Integra Software Services P Ltd., CHENNAI V. JCIT, Pondicherry

ITA 598/CHNY/2017

• Counselvise Citation: [2019] 115 COUNSELVISE.COM (IT) 6213 (ITAT-CHENNAI)
• Duration Of Justice: 2 year(s) 7 month(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-10-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 06-02-2018
• Assessment Year: 2011-2012
• Appeal Filed On: 10-03-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: DR M SRINIVASA RAO
• Assessee Lawyers: S SRIDHAR
• Keywords: Business income; Transfer pricing; Double taxation relief; Permanent establishment; Advance ruling; Reasonable cause; Set aside
• Section: 40(a)(ia); 195

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL D BENCH, CHENNAI . . . , . !', $ '% BEFORE SHRI N.R.S. GANESAN, JUDICIAL MEMBER AND SHRI S. JAYARAMAN, ACCOUNTANT MEMBER ./ ITA NO.2189/CHNY/2017 ' (' / ASSESSMENT YEAR : 2011-12 THE DEPUTY COMMISSIONER OF INCOME TAX, PONDICHERRY CIRCLE, KANNAIAH BUSINESS CENTRE, NO.378-386, M.G. ROAD, PUDUCHERRY 605 001. V. M/S INTEGRA SOFTWARE SERVICES PVT. LTD., 100 FEET ROAD, PAKKAMUDAIYANPET, PONDICHERRY 605 008. PAN : AAACI 6193 B (*+/ APPELLANT) (,-*+/ RESPONDENT) ./ ITA NO.598/CHNY/2017 ' (' / ASSESSMENT YEAR : 2011-12 M/S INTEGRA SOFTWARE SERVICES PVT. LTD., 100 FEET ROAD, PAKKAMUDAIYANPET, PONDICHERRY 605 008. V. THE JOINT COMMISSIONER OF INCOME TAX, PONDICHERRY RANGE, PONDICHERRY. (*+/ APPELLANT) (,-*+/ RESPONDENT) ! . / /REVENUE BY : DR. M. SRINIVASA RAO, CIT '01 . / /ASSESSEE BY : SHRI S. SRIDHAR, ADVOCATE 2 . 1$ / DATE OF HEARING : 22.07.2019 34( . 1$ / DATE OF PRONOUNCEMENT : 11.10.2019 2 I.T.A. NO.2189/CHNY/17 I.T.A. NO.598/CHNY/17 / O R D E R PER N.R.S. GANESAN, JUDICIAL MEMBER : BOTH THE REVENUE AND THE ASSESSEE HAVE FILED THE APPEALS AGAINST THE VERY SAME ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS), PUDUCHERRY, DATED 27.01.2017 AND PERTAIN TO THE ASSESSMENT YEAR 2011-12. THEREFORE, WE HEARD BOTH THE APPEALS TOGETHER AND DISPOSING THE SAME BY THIS COMMON ORDE R. 2. THERE WAS A DELAY OF 146 DAYS IN FILING THE APPE AL BY THE REVENUE IN I.T.A. NO.2189/CHNY/2017. THE REVENUE H AS FILED APPLICATION FOR CONDONATION OF DELAY. HAVING HEARD THE LD. D.R. AND THE LD.COUNSEL FOR THE ASSESSEE, THIS TRIBUNAL FIND S THAT THERE WAS A REASONABLE CAUSE FOR NOT FILING THE APPEAL BY THE R EVENUE WITHIN THE PRESCRIBED TIME BEFORE THIS TRIBUNAL. THEREFORE, THE DELAY OF 146 DAYS IN FILING THE APPEAL BEFORE THIS TRIBUNAL IS C ONDONED AND THE APPEAL OF THE REVENUE IS ADMITTED. 3. DR. M. SRINIVASA RAO, THE LD. DEPARTMENTAL REPRE SENTATIVE, SUBMITTED THAT THE ASSESSEE IS ENGAGED ITSELF IN TH E BUSINESS OF E- PUBLISHING. ACCORDING TO THE LD. D.R., THE ASSESSE E-COMPANY UNDERTAKES EDITORIAL SERVICES, MULTILINGUAL TYPESET TING AND DATA 3 I.T.A. NO.2189/CHNY/17 I.T.A. NO.598/CHNY/17 CONVERSION. THE ASSESSEE-COMPANY ADMITTEDLY TRANSA CTED WITH ITS OVERSEAS ASSOCIATED CONCERNS TO THE EXTENT OF MORE THAN 15 CRORES. ACCORDING TO THE LD. D.R., THE ASSESSING O FFICER REFERRED THE MATTER TO THE TRANSFER PRICING OFFICER AS REQUI RED UNDER SECTION 92CA OF THE INCOME-TAX ACT, 1961 (IN SHORT 'THE ACT '). THE TRANSFER PRICING OFFICER BY AN ORDER DATED 31.12.2014, FOUND THAT THE TRANSACTIONS WITH ASSOCIATED ENTERPRISE OUTSIDE IND IA WAS WITHIN ARM'S LENGTH AND THEREFORE, NO ADJUSTMENT WAS CONSI DERED NECESSARY. 4. DR. M. SRINIVASA RAO, THE LD. D.R. FURTHER SUBMI TTED THAT THE ASSESSEE CLAIMED 6,59,53,207/- TOWARDS OUTSOURCING CHARGES. ACCORDING TO THE LD. D.R., THE ASSESSEE EXPLAINED B EFORE THE ASSESSING OFFICER THAT THE OUTSOURCING CHARGES WAS 3,64,21,499/- ON WHICH TAX WAS DEDUCTED. HOWEVER, THE OUTSOURCES CHARGES TO THE EXTENT PAYMENT MADE 2,95,31,708/- ON WHICH TAX WAS NOT DEDUCTED AT SOURCE. THE LD. D.R. FURTHER SUBMITTED THAT THE ASSESSEE HAS PAID TO NON-RESIDENTS AT USA, UK, GERM ANY AND SPAIN IN RESPECT OF WHOM THE TAX WAS NOT DEDUCTED. THEREFORE, ACCORDING TO THE LD. D.R., THE ASSESSING OFFICER FO UND THAT THE ASSESSEE HAS NOT DEDUCTED TAX AS REQUIRED UNDER SEC TION 195 OF 4 I.T.A. NO.2189/CHNY/17 I.T.A. NO.598/CHNY/17 THE ACT. ACCORDINGLY, THE PAYMENT MADE TO THE NON- RESIDENTS AT USA, UK, GERMANY AND SPAIN TO THE EXTENT OF 2,95,31,708/- WAS DISALLOWED UNDER SECTION 40(A)(IA) OF THE ACT. 5. DR. M. SRINIVASA RAO, THE LD. D.R. FURTHER SUBMI TTED THAT THE PAYMENT MADE TO DIFFERENT PERSONS AT USA, UK, GERMA NY AND SPAIN AS DETAILED AT PAGE 3 TO 7 OF THE IMPUGNED OR DER OF THE CIT(APPEALS) WAS DISALLOWED BY THE ASSESSING OFFICE R FOR NON- DEDUCTION OF TAX. REFERRING TO THE ORDER OF THE CI T(APPEALS), THE LD. D.R. SUBMITTED THAT ALL THE RECIPIENTS ARE FOREIGN NATIONALS AND THE NATURE OF WORK DONE BY THEM WAS LISTED OUT AT PAGE 3 TO 5 OF THE ASSESSMENT ORDER. ACCORDING TO THE LD. D.R., ALL T HESE WORKS DONE BY THE NON-RESIDENTS AT USA, UK, GERMANY AND SPAIN INVOLVED TECHNOLOGY. HOWEVER, THERE WAS NO TRANSFER OF TECH NICAL SERVICES. HENCE, ACCORDING TO THE LD. D.R., THE QUESTION OF MAKE AVAILABLE THEORY IS NOT APPLICABLE AT ALL. THE CIT(APPEALS) FOUND THAT THE NON- RESIDENTS HAVE PROVIDED TECHNICAL SERVICES. SINCE THE TECHNOLOGY WAS NOT MADE AVAILABLE TO THE ASSESSEE BY THE NON-R ESIDENTS AT USA & UK, SO THAT THE ASSESSEE COULD PERFORM THOSE SERVICES INDEPENDENTLY, HE DELETED THE DISALLOWANCE MADE BY THE ASSESSING OFFICER BY CITING PROVISIONS IN THE DOUBLE TAXATION AVOIDANCE 5 I.T.A. NO.2189/CHNY/17 I.T.A. NO.598/CHNY/17 AGREEMENT BETWEEN INDIA & USA AND INDIA & UNITED KI NGDOM. IN RESPECT OF THE PAYMENT MADE TO THE NON-RESIDENTS AT GERMANY AND SPAIN, THE CIT(APPEALS) FOUND THAT EVEN THOUGH THE SERVICES RENDERED BY THE NON-RESIDENTS AT GERMANY AND SPAIN WERE TECHNICAL SERVICES, THE MAKE AVAILABLE CLAUSE IS NOT AVAILABLE IN THE DOUBLE TAXATION AVOIDANCE AGREEMENT BETWEEN IND IA & GERMANY AND INDIA & SPAIN. THEREFORE, HE CONFIRMED THE DISALLOWANCE MADE BY THE ASSESSING OFFICER IN RESPE CT OF NON- RESIDENT AT GERMANY AND SPAIN. 6. ACCORDING TO THE LD. D.R., THE DEPARTMENT HAS FI LED THE APPEAL AGAINST THE ORDER OF THE CIT(APPEALS) IN RES PECT OF THE PAYMENT MADE TO THE NON-RESIDENTS AT USA AND UK. H OWEVER, IN RESPECT OF THE PAYMENT MADE TO NON-RESIDENTS AT GER MANY AND SPAIN, THE ASSESSEE HAS FILED THE APPEAL. ACCORDI NG TO THE LD. D.R., THE SERVICES RENDERED BY THE NON-RESIDENTS AR E TECHNICAL SERVICES, THEREFORE, THE ASSESSEE IS BOUND TO DEDUC T TAX AT THE TIME OF MAKING THE PAYMENT. INVITING THE ATTENTION OF T HIS TRIBUNAL TO THE ORDER OF THE CIT(APPEALS), MORE PARTICULARLY AT PAG E 26 PARA 7.8.10, THE LD. D.R. SUBMITTED THAT THE SERVICES RENDERED B Y THE NON- RESIDENTS ARE TECHNICAL SERVICES AND THE SAID SERVI CES WERE UTILISED 6 I.T.A. NO.2189/CHNY/17 I.T.A. NO.598/CHNY/17 IN INDIA. THEREFORE, THE FEE PAID FOR TECHNICAL SE RVICES WOULD BE TAXABLE IN INDIA. IN OTHER WORDS, ACCORDING TO THE LD. D.R., ALL THE PAYMENTS MADE TO THE NON-RESIDENTS ARE TAXABLE IN I NDIA IN THE HANDS OF THE NON-RESIDENTS. HENCE, THE ASSESSEE IS LIABLE TO DEDUCT TAX UNDER SECTION 40(A)(IA) OF THE ACT. THEREFORE, ACCORDING TO THE LD. D.R., THE CIT(APPEALS) OUGHT NOT TO HAVE DELETE D THE DISALLOWANCE MADE BY THE ASSESSING OFFICER IN RESPE CT OF THE PAYMENTS MADE TO NON-RESIDENTS AT USA & UK ALSO. 7. ON A QUERY FROM THE BENCH WHEN THE ASSESSING OFF ICER AT PARA 6 OF HIS ORDER CATEGORICALLY SAYS THAT THE SER VICES RENDERED BY THE NON-RESIDENTS DID NOT INVOLVE ANY TECHNOLOGY, C AN THE REVENUE NOW CLAIM BEFORE THIS TRIBUNAL THAT THE SERVICES RE NDERED BY THE NON-RESIDENTS ARE TECHNICAL SERVICES? THE ATTENTIO N OF THE LD. D.R. WAS ALSO INVITED TO THE GROUNDS OF APPEAL RAISED BE FORE THIS TRIBUNAL BY THE REVENUE THAT THE ONLY GRIEVANCE OF THE DEPAR TMENT APPEARS TO BE THAT THE ASSESSEE HAS NOT FILED FORM 15CA AND 15CB AND THE NATURE OF THE WORK RENDERED BY THE NON-RESIDENTS AR E NOT TECHNICAL SERVICES, THE LD. D.R. SUBMITTED THAT THE CIT(APPEA LS) AT PARA 7.8.10 HAS FOUND THAT THE SERVICES RENDERED BY THE NON-RESIDENTS ARE TECHNICAL SERVICES. HOWEVER, THERE WAS NO TRAN SFER OF TECHNICAL 7 I.T.A. NO.2189/CHNY/17 I.T.A. NO.598/CHNY/17 SERVICES. HENCE, ACCORDING TO THE LD. D.R., THE AS SESSEE IS LIABLE TO DEDUCT TAX UNDER SECTION 195 OF THE ACT. 6. ON THE CONTRARY, SHRI S. SRIDHAR, THE LD.COUNSEL FOR THE ASSESSEE, SUBMITTED THAT THE SERVICES RENDERED BY T HE NON- RESIDENTS AT UK, USA, GERMANY AND SPAIN ARE NOT TEC HNICAL SERVICES. REFERRING TO THE ASSESSMENT ORDER, THE L D.COUNSEL SUBMITTED THAT THE PAYMENTS WERE MADE TO INDIVIDUAL S AND CORPORATE BODIES WHO ARE NON-RESIDENTS IN BOTH THE APPEALS. ACCORDING TO THE LD. COUNSEL, THERE WAS NO OBLIGATI ON TO DEDUCT TAX UNDER SECTION 195 OF THE ACT SINCE THE PAYMENTS MAD E TO THEM ARE NOT TAXABLE IN INDIA. ACCORDING TO THE LD. COUNSEL , ALL THE NON- RESIDENTS ARE FOREIGN NATIONALS AND THEY ARE RESIDI NG OUTSIDE INDIA. THE SERVICES WERE ALSO RENDERED OUTSIDE INDIA. THE NON-RESIDENTS, WHO RENDERED SERVICE, HAVE NOT VISITED INDIA AT ANY POINT OF TIME. THE NON-RESIDENTS WHO RENDERED SERVICES HAVE NO PER MANENT ESTABLISHMENT OR BUSINESS CONNECTION IN INDIA. ACC ORDING TO THE LD. COUNSEL, THE SERVICES RENDERED BY THE NON-RESIDENTS ARE COPY EDITING, INDEXING AND PROOF READING WHICH ARE ALL E SSENTIALLY NON- TECHNICAL SERVICES. IT CANNOT ALSO BE CONSIDERED T O BE PROFESSIONAL SERVICES AS DEFINED UNDER SECTION 9 OF THE ACT AND UNDER RESPECTIVE 8 I.T.A. NO.2189/CHNY/17 I.T.A. NO.598/CHNY/17 DOUBLE TAXATION AVOIDANCE AGREEMENTS. THE CHARTERE D ACCOUNTANTS CERTIFIED THAT THE PAYMENTS MADE TO NON -RESIDENTS ARE NOT TAXABLE IN INDIA AND SUCH CERTIFICATES WERE FIL ED BEFORE THE RESPECTIVE BANKERS BEFORE REMITTING THE PAYMENTS. 7. REFERRING TO THE ASSESSMENT ORDER, MORE PARTICUL ARLY AT PAGE 3, THE LD.COUNSEL FOR THE ASSESSEE SUBMITTED THAT C OPY EDITING IS NOTHING BUT FORMATTING, STYLE AND ACCURACY OF TEXT. THE COPY WRITER CANNOT CHANGE THE SUBSTANCE OF THE TEXT. ACCORDING TO THE LD. COUNSEL, COPY EDITING WAS DONE BEFORE TYPESETTING A ND PROOF READING. AT THE BEST, ACCORDING TO THE LD. COUNSEL , THE COPY EDITING INVOLVES SPELLING CORRECTION, PUNCTUATION, GRAMMAR, TERMINOLOGY, ETC. TO ENSURE THAT THE SENTENCES ARE FORMED IN SUCH A M ANNER THAT THE READERS OF THE TEXT CAN UNDERSTAND EASILY THE SUBST ANCE. IN OTHER WORDS, ACCORDING TO THE LD. COUNSEL, COPY EDITORS A RE EXPECTED TO ENSURE THAT THE TEXT FLOWS IN THE LANGUAGE IN WHICH THEY ARE COPY EDITING. ACCORDING TO THE LD. COUNSEL, IN NO WAY I T INVOLVES A TECHNICAL SERVICE, HENCE, THE PAYMENT MADE FOR COPY EDITING CANNOT BE CONSIDERED TO BE A TECHNICAL SERVICE. 9 I.T.A. NO.2189/CHNY/17 I.T.A. NO.598/CHNY/17 8. NOW COMING TO INDEXING, THE LD.COUNSEL FOR THE A SSESSEE SUBMITTED THAT THE INDEXING IS NOTHING BUT AN ARRAN GEMENT OF ENTRIES DESIGNED TO ENABLE THE READERS TO LOCATE INFORMATIO N IN THE DOCUMENTS. ACCORDING TO THE LD. COUNSEL, THE PROCE SS OF CREATING AN INDEX IS CALLED INDEXING AND THE PERSON WHO DOES IT IS CALLED INDEXER. THE MAIN TASK OF INDEXER IS CLASSIFICATIO N OF THE DOCUMENTS TO INDICATE WHAT THE DOCUMENT IS ABOUT AND TO SUMMA RISE THE CONTENT TO INCREASE ITS IDENTIFIABILITY. THE INDEX ER MAY NOT BE CONVERSED WITH SUBJECT MATTER OF THE TEXT. ACCORDI NG TO THE LD. COUNSEL, THE INDEXATION CANNOT BE CONSIDERED TO BE A TECHNICAL SERVICE AT ALL. 9. NOW COMING TO PROOF READING, THE LD.COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE PROOF READER COMPARES T HE COPY WITH CORRESPONDING TYPESET TO IDENTIFY ANY ERROR IN THE MANUSCRIPT PAGE. ACCORDING TO THE LD. COUNSEL, PROOF READER OR TYPES ETTER, GRAPHIC ARTIST DOES NOT REQUIRE TO HAVE ANY QUALIFICATION. REFERRING TO THE PROJECT MANAGEMENT, THE LD.COUNSEL SUBMITTED THAT I T IS A WORK GIVEN BY PUBLISHER RIGHT FROM THE RECEIPT OF MANUSC RIPT TILL THE RELEASE OF BOOK FOR FINAL PRINTING. ACCORDING TO T HE LD. COUNSEL, THE SERVICE PROVIDER COORDINATES WITH OTHER PARTIES ON THE INSTRUCTIONS OF 10 I.T.A. NO.2189/CHNY/17 I.T.A. NO.598/CHNY/17 THE SERVICE RECIPIENT AND REPORTS ON THE PROGRESS O F THE WORK UNTIL THE DELIVERY OF TEXT TO THE AUTHOR OR PUBLISHER. I N FACT, ACCORDING TO THE LD. COUNSEL, THEY ARE COORDINATING WITH PEOPLE, INTEGRATING AND PERFORMING THE ACTIVITIES SO AS TO DELIVER THE TEXT TO THE ASSESSEE IN A FEASIBLE MANNER. REFERRING TO THE ANCILLARY SERV ICES, THE LD.COUNSEL SUBMITTED THAT THE SERVICE PROVIDER MAY ALTER THE DESIGNS IN SUCH A MANNER THAT THE REQUIREMENT OF AUTHOR OR PUBLISHER IS FULFILLED. FOR ALL THESE SERVICES REFERRED ABOVE, ACCORDING TO THE LD. COUNSEL, THE SERVICE PROVIDER NEED NOT HAVE ANY KNO WLEDGE ABOUT THE SUBJECT OF THE TEXT. THE SERVICE PROVIDER NEED NOT UNDERSTAND THE MATERIAL BEING COPY EDITED OR INDEXED OR SUBJEC TED TO PROOF READING. ACCORDING TO THE LD. COUNSEL, IT IS ONLY A CLERICAL WORK CARRIED ON BY THE ASSESSEE THROUGH OUTSOURCING FROM THE INDIVIDUALS / CORPORATE BODY OUTSIDE THE COUNTRY. THE SERVICES RENDERED BY THE NON-RESIDENT, SUCH AS EDITING, INDEXING, PROOF READ ING, ETC., ARE NOT TECHNICAL SERVICE. MOREOVER, NO TECHNOLOGY ALSO INV OLVED. THEREFORE, THE PAYMENT MADE TO THEM BY THE ASSESSEE IS NOT TAXABLE IN INDIA. HENCE, ACCORDING TO THE LD. COUN SEL, THE ASSESSEE IS NOT LIABLE TO DEDUCT ANY TAX AT THE TIME OF PAYM ENT. 11 I.T.A. NO.2189/CHNY/17 I.T.A. NO.598/CHNY/17 10. REFERRING TO THE DECISION OF THIS BENCH OF THE TRIBUNAL IN COSMIC GLOBAL LTD. V. ACIT (2014) 34 ITR(TRIB) 114, THE LD.COUNSEL FOR THE ASSESSEE SUBMITTED THAT TRANSLATION WORK WA S HELD TO BE NOT A TECHNICAL SERVICE. ACCORDING TO THE LD. COUNSEL, THIS DECISION WAS DISTINGUISHED BY THE CIT(APPEALS) AS NOT APPLICABLE TO THE FACTS OF THE CASE WITHOUT ANY REASON OR JUSTIFICATION. REFE RRING TO THE ASSESSMENT ORDER, MORE PARTICULARLY PAGE 6, THE LD. COUNSEL SUBMITTED THAT THE LEGAL SERVICE RENDERED FROM ABRO AD WAS HELD TO BE NOT TAXABLE IN INDIA WITHOUT ANY FIXED BASE IN I MP POWER LTD. V. ITO (2007) 107 TTJ (MUM) 522. IT WAS ALSO FOUND TO BE NOT TAXABLE IN INDIA WHEN INFORMATION SERVICE RENDERED BY ELECT RONIC MEDIA PROMOTING DOWNLOADING IN INDIA BY THE AUTHORITY FOR ADVANCE RULING IN ABC LTD. (2006) 284 ITR 1. ACCORDING TO THE LD. COUNSEL, THE SERVICES RENDERED BY THE NON-RESIDENTS ARE NOT TECH NICAL SERVICES AT ALL. THE ASSESSING OFFICER HIMSELF FOUND IN THE AS SESSMENT ORDER THAT THE SERVICES RENDERED BY THE NON-RESIDENTS ARE NOT TECHNICAL SERVICES. 11. REFERRING TO PAGE 8 OF THE ASSESSMENT ORDER, TH E LD.COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE EXPRESSION FEE S FOR TECHNICAL SERVICES AS DEFINED IN EXPLANATION 2 TO SECTION 9( 1)(VII) OF THE ACT 12 I.T.A. NO.2189/CHNY/17 I.T.A. NO.598/CHNY/17 WAS CONSIDERED BY THE MUMBAI BENCH OF THIS TRIBUNAL IN TUV BAYREN (INDIA) LTD. IN I.T.A. NO. 4944/MUM/2002. T HE TRIBUNAL FOUND THAT TECHNICAL SERVICE REQUIRES EXPERTISE IN TECHNOLOGY AND PROVIDING THE CLIENT SUCH TECHNICAL EXPERTISE. IN THE PRESENT CASE, ACCORDING TO THE LD. COUNSEL, THE PERSONS WHO COPY EDITED, INDEXED AND DONE PROOF READING HAVE NO EXPERT KNOWLEDGE IN THE SUBJECT OF THE TEXT. THEREFORE, ACCORDING TO THE LD. COUNSEL, THIS CANNOT BE CONSIDERED TO BE A TECHNICAL SERVICE. 12. REFERRING TO MANAGERIAL SERVICE, THE LD.COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE MUMBAI BENCH OF THIS TR IBUNAL FOUND THAT THE MANAGERIAL SERVICE IS USED IN THE CONTEXT OF RUNNING THE BUSINESS OF THE CLIENT. IN THIS CASE, ACCORDING TO THE LD. COUNSEL, THERE IS NO SUCH REQUIREMENT OF RUNNING AND MANAGIN G THE BUSINESS OF THE ASSESSEE BY THE NON-RESIDENTS, THEREFORE, TH E PAYMENT CANNOT BE CONSIDERED TO BE FOR MANAGERIAL SERVICE. THE MUMBAI BENCH ALSO FOUND THAT THE CONSULTANCY SERVICE IS TO BE UNDERSTOOD AS ADVISORY SERVICE WHEREIN NECESSARY ADVICE AND CO NSULTATION WAS GIVEN TO ITS CLIENTS FOR THE PURPOSE OF CLIENTS BU SINESS. ACCORDING TO THE LD. COUNSEL, IN THE PRESENT CASE, IT IS A SIMPL E COPY EDITING, INDEXING AND PROOF READING OF THE TEXT AND THE PERS ONS, WHO CARRIED 13 I.T.A. NO.2189/CHNY/17 I.T.A. NO.598/CHNY/17 ON THE WORK, HAVE NO EXPERT KNOWLEDGE IN RESPECT OF THE TEXT THEY COPY EDITED, INDEXED AND DONE PROOF READING. 13. REFERRING TO PAGE 26 OF THE ASSESSMENT ORDER, M ORE PARTICULARLY PARA 6, THE LD.COUNSEL FOR THE ASSESSE E SUBMITTED THAT THE ASSESSING OFFICER IN CATEGORICAL TERM FOUND THA T THE NATURE OF SERVICE RENDERED BY THE NON-RESIDENTS DOES NOT INVO LVE ANY TECHNICAL SERVICE. ACCORDING TO THE LD. COUNSEL, P ROVISIONS OF SECTION 9(1)(VII) OF THE ACT WILL APPLY ONLY IN THE CASE OF APPLICATION OF TECHNOLOGY AND IF SUCH TECHNOLOGY IS MADE AVAILA BLE TO THE ASSESSEE SO AS TO ENABLE TO FUNCTION INDEPENDENTLY. ACCORDING TO THE LD. COUNSEL, THE ASSESSING OFFICER SPECIFICALLY FOUND THAT SINCE THERE IS NO TECHNOLOGY INVOLVED, THE PROVISIONS OF SECTION 9(1)(VII) OF THE ACT MAY NOT APPLY TO ALL THE ABOVE SERVICES. T HE ONLY OBSERVATION OF THE ASSESSING OFFICER AT PARA 6, ACC ORDING TO THE LD. COUNSEL, WAS THAT CERTIFICATES IN FORM 15CA AND 15C B WERE NOT OBTAINED AND FILED. THE ASSESSING OFFICER FURTHER F OUND THAT FORMS WERE NOT FILED IN FORM 15CA AND 15CB, THE ASSESSEE WAS REQUIRED TO DEDUCT TAX ON PAYMENT MADE TO THE NON-RESIDENTS FOR THE ABOVE SERVICES. ACCORDING TO THE LD. COUNSEL, WHEN THE A SSESSING OFFICER HIMSELF FOUND THAT THE SERVICES RENDERED BY THE NON -RESIDENTS ARE 14 I.T.A. NO.2189/CHNY/17 I.T.A. NO.598/CHNY/17 NOT TECHNICAL SERVICES, IT CANNOT NOW BE CLAIMED TH AT THE SERVICES RENDERED BY THE NON-RESIDENTS ARE TECHNICAL SERVICE S BY THE CIT(APPEALS). 14. THE LD.COUNSEL FOR THE ASSESSEE FURTHER SUBMITT ED THAT THE DEPARTMENT HAS APPEALED AGAINST THE ORDER OF THE CI T(APPEALS) IN RESPECT OF PAYMENT MADE TO NON-RESIDENTS AT USA AND UK. IN RESPECT OF THE PAYMENT MADE TO THE NON-RESIDENTS AT USA AND UK, THE CIT(APPEALS) DELETED THE DISALLOWANCE MADE BY T HE ASSESSING OFFICER ON THE GROUND THAT THE TECHNOLOGY WAS NOT M ADE AVAILABLE TO THE ASSESSEE, THEREFORE, THERE CANNOT BE ANY DISALL OWANCE UNDER SECTION 40(A)(IA) OF THE ACT. HOWEVER, IN RESPECT OF PAYMENT MADE TO NON-RESIDENTS AT GERMANY AND SPAIN, THE CIT(APPE ALS) FOUND THAT THE MAKE AVAILABLE CLAUSE WAS NOT AVAILABLE IN DOUBLE TAXATION AVOIDANCE AGREEMENT BETWEEN INDIA AND GERM ANY AND INDIA AND SPAIN. THEREFORE, THE CIT(APPEALS) FOUND THAT THE SERVICES RENDERED BY THE NON-RESIDENTS ARE TECHNICA L SERVICES, HENCE, THE PAYMENT MADE TO NON-RESIDENTS BY THE ASS ESSEE IS TAXABLE IN INDIA, HENCE, THE ASSESSEE IS LIABLE TO DEDUCT TAX. THEREFORE, THE ASSESSEE FILED APPEAL AGAINST THE OR DER OF THE CIT(APPEALS) IN RESPECT OF PAYMENT MADE TO NON-RESI DENTS AT 15 I.T.A. NO.2189/CHNY/17 I.T.A. NO.598/CHNY/17 GERMANY AND SPAIN. THE LD.COUNSEL FURTHER SUBMITTE D THAT IN RESPECT OF USA, UK, GERMANY AND SPAIN, THE SERVICES RENDERED BY THE NON-RESIDENTS ARE NOT TECHNICAL SERVICES, THERE FORE, IT CANNOT BE CONSIDERED TO BE FEES FOR TECHNICAL SERVICES. HENC E, THE NON- RESIDENTS ARE NOT LIABLE TO PAY TAX IN INDIA IN RES PECT OF THE PAYMENTS RECEIVED FROM THE ASSESSEE. THEREFORE, ACCORDING T O THE LD. COUNSEL, THE ASSESSEE IS NOT LIABLE TO DEDUCT TAX U NDER SECTION 195 OF THE ACT, HENCE, THERE CANNOT BE ANY DISALLOWANCE UNDER SECTION 40(A)(IA) OF THE ACT. 15. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS ON EIT HER SIDE AND PERUSED THE RELEVANT MATERIAL AVAILABLE ON RECORD. IT IS NOT IN DISPUTE THAT THE ASSESSEE HAS PAID TO THE NON-RESID ENTS TO THE EXTENT OF 2,95,31,708/-. THE ASSESSEE CLAIMS THAT THE SERVIC ES RENDERED BY THE NON-RESIDENTS AT UK, USA, GERMANY A ND SPAIN ARE NOT TECHNICAL IN NATURE. THEREFORE, THE NON-RESIDE NTS ARE NOT LIABLE TO PAY TAX IN INDIA, HENCE NO TAX NEEDS TO BE DEDUC TED AS PROVIDED UNDER SECTION 195 OF THE ACT. THE ASSESSING OFFICE R, AFTER EXTRACTING THE SUBMISSION OF THE ASSESSEE AND THE C ASE LAWS REFERRED BY THE ASSESSEE, THE DETAILS OF THE PAYMEN TS MADE TO VARIOUS INDIVIDUALS AND CORPORATE BODIES OUTSIDE TH E COUNTRY, HAS 16 I.T.A. NO.2189/CHNY/17 I.T.A. NO.598/CHNY/17 OBSERVED AS FOLLOWS AT PARA 6 ON PAGE 26 OF HIS ORD ER. FOR THE PURPOSE OF CONVENIENCE, WE ARE REPRODUCING THE PARA 6, WHICH READS AS FOLLOWS:- 6. FROM THE FOREGOING, THE VERY INTENTION OF THE ACT IS CLEAR THAT THERE SHOULD NOT BE ANY OMISSION TO DEDU CT TAX AT SOURCE ON THE PRETEXT THAT THE PERSON IS NOT HAVI NG A RESIDENCE OR PLACE OF BUSINESS OR BUSINESS CONNECTI ON IN INDIA OR ANY OTHER PRESENCE IN ANY MANNER WHATSOEVE R IN INDIA. AS PER DTAA, THE TERM PROFESSIONAL SERVICE S DEFINED AS INDEPENDENT ACTIVITIES OF SCIENTIFIC, LI TERARY, ARTISTIC, EDUCATIONAL OR TEACHING ACTIVITIES AS WEL L AS INDIVIDUAL ACTIVITIES OF PHYSICIANS, SURGEONS, LAWY ERS, ENGINEERS, ARCHITECTS, DENTISTS AND ACCOUNTANTS. T HE QUESTION ARISES WHETHER ALL THE ABOVE SERVICES WOUL D BE TAXABLE AS INCOME BY WAY OF FEES FOR TECHNICAL SERVI CES AS DEFINED IN EXPLANATION TO SEC. 9(1)(VII). AS SEEN FR OM THE NATURE OF SERVICES RENDERED BY THE NON RESIDENT INDIVIDUALS, THE WORK OF TRANSLATION, COPY EDITING AND INDEXING DO NOT INVOLVE ANY TECHNOLOGY. PROVISIONS OF SECTION 9(1)(VII) WILL APPLY ONLY IN CASE OF APPLICA TION OF TECHNOLOGY AND IF SUCH TECHNOLOGY IS MADE AVAILABLE TO THE INDIAN COMPANY COULD INDEPENDENTLY PERFORM THE TECH NICAL FUNCTION WITH SUCH KNOWLEDGE IMPARTED TO THE NONRES IDENT COMPANY. SINCE THERE IS NO TECHNOLOGY INVOLVED, TH E PROVISIONS OF SECTION 9(1)(VII) WOULD NOT APPLY TO A LL THE ABOVE SAID SERVICES. BESIDES THE CERTIFICATES IN FO RM 15CA AND 15CB WERE NOT OBTAINED AND FILED ONLINE. HENCE, THE ASSESSEE WAS REQUIRED TO DEDUCT TAX ON THE PAYMENTS MADE TO NON RESIDENTS FOR THE ABOVE SERVICES, PROVISIONS OF SECTION 195(6), 195(2), (3) AND (7) HAVE NOT BEEN COMPLIED WITH. 16. WE HAVE CAREFULLY GONE THROUGH THE GROUND NO.2 IN THE GROUNDS OF APPEAL RAISED BY THE REVENUE BEFORE THIS TRIBUNAL. FOR 17 I.T.A. NO.2189/CHNY/17 I.T.A. NO.598/CHNY/17 THE PURPOSE OF CONVENIENCE, GROUND NO.2 RAISED BEFO RE THIS TRIBUNAL IS REPRODUCED, WHICH READS AS FOLLOWS:- 2. THE LEARNED CIT(A) FAILED TO APPRECIATE THE FACT THAT THE NATURE OF SERVICES RENDERED BY THE NON-RES IDENT INDIVIDUALS DO NOT INVOLVE ANY TECHNOLOGY. AS PER DTAA, THE TERM PROFESSIONAL SERVICES DEFINED AS INDEPEN DENT ACTIVITIES OF SCIENTIFIC, LITERARY, ARTISTIC, EDUCA TIONAL OR TEACHING ACTIVITIES AS WELL AS INDEPENDENT ACTIVITI ES OF PHYSICIANS, SURGEONS, LAWYERS, ENGINEERS, ARCHITECT S, DENTISTS AND ACCOUNTANTS. AS SEEN FROM THE NATURE OF SERVICES RENDERED BY THE NON-RESIDENT INDIVIDUALS, THE WORK OF TRANSLATION, COPY EDITING AND INDEXING DO NO T INVOLVE ANY TECHNOLOGY. SINCE THERE IS NO TECHNOLO GY INVOLVED, THE PROVISIONS OF SEC. 9(1)(VII) WOULD NOT APPLY TO ALL THE ABOVE SAID SERVICES. BESIDES, THE CERTIFICA TES IN FORM 15CA AND 15CB WERE NOT OBTAINED AND FILED ONLINE. HENCE, THE ASSESSEE WAS REQUIRED TO DEDUCT TAX ON TH E PAYMENTS MADE TO NON-RESIDENTS FOR THE ABOVE SERVIC ES. 17. FROM THE ABOVE FINDING RECORDED BY THE ASSESSIN G OFFICER AT PARA 6 OF THE IMPUGNED ASSESSMENT ORDER AND THE GRO UND NO.2 RAISED BEFORE THIS TRIBUNAL BY THE REVENUE, IT APPE ARS THE MAIN CLAIM OF THE REVENUE IS THAT THE SERVICES RENDERED BY THE NON- RESIDENTS DO NOT INVOLVE ANY TECHNOLOGY AND IT IS A SPECIFIC CASE OF THE DEPARTMENT AS RAISED IN GROUND NO.2 BEFORE THIS TRIBUNAL THAT SINCE THERE IS NO TECHNOLOGY INVOLVED, THE PROVISIO NS OF SECTION 9(1)(VII) OF THE ACT WOULD NOT APPLY TO THE ABOVE S AID SERVICES. THE REVENUE APPEARS TO HAVE GRIEVANCE WITH REGARD TO FA ILURE OF THE 18 I.T.A. NO.2189/CHNY/17 I.T.A. NO.598/CHNY/17 ASSESSEE TO FILE CERTIFICATES IN FORM 15CA AND 15CB . HOWEVER, THE CIT(APPEALS), AFTER EXAMINING THE SERVICES RENDERED BY THE NON- RESIDENTS, FOUND THAT THE NON-RESIDENTS WHO RENDERE D SERVICES DO NOT HAVE ANY PERMANENT ESTABLISHMENT IN INDIA. THE CIT(APPEALS) ALSO FOUND THAT THERE WAS NO BUSINESS CONNECTION WI THIN THE MEANING OF SECTION 9(1)(I) OF THE ACT. THEREFORE, THE CIT(APPEALS) FOUND THAT SECTION 9(1)(I) OF THE ACT HAS NO APPLIC ATION TO THIS CASE AND PAYMENTS RECEIVED BY THE NON-RESIDENTS CANNOT B E ASSESSED AS THEIR BUSINESS INCOME IN INDIA UNDER SECTION 9(1)(I ) OF THE ACT. THIS FINDING OF THE CIT(APPEALS) WAS NOT CHALLENGED OR D ISPUTED BY THE REVENUE. FOR THE PURPOSE OF CONVENIENCE, WE ARE RE PRODUCING THE FINDING RECORDED BY THE CIT(APPEALS) AT PAGES 22 AN D 23 AT PARA 7.7 WHICH READS AS FOLLOWS:- 7.7 IT IS SEEN THAT THE A.O. INVOKED S 9(1)(I) AND IT S EXPLANATION WITH REFERENCE TO BUSINESS CONNECTION AND HELD THAT THERE IS BUSINESS CONNECTION AND SO THE P AYMENTS ARE TAXABLE IN THE HANDS OF NON-RESIDENTS IN INDIA. TO THE ASSESSEE IN INDIA, THE NON-RESIDENTS RENDERED SERVI CES ABROAD AND NOT IN INDIA. IN THE INSTANT CASE, IT C ANNOT BE SAID THAT THE NON-RESIDENTS CARRIED OUT THEIR BUSIN ESS ACTIVITY THROUGH A PERSON IN INDIA. THOSE NON-RESI DENTS DO NOT HAVE PE IN INDIA. AS SUCH, THERE IS NO BUSINES S CONNECTION WITHIN THE MEANING OF SECTION 9(1)(I). HENCE, IN THE FACTS AND CIRCUMSTANCES OF THE CASE, I HOLD SEC TION 9(1)(I) HAS NO APPLICATION IN THIS CASE AND THE PAYM ENTS 19 I.T.A. NO.2189/CHNY/17 I.T.A. NO.598/CHNY/17 RECEIVED BY THE NON-RESIDENTS CANNOT BE ASSESSED AS THEIR BUSINESS INCOME IN INDIA U/S 9(1)(I). 18. HOWEVER, THE CIT(APPEALS) FOUND THAT THE SERVIC ES RENDERED BY THE NON-RESIDENTS ARE TECHNICAL IN NATURE. AT P ARA 7.8.7., THE CIT(APPEALS) REFERRED CERTAIN PROFESSIONALS AND OBS ERVED THAT THE SERVICES RENDERED BY THEM ARE TECHNICAL NATURE. AT PARA 7.8.8, THE CIT(APPEALS) REFERRED THE DECISION OF THIS TRIBUNAL IN COSMIC GLOBAL LTD. (SUPRA) AND FOUND THAT THIS DECISION IS NOT AP PLICABLE TO THE FACTS ON HAND. IT IS NOT IN DISPUTE THAT THIS TRIBUNAL I N CATEGORICAL TERM FOUND THAT LANGUAGE TRANSLATION IS NOT A TECHNICAL SERVICE. THE MUMBAI BENCH OF THIS TRIBUNAL IN IMP POWER LTD. (SU PRA) FOUND THAT EVEN THE LEGAL SERVICE RENDERED FROM ABROAD WAS NOT TAXABLE IN INDIA WITHOUT PERMANENT ESTABLISHMENT IN INDIA. TH E CIT(APPEALS) WITHOUT CONSIDERING THESE DECISIONS, HAS SIMPLY REF ERRED TO SOME OF THE PROVISIONS WHICH ARE NOT CONNECTED WITH THE PRE SENT CASE AND DISTINGUISHED THE CASE OF COSMIC GLOBAL LTD. (SUPRA ) WITHOUT RECORDING ANY REASONS. IT IS A WELL SETTLED PRINCI PLE OF LAW WHEN THE AUTHORITIES, WHO ARE EXERCISING THE JUDICIAL POWER, FIND THAT A PARTICULAR JUDGMENT IS APPLICABLE OR NOT APPLICABLE , THEY ARE EXPECTED TO RECORD THE REASONING WHY IT IS APPLICAB LE / NOT APPLICABLE. 20 I.T.A. NO.2189/CHNY/17 I.T.A. NO.598/CHNY/17 19. WE HAVE CAREFULLY GONE THROUGH THE DECISION OF THIS BENCH IN COSMIC GLOBAL LTD. (SUPRA). THIS TRIBUNAL FOUND TH AT TRANSLATION OF LANGUAGE IS NOT TECHNICAL SERVICE. THE TRANSLATIO N OF A TEXT FROM ONE LANGUAGE TO ANOTHER CANNOT BE CONSIDERED TO BE TECHNICAL SERVICE AS HELD BY THIS BENCH OF THE TRIBUNAL. THE COPY EDITING, INDEXING AND DOING PROOF READING REQUIRED ONLY KNOW LEDGE IN THE LANGUAGE AND IT DOES NOT REQUIRE TO HAVE NECESSARY EXPERTISE IN THE SUBJECT MATTER OF TEXT. THEREFORE, THE CIT(APPEALS ) IS NOT CORRECT IN SAYING THAT THE SERVICES RENDERED BY THE NON-RESIDE NTS ARE TECHNICAL SERVICES. SINCE THE SERVICES RENDERED ARE NOT TECH NICAL SERVICES, THIS TRIBUNAL IS OF THE CONSIDERED OPINION THAT THE PAYMENT RECEIVED BY THE NON-RESIDENTS FROM THE ASSESSEE IS NOT TAXAB LE IN INDIA. IN IMP POWER LTD., ( SUPRA) , THE MUMBAI BENCH OF THIS TRIBUNAL FOUND THAT EVEN LEGAL FEES PAID IN U.K. IS NOT TAXABLE IN INDIA. HENCE, THERE CANNOT BE ANY DISALLOWANCE. THEREFORE, THE AS SESSEE IS NOT LIABLE TO DEDUCT TAX AS REQUIRED UNDER SECTION 195 OF THE ACT. THE APEX COURT HAS ALSO EXAMINED THIS ISSUE IN TRANSMIS SION CORPORATION OF A.P. LTD. V. CIT (1999) 239 ITR 587 AND FOUND THAT WHEN THE PAYMENT MADE TO NON-RESIDENT IS NOT TAXABL E IN INDIA, IT IS NOT NECESSARY TO DEDUCT TAX UNDER SECTION 195 OF TH E ACT. 21 I.T.A. NO.2189/CHNY/17 I.T.A. NO.598/CHNY/17 THEREFORE, THERE CANNOT BE ANY DISALLOWANCE UNDER S ECTION 40(A)(IA) OF THE ACT 20. IN VIEW OF THE ABOVE, WE ARE UNABLE TO UPHOLD T HE ORDERS OF THE CIT(APPEALS) IN RESPECT OF THE PAYMENT MADE TO NON-RESIDENTS WHO ARE IN USA AND UK. HOWEVER, IN RESPECT OF PAYM ENTS MADE TO NON-RESIDENTS AT GERMANY AND SPAIN, WE CONFIRM THE ORDER OF THE ASSESSING OFFICER NOT ON THE GROUND ON WHICH THE CI T(APPEALS) DELETED THE DISALLOWANCE BUT ON THE GROUND THAT SUC H PAYMENTS MADE BY THE ASSESSEE TO NON-RESIDENTS AT GERMANY AN D SPAIN ARE NOT LIABLE FOR TAXATION IN INDIA. IN OTHER WORDS, THE NON-RESIDENTS IN GERMANY AND SPAIN ALSO NOT RENDERED ANY TECHNICAL S ERVICE. HENCE, THE ASSESSEE IS NOT REQUIRED TO DEDUCT TAX U NDER SECTION 195 OF THE ACT. 21. THE NEXT OBJECTION OF THE REVENUE IS THAT THE A SSESSEE HAS NOT FILED CERTIFICATES IN FORM 15CA AND 15CB AS REQ UIRED. WE HAVE CAREFULLY GONE THROUGH THE PROVISIONS OF SECTION 19 5 OF THE ACT. SECTION 195(6) OF THE ACT SAYS THAT THE PERSON RESP ONSIBLE FOR PAYING TO A NON-RESIDENT ANY SUM WHETHER OR NOT CHA RGEABLE UNDER THE PROVISIONS OF INCOME-TAX ACT, SHALL FURNISH THE INFORMATION 22 I.T.A. NO.2189/CHNY/17 I.T.A. NO.598/CHNY/17 RELATING TO PAYMENT OF SUCH SUM, IN SUCH FORM AND M ANNER, AS MAY BE PRESCRIBED. RULE 37BB OF THE INCOME-TAX RULES P ROVIDES FOR FURNISHING SUCH INFORMATION IN FORM 15CA AND 15CB. SUB-SECTION (6) OF SECTION 195 OF THE ACT DOES NOT REQUIRE THE ASSESSEE TO DEDUCT TAX. WHAT IS REQUIRED IS FURNISHING INFORMA TION IN THE SPECIFIED FORM, NAMELY, FORM 15CA AND 15CB. HOWEVE R, SUB- SECTION (1) OF SECTION 195 OF THE ACT REQUIRES THE ASSESSEE TO DEDUCT TAX AT THE TIME OF CREDIT OF SUCH INCOME TO THE ACCOUNT OF THE PAYEE. THE APEX COURT IN TRANSMISSION CORPORATION OF A.P. LTD.(SUPRA) EXAMINED THIS ISSUE AND WHILE INTERPRET ING SECTION 195(1) OF THE ACT HELD THAT THE TAXPAYER IN INDIA I S LIABLE TO DEDUCT TAX IN CASE THE PAYMENT MADE TO NON-RESIDENT IS LIA BLE FOR TAXATION IN INDIA. THEREFORE, THE ASSESSEE IS REQUIRED TO DEDU CT TAX UNDER SECTION 195(1) OF THE ACT. PROVIDED THE NON-RESIDE NT RECIPIENT IS LIABLE TO PAY TAX. THE VIOLATION OF SECTION 195(6) OF THE ACT AND FAILURE TO FILE CERTIFICATES IN FORM 15CA AND 15CB IS PUNISHABLE SEPARATELY UNDER SECTION 271I OF THE ACT. THEREFOR E, AT THE BEST, FOR THE FAILURE OF THE ASSESSEE FOR FURNISHING FORM 15C A AND 15CB, THE ASSESSING OFFICER MAY INITIATE PENALTY PROCEEDING U NDER SECTION 271I OF THE ACT. HOWEVER, THERE CANNOT BE ANY DISA LLOWANCE UNDER 23 I.T.A. NO.2189/CHNY/17 I.T.A. NO.598/CHNY/17 SECTION 40(A)(IA) OF THE ACT. IN OTHER WORDS, SECT ION 195(6) OF THE ACT, WHICH REQUIRES THE ASSESSEE TO FURNISH INFORMA TION, DOES NOT REQUIRE THE ASSESSEE TO DEDUCT TAX AT THE TIME OF P AYMENT. THEREFORE, THE QUESTION OF DISALLOWANCE UNDER SECTI ON 40(A)(IA) OF THE ACT DOES NOT ARISE FOR CONSIDERATION. 22. IN VIEW OF THE ABOVE DISCUSSION, THE PAYMENT MA DE TO THE NON-RESIDENTS AT UK, USA, GERMANY AND SPAIN CANNOT BE DISALLOWED. ACCORDINGLY, THE ORDER OF THE CIT(APPE ALS) IN RESPECT OF PAYMENT MADE TO THE NON-RESIDENTS AT USA AND UK IS SET ASIDE AND THE DISALLOWANCE MADE BY THE ASSESSING OFFICER IS D ELETED. 23. IN THE RESULT, THE ASSESSEES APPEAL IN I.T.A. NO.598/CHNY/2017 IS ALLOWED. HOWEVER, THE REVENUE S APPEAL IN I.T.A. NO.2189/CHNY/2017 IS DISMISSED. ORDER PRONOUNCED IN THE COURT ON 11 TH OCTOBER, 2019 AT CHENNAI. SD/- SD/- (. !') ( . . . ) (S. JAYARAMAN) (N.R.S. GANESAN) $ / ACCOUNTANT MEMBER /JUDICIAL MEMBER /CHENNAI, 6 /DATED, THE 11 TH OCTOBER, 2019. KRI. 24 I.T.A. NO.2189/CHNY/17 I.T.A. NO.598/CHNY/17 . ,178 98(1 /COPY TO: 1. '01 /ASSESSEE 2. ASSESSING OFFICER 3. 2 :1 () /CIT(A), PUDUCHERRY 4. PRINCIPAL CIT, PUDUCHERRY 5. 8; ,1 /DR 6. ' < /GF.