ACIT, New Delhi V. Dr. Pronnoy Roy, New Delhi

ITA 5802/DEL/2012

• Counselvise Citation: [2015] 121 COUNSELVISE.COM (IT) 0010 (ITAT-DELHI)
• Duration Of Justice: 2 year(s) 5 month(s) 20 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-05-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: F
• Next Hearing Date: 09-04-2015
• Assessment Year: 2008-2009
• Appeal Filed On: 16-11-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: VIKRAM SAHAY
• Assessee Lawyers: LALITHA KRISHNAMURTHY
• Keywords: Deemed to accrue or arise in india

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL IN THE INCOME TAX APPELLATE TRIBUNAL IN THE INCOME TAX APPELLATE TRIBUNAL IN THE INCOME TAX APPELLATE TRIBUNAL DELHI DELHI DELHI DELHI BENCH BENCH BENCH BENCH F FF F : NEW DELHI : NEW DELHI : NEW DELHI : NEW DELHI BEFORE SHRI G.C. GUPTA BEFORE SHRI G.C. GUPTA BEFORE SHRI G.C. GUPTA BEFORE SHRI G.C. GUPTA, VICE , VICE , VICE , VICE PRESIDENT AND PRESIDENT AND PRESIDENT AND PRESIDENT AND SHRI SHRI SHRI SHRI INTURI RAMA RAO INTURI RAMA RAO INTURI RAMA RAO INTURI RAMA RAO, , , , ACCOUNTANT ACCOUNTANT ACCOUNTANT ACCOUNTANT MEMBER MEMBER MEMBER MEMBER ITA NO ITA NO ITA NO ITA NO . .. . 5802/DEL/2012 5802/DEL/2012 5802/DEL/2012 5802/DEL/2012 ASSESSMENT YEAR ASSESSMENT YEAR ASSESSMENT YEAR ASSESSMENT YEAR : : : : 2008 2008 2008 2008 - -- - 09 0909 09 ASSISTANT COMMISSIONER OF ASSISTANT COMMISSIONER OF ASSISTANT COMMISSIONER OF ASSISTANT COMMISSIONER OF INCOME TAX, INCOME TAX, INCOME TAX, INCOME TAX, CIRCLE CIRCLE CIRCLE CIRCLE- -- -13(1), 13(1), 13(1), 13(1), N NN NEW DELHI. EW DELHI. EW DELHI. EW DELHI. VS. VS. VS. VS. DR. PRANNOY ROY, DR. PRANNOY ROY, DR. PRANNOY ROY, DR. PRANNOY ROY, B BB B- -- -207, GREATER KAILASH, 207, GREATER KAILASH, 207, GREATER KAILASH, 207, GREATER KAILASH, PART PART PART PART- -- -1, 1, 1, 1, NEW DELHI NEW DELHI NEW DELHI NEW DELHI 110 048. 110 048. 110 048. 110 048. PAN : AAHPR6037K. PAN : AAHPR6037K. PAN : AAHPR6037K. PAN : AAHPR6037K. (APPELLANT) (RESPONDENT) ASSESSEE BY : SMT. LALITHA KRISHNAMURTHY, CA. REVENUE BY : SHRI VIKRAM SAHAY, SR.DR. DATE OF HEARING : 09.04.2015 09.04.2015 09.04.2015 09.04.2015 DATE OF PRONOUNCEMENT : 06.05.2015 06.05.2015 06.05.2015 06.05.2015 ORDER ORDER ORDER ORDER PER G.C. GUPTA PER G.C. GUPTA PER G.C. GUPTA PER G.C. GUPTA, VP , VP , VP , VP : :: : THIS APPEAL BY THE REVENUE FOR THE ASSESSMENT YEAR 200 8-09 IS DIRECTED AGAINST THE ORDER OF LEARNED CIT(A)-XVI, N EW DELHI DATED 29 TH AUGUST, 2012. 2. THE GROUNDS OF APPEAL RAISED BY THE REVENUE READ A S UNDER:- 1. WHETHER ON THE FACTS & IN THE CIRCUMSTANCES OF THE CASE, THE LD.CIT(A) HAS ERRED IN DELETING THE ADDITIO N OF RS.16,66,37,966/- BY NOT APPRECIATING THE FACT THAT THE JAPAN BRANCH NEITHER HAS AN INDEPENDENT IDENTITY NOR IT HAS ANY BUSINESS ACTIVITY OF ITS OWN AND THE OUTSOURCING COST OF PAYMENT MADE BY THE ASSESSEE TO HCL JAPAN IS DEEMED INCOME WITHIN THE MEANING OF SEC. 9(1)(VII) OF THE ACT. 2. WHETHER ON THE FACTS & IN THE CIRCUMSTANCES OF THE CASE, THE LD.CIT(A) HAS ERRED IN NOT APPRECIATING THE FACT ITA-5802/DEL/2012 2 THAT THE INVOICES FILED BY THE ASSESSEE SHOWS THAT NEC HCL SYSTEMS TECHNOLOGY INDIA IS THE EXPORTER AND NEC SYSTEM TECHNOLOGIES LTD. JAPAN IS THE BUYER AND THE SOURCE OF PAYMENT OR INCOME OF THE NON-RESIDENT IS INDIA. 3. WHETHER ON THE FACTS & IN THE CIRCUMSTANCES OF THE CASE, THE LD.CIT(A) HAS ERRED IN NOT APPRECIATING THE FACT THAT SINCE THE ASSESSEE HAS INCURRED OUTSOURCING EXPENSES IN THE NATURE OF FEES FOR TECHNICAL SERVICES AND SINCE THE INCOME IS CHARGEABLE TO TAX IN INDIA WITHIN THE MEANING OF SEC. 40(A)(I) OF THE ACT, TDS MUST BE DEDUCTED ON SUCH PAYMENTS AS PER THE REQUIREMENT OF SEC. 195 OF THE ACT. 3. LEARNED DR HAS RELIED ON THE ORDER OF THE ASSESSING O FFICER. THE LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE ONLY ISSUE IN THIS APPEAL OF THE REVENUE IS REGARDING VALIDITY OF PENAL TY IMPOSED UNDER SECTION 271(1)(C) OF THE INCOME-TAX ACT, 1961. SHE SUBMITTED THAT PENALTY UNDER SECTION 271(1)(C) OF THE ACT WAS RIGHT LY DELETED BY THE LEARNED CIT(A) AS THE ASSESSEE HAS DISCLOSED ALL INFORMATIO N RELATING TO THE RECEIPT OF INCOME FROM UK WHILE FILING THE RETU RN OF INCOME ITSELF AND, UPON RECEIPT OF REFUND FROM THE TAX WITHHELD I N UK, HE FILED A REVISED COMPUTATION INCLUDING THE RECEIPT OF REFUND AND INTEREST THEREON FROM UK. SHE SUBMITTED THAT THE FIGURES OF R ETURNED INCOME AS WELL AS ASSESSED INCOME ARE THE SAME AND THE ONLY CHANGE WAS IN THE FIGURES OF TDS. THEREFORE, NO PENALTY UNDER SECTION 271(1)(C) OF THE ACT COULD BE IMPOSED ON THE ASSESSEE. 4. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND HAVE PER USED THE ORDER OF THE ASSESSING OFFICER AND THE LEARNED CIT(A). WE FIND THAT THE ASSESSEE HAS DISCLOSED ALL MATERIAL FACTS RELEVANT FOR HIS A SSESSMENT AT THE TIME OF FILING OF ORIGINAL RETURN ITSELF. ADMI TTEDLY, THE FIGURES OF RETURNED INCOME AS WELL AS ASSESSED INCOME IN THIS CASE WER E THE SAME. THE ASSESSEE, UPON RECEIVING THE REFUND FROM THE TAX WITHHELD IN UK, HAS FILED A REVISED COMPUTATION INCLUDING TH E RECEIPT OF REFUND ITA-5802/DEL/2012 3 AND INTEREST THEREON IN HIS TOTAL INCOME. THE ONLY C HANGE WAS IN THE FIGURES OF TDS AND NOT IN THE INCOME OF THE ASSESSEE. I N THESE FACTS, WE ARE OF THE VIEW THAT NO CASE OF PENALTY COULD BE MADE OUT BY THE REVENUE AND THERE WAS NO MISTAKE IN THE ORDER OF LEAR NED CIT(A) ON THIS ISSUE IN HOLDING THAT THE ASSESSEE WAS NOT LIABLE TO PENALTY UNDER SECTION 271(1)(C) AND IN DELETING THE PENALTY IMPOSE D ON THE ASSESSEE. ACCORDINGLY, THE GROUNDS OF APPEAL OF THE REVENUE AR E DISMISSED. 5. IN THE RESULT, THE APPEAL OF THE REVENUE IS DISMISSED . DECISION PRONOUNCED IN THE OPEN COURT ON 6 TH MAY, 2015. SD/- SD/- ( (( ( INTURI RAMA RAO INTURI RAMA RAO INTURI RAMA RAO INTURI RAMA RAO ) )) ) (G. (G. (G. (G. C. GUPTA C. GUPTA C. GUPTA C. GUPTA ) )) ) ACCOUNTANT ACCOUNTANT ACCOUNTANT ACCOUNTANT MEMBER MEMBER MEMBER MEMBER VICE PRESIDENT VICE PRESIDENT VICE PRESIDENT VICE PRESIDENT VK. COPY FORWARDED TO: - 1. APPELLANT : ASSISTANT COMMISSIONER OF INCOME TAX, ASSISTANT COMMISSIONER OF INCOME TAX, ASSISTANT COMMISSIONER OF INCOME TAX, ASSISTANT COMMISSIONER OF INCOME TAX, CI CICI CIRCLE RCLE RCLE RCLE- -- -13(1), NEW DELHI. 13(1), NEW DELHI. 13(1), NEW DELHI. 13(1), NEW DELHI. 2. RESPONDENT : DR. PRANNOY ROY, DR. PRANNOY ROY, DR. PRANNOY ROY, DR. PRANNOY ROY, B BB B- -- -207, GREATER KAILASH, PART 207, GREATER KAILASH, PART 207, GREATER KAILASH, PART 207, GREATER KAILASH, PART- -- -1, 1, 1, 1, NEW DELHI NEW DELHI NEW DELHI NEW DELHI 110 048. 110 048. 110 048. 110 048. 3. CIT 4. CIT(A) 5. DR, ITAT ASSISTANT REGISTRAR