INCOME TAX OFFICER (IT)TDS-3(2)(2), MUMBAI V. OMYA INDIA PRIVATE LIMITED, MUMBAI

ITA 5717/MUM/2017

• Counselvise Citation: [2019] 112 COUNSELVISE.COM (IT) 1649 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 3 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 10-12-2019
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: C
• Assessment Year: misc
• Appeal Filed On: 07-09-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: K K VED
• Assessee Lawyers: V SREEKAR
• Keywords: TDS
• Section: 200A; 154

Judgement Text

ITA NO . 5717 /MUM/2017 ASSESSMENT YEAR: 2014 - 15 PAGE 1 OF 3 IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAII BENCH, MUMBAI [CORAM: PRAMOD KUMAR (VICE PRESIDENT) AND PAWAN SINGH (JUDICIAL MEMBER) ITA NO. 5717/MUM/2017 ASSESSMENT YEAR: 2014 - 15 INCOME TAX OFFICER (IT) TDS - 3(2) ( 2 ) RESPONDENT MUMBAI VS M/S. OMYA INDIA PVT. LTD., APPELLANT PLOT NO. 18, MIDC, INDUSTRIAL AREA, TALOJA, NAVI MUMBAI, RAIGAD 410208 [PAN: AAACO7164N] APPEARANCES BY V. SREEKAR FOR THE RESPONDENT K.K VED FOR THE APPELLANT DATE OF CONCLUDING THE HEARING: SEPTEMBER 11 TH , 2019 DATE OF PRONOUNCEMENT : DECEMBER 10 TH , 2019 ORDER PER PRAMOD KUMAR, VP: 1. BY WAY OF THIS APPEA L , THE ASSESSING OFFICER APPELLANT HAS CHALLENGED CORRECTNESS OF THE ORDER DATED 27 TH JUNE 2017, PASSED BY THE CIT(A)IN THE MATTER OF RECTIFICATION UNDER SECTION 154 R.W.S 200A OF THE INCOME TAX ACT 1961, FOR THE ASSESSMENT YEAR 2014 - 15 (SECOND QUARTER). 2. IN GROUND NO. 1 THE ASSESSING OFFICER HAS RAISED THE FOLLOWING GRIEVANCE: - ITA NO . 5717 /MUM/2017 ASSESSMENT YEAR: 2014 - 15 PAGE 2 OF 3 1. WHETHER IN THE FACT AND CIRCUMSTANCES OF THE CASE AND IN LAW THE LD. CIT(A) IS CORRECT IN GIVING RELIEF TO THE ASSESSEE WITHOUT VERIFYING WHETHER THE RECIPIENT OF THE FEE FOR TECHNICAL SERVICES WAS BENEFICIAL OWNER AS REQUIRED UNDER THE DOUBLE TAXATION AVOIDANCE AGREEMENT (DATT). 3. BRIEFLY STATED THE RELEVANT MATERIAL FACTS ARE LIKE THIS IN THE COURSE OF PROCESSING UNDER SECTION 200A. THE ASSESSEE WAS HELD TO BE AN ASSESSEE IN THE FAULT FOR SHORT DEDUCTION TAX AT SOURCE FROM PAYMENT MADE TO VARIOUS NON - RESIDENT ENTITIES ACCOUNT OF FE ES FOR TECHNICAL SERVICES. WHILE AS PER THE STAND TAKEN IN THE SAID PROCESSING THE ASSESSEE WAS LIABLE TO DEDUCT TAX AT SOURCE AT THE RATE OF 25.75%, THE STAND OF THE ASSESSEE WAS THAT IN TERMS OF INDIA SOUTH KOREA DOUBLE TAXATION AGREEMENT AND INDIA SWITZ ERLAND DOUBLE TAXATION AVOIDANCE AGREEMENT THE CORRECT RATE OF TAX DEDUCTION AT SOURCE WAS 15% AND 1 0% RESPECTIVELY . THIS PLEA WAS EVENTUALLY UPHELD BY THE CIT(A)AND THE RESULTANT SHORT DEDUCTION OF TAX AT SOURCE DEMAND WAS QUASHED. THE ASSESSING O FFICER I S NOW AGREED OF THE RELIEF SO GRANTED BY THE CIT(A) BUT ON A ALL TOGETHER DIFFERENT GROUND, I.E. BENEFICIAL OWNERSHIP OF THE FEES FOR TECHNICAL SERVICES, WHICH WAS NOT BEFORE ANY OF THE AUTHORITIES BELOW. 4. WE HAVE HEARD THE RIVAL CONTENTIONS, PERUSED TH E MATERIAL ON RECORD AND DULY CONSIDERED FACTS OF THE CASE IN THE LIGHT OF APPLICABLY LEGAL POSITION. 5. WE FIND THAT IT WAS , AT NO STAGE , CASE OF THE ASSESSING O FFICER THAT THE RECIPIENT OF THE FEES FOR TECHNICAL SERVICES WAS NOT THE BENEFICIAL OWNER OF THE SAID FEES FOR TECHNICAL SERVICES. IN ANY CASE THE DEMAND IMPUGNED BEFORE US IS A DEMAND RAISED UNDER SECTION 154 R.W.S 200A WHICH CANNOT , BY ITA NO . 5717 /MUM/2017 ASSESSMENT YEAR: 2014 - 15 PAGE 3 OF 3 THE INHERENT LIMITATIONS OF THE SCOPE OF THE SAID STATUTORY PROVISION, DEAL WITH SUCH ISSUES . GRIEVANCE OF THE ASSESSING O FFICER IS THUS WHOLLY UNSUSTAINABLE IN LAW. WE THEREFORE REJE CT THE GRIEVANCE RAISED BY THE ASSESSING O FFICER AND DECLINED TO INTERFERE IN THE MATTER. 6. IN THE RESULT, THE APPEAL IS DISMISSED. PRONOUNCED IN THE OPEN COURT TODAY ON THE 10 TH OF DECEMBER , 2019 SD/ - SD/ - PAWAN SINGH PRAMOD KUMAR (JUDICIAL MEMBER) (VICE PRESIDENT) MUMBAI, DATED THE 10 T H OF DECEMBER, 2019 NISHANT VERMA SR.PS COPIES TO: (1) THE APPELLANT (2) THE RESPONDENT (3) CIT (4) CIT(A) (5) DR (6) GUARD FILE BY ORDER TRUE COPY ASSISTANT REGISTRAR INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES, MUMBAI