.08.2019. 5. IN THE RESULT, APPEAL S OF THE REVENUE ARE DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON THE 19 TH FEBRUARY , 2020 SD/ - SD/ - ( N.K. PRADHAN ) (C.N. PRASAD) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI / DATED 19 / 0 2 / 2020 GIRIDHAR, SR.PS COPY OF THE ORDER FORWARDED TO : 1. THE APPELLANT 2. THE RESPONDENT. 3. THE CIT(A), MUMBAI. 4. CIT 5. DR, ITAT, MUMBAI 6. GUARD FILE. //TRUE COPY// BY ORDER, (ASSTT. REGISTRAR) ITAT, MUM