NISHA C. FONSECA, MUMBAI V. INCOME TAX OFFICER(INTERNATIONAL TAXATION)-2(3)1, MUMBAI

ITA 6135/MUM/2017

• Counselvise Citation: [2018] 126 COUNSELVISE.COM (IT) 0727 (ITAT-MUMBAI)
• Duration Of Justice: 3 month(s) 10 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-01-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2010-2011
• Appeal Filed On: 06-10-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: N HEMALATHA
• Assessee Lawyers: ANAGHA GAVADE
• Section: 234B; 10

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, MUMBAI BENCH SMC, MUMBAI BEFORE SHRI D.T. GARASIA, JUDICIAL MEMBER ITA NO.6135M/2017 ASSESSMENT YEAR: 2010-11 M/S. NISHA C. FONSECA, C/O AF DSILVA, 102, TAPASYA, DSILVA WADI, OFF SAYANI RD., PRABHADEVI, MUMBAI-400 025 PAN: AAAFD0959P VS. INCOME TAX OFFICER(INTERNATIONAL TAXTAION) -2(3)(1), 1727, 17 TH FLOOR, AIR INDIA BLDG., NARIMAN POINT, MUMBAI 400 021 (APPELLANT) (RESPONDENT) PRESENT FOR: ASSESSEE BY : MS. ANAGHA GAVADE, A.R. REVENUE BY : MS. N. HEMALATHA, D.R. DATE OF HEARING : 02.01.2018 DATE OF PRONOUNCEMENT : 16.01.2018 O R D E R PER D.T. GARASIA, JUDICIAL MEMBER: THE PRESENT APPEAL HAS BEEN PREFERRED BY THE ASSESS EE AGAINST THE ORDER DATED 23.08.2017 OF THE COMMISSIONER OF I NCOME TAX (APPEALS) [HEREINAFTER REFERRED TO AS THE CIT(A)] R ELEVANT TO ASSESSMENT YEAR 2010-11. 2. THE ONLY GROUND IN THIS APPEAL IS AGAINST UPHOLD ING THE LEVY OF INTEREST UNDER SECTION 234B AND 234C OF THE ACT BY RELYING UPON THE DECISION OF HONBLE SUPREME COURT IN THE CASE OF IA N PETER MORRIS VS. ACIT DATED 29.11.2016 SLP 1196-1197/2013 WHEREI N IT IS HELD THAT INTEREST FOR DEFAULT IN PAYMENT OF ADVANCE TAX UNDER SECTION 234C. THE INTEREST FOR DEFERMENT OF ADVANCE TAX WO ULD HAVE NO ITA NO.6135M/2017 M/S. NISHA C. FONSECA 2 APPLICATION TO THE PRESENT CASE. SHORT FACTS OF TH E CASE ARE THAT THE LD. CIT(A) HAS LEVIED THE INTEREST UNDER SECTION 23 4B AND 234C ON THE GROUND THAT ASSESSEE HAD AGREEMENT WITH KUWAIT AIRWAYS WHEREIN IT IS EXPLICITLY MENTIONED THAT THE EX-EMPL OYEE SHALL BE LIABLE TO PAY HER OWN INDIVIDUAL TAXES AS PER THE A PPLICABLE LAW AND NO LIABILITY SHALL ACCRUE TO THE M/S. KUWAIT AIRWAY S CORPORATION FOR THE SAME. THE ASSESSEE WAS TO GET THE RETRENCHMENT COMPENSATION OF RS.18 LAKHS FROM M/S. KUWAIT AIRWAYS CORPORATION AN D OTHERWISE A SERVICE RENDERED ON THE BASIS OF SETTLEMENT ARRIVED AT BETWEEN ASSESSEE AND M/S. KUWAIT AIRWAYS CORPORATION AND RE CEIPT WAS ON 09.08.09. ASSESSING OFFICER (HEREINAFTER REFERRED TO AS THE AO) AND THE LD. CIT(A) TREATED THAT THE ASSESSEE IS NOT ENT ITLED FOR DEDUCTION UNDER SECTION 10 OF THE ACT AND ASSESSEE WAS NOT AL LOWING DEDUCTION UNDER SECTION 89. 3. THE LD. CIT(A) HAS CONFIRMED THE SAME BUT HE HAS ALSO LEVIED THE INTEREST UNDER SECTION 234B AND 234C. 4. I HAVE HEARD THE LD. COUNSEL AND FOUND THAT THE ISSUE IN CONTROVERSY IS COVERED BY THE DECISION OF HONBLE S UPREME COURT IN THE CASE OF IAN PETER MORRIS VS. ACIT (2016) 389 IT R 501 WHEREIN IT IS HELD AS UNDER: HELD, ALLOWING THE APPEAL, THAT AGAINST SALARY A D EDUCTION, AT THE REQUISITE RATE AT WHICH INCOME-TAX WAS TO BE PAID BY THE PERSON ENTIT LED TO RECEIVE THE SALARY, WAS REQUIRED TO BE MADE BY THE EMPLOYER FAILING WHICH T HE EMPLOYER WAS LIABLE TO PAY SIMPLE INTEREST THEREON. IN CASES WHERE THE RECEIPT WAS BY WAY OF SALARY, DEDUCTION UNDER SECTION 192 OF THE ACT WAS REQUIRED TO BE MAD E. NO QUESTION OF PAYMENT OF ADVANCE TAX UNDER PART C OF CHAPTER VII OF THE ACT COULD ARISE IN CASES OF RECEIPT BY WAY OF SALARY. IF THAT WAS SO, PART F OF CHAPTER VI I DEALING WITH INTEREST CHARGEABLE IN CERTAIN CASES (SECTION 234B INTEREST FOR DEFAU LTS IN PAYMENT OF ADVANCE TAX AND ITA NO.6135M/2017 M/S. NISHA C. FONSECA 3 SECTION 234C INTEREST FOR DEFERMENT OF ADVANCE TA X) WOULD HAVE NO APPLICATION TO THE PRESENT SITUATION IN VIEW OF THE FINALITY THAT HAD TO BE ATTACHED TO THE DECISION THAT WHAT WAS RECEIVED BY THE ASSESSEE UNDER THE NO N-COMPETE AGREEMENT WAS BY WAY OF SALARY. 5. RESPECTFULLY FOLLOWING THE SAME, WE ALLOW THE AP PEAL OF THE ASSESSEE. ORDER PRONOUNCED IN THE OPEN COURT ON 16.01.2018. SD/- (D.T. GARASIA) JUDICIAL MEMB ER MUMBAI, DATED: 16.01.2018. * KISHORE, SR. P.S. COPY TO: THE APPELLANT THE RESPONDENT THE CIT, CONCERNED, MUMBAI THE CIT (A) CONCERNED, MUMBAI THE DR CONCERNED BENCH //TRUE COPY// [ BY ORD ER DY/ASSTT. REGISTRAR, ITAT, MUMBAI.