DCIT, CHENNAI V. Mainetti India Pvt. Ltd., CHENNAI

ITA 616/CHNY/2015

• Counselvise Citation: 61621714 RSA 2015
• Duration Of Justice: 3 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-06-2015
• Appeal Filed By: Department
• Bench Allotted: D
• Next Hearing Date: 22-08-2016
• Assessment Year: 2010-2011
• Appeal Filed On: 27-03-2015
• Court: TRIBUNAL
• Department Lawyers: JOE SEBASTIAN
• Assessee Lawyers: T BANUSEKAR
• Keywords: Services rendered outside India

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL D BENCH : CHENNAI . . . , . !' , # $ % [ BEFORE SHRI N.R.S. GANESAN, JUDICIAL MEMBER AND SHRI A. MOHAN ALANKAMONY, ACCOUNTANT MEMBER ] ./ I.T.A.NO.616/MDS/2015 / ASSESSMENT YEAR : 2010-11 THE DY. COMMISSIONER OF INCOME-TAX CORPORATE CIRCLE 4(1) CHENNAI VS. M/S MAINETTI INDIA PVT. LTD 3 RD FLOOR, FLORIDA TOWERS NO.138/30, NELSON MANICKAM ROAD CHENNAI - 29 [PAN AAACM 6894 M] ( &' / APPELLANT) ( ()&' /RESPONDENT) / APPELLANT BY : SHRI JOE SEBASTIAN, CIT /RESPONDENT BY : SHRI T. BANUSEKAR, CA / DATE OF HEARING : 28 - 0 5 - 2015 ! / DATE OF PRONOUNCEMENT : 30 - 0 6 - 2015 / O R D E R PER N.R.S.GANESAN, JUDICIAL MEMBER THIS APPEAL OF THE REVENUE IS DIRECTED AGAINST THE ORDER OF THE ASSESSING OFFICER CONSEQUENT TO THE DIRECTION OF THE DISPUTE RESOLUTION PANEL(DRP) AND PERTAINS TO ASSESSMENT YE AR 2010-11. 2. THE FIRST ISSUE ARISES FOR CONSIDERATION IS DISALLO WANCE OF ` 68,21,341/- U/S 40(A)(I) OF THE ACT. ITA NO.616/15 :- 2 -: 3. SHRI JOE SEBASTIAN, LD. DEPARTMENTAL REPRESENTATIVE SUBMITTED THAT THE ASSESSING OFFICER DISALLOWED PAY MENT OF ` 68,32,341/- TOWARDS EXPORT COMMISSION U/S 40(A)(I) OF THE ACT. HOWEVER, THE DRP FOUND THAT THIS TRIBUNAL IN THE A SSESSEES OWN CASE FOR THE ASSESSMENT YEAR 2008-09 DIRECTED THE ASSESS ING OFFICER TO ALLOW THE CLAIM OF THE ASSESSEE. BY FOLLOWING THE ORDER OF THIS TRIBUNAL, THE DRP ALLOWED THE CLAIM OF THE ASSESSE E AND CONSEQUENTLY TO THAT EXTENT THE ASSESSING OFFICER HAS ALSO ALLOW ED THE CLAIM. ACCORDING TO THE LD. DR, THE PAYMENT WAS MADE FOR T HE PURPOSE OF MANAGERIAL SERVICE RENDERED BY AES OUTSIDE THE COUN TRY, THEREFORE, THE ASSESSEE IS EXPECTED TO DEDUCT TDS WHILE MAKING THE PAYMENT. 4. ON THE CONTRARY, SHRI T. BANUSEKAR, LD. REPRESENTAT IVE FOR THE ASSESSEE SUBMITTED THAT THE ASSESSEE HAS PAID COMMISSION FOR THE SERVICES RENDERED BY NON-RESIDENT OUTSIDE INDIA . THEREFORE, THE ASSESSEE IS NOT EXPECTED TO DEDUCT TAX U/S 195J OF THE ACT. THE LD. COUNSEL PLACED HIS RELIANCE ON THE JUDGMENT OF THE APEX COURT IN GE INDIA TECHNOLOGY CENTRE (P) LTD VS CIT [2010] 327 I TR 456. THE LD. REPRESENTATIVE SUBMITTED THAT FOR THE ASSESSMENT YE AR 2008-09, THIS TRIBUNAL IN I.T.A.NO.2074/MDS/2012 BY AN ORDER DATE D 23.4.2013 ON IDENTICAL CIRCUMSTANCES, ALLOWED THE CLAIM OF THE ASSESSEE. THE LD. REPRESENTATIVE SUBMITTED THAT A COPY OF THIS ORDER IS AVAILABLE AT PAGES 78 TO 90 OF THE PAPER BOOK. THE DRP BY FOLLOWING T HE ORDER OF THIS ITA NO.616/15 :- 3 -: TRIBUNAL DIRECTED THE ASSESSING OFFICER TO ALLOW TH E CLAIM, THEREFORE, THE REVENUE CANNOT HAVE ANY GRIEVANCE AT ALL. 5. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS ON EITHER SIDE AND ALSO PERUSED THE MATERIAL AVAILABLE ON RECORD. AS RIGHTLY POINTED OUT BY THE LD. DR AND THE LD. REPRESENTATIVE, THIS TRIB UNAL IN THE ASSESSEES OWN CASE FOR THE ASSESSMENT YEAR 2008-09 EXAMINED THE ISSUE IN DETAIL AND FOUND THAT WHAT WAS PAID BY THE ASSESSEE WAS EXPORT COMMISSION FOR THE SERVICES RENDERED OUTSIDE INDIA THEREFORE, IT IS NOT LIABLE FOR TAXATION IN INDIA U/S 195J OF TH E ACT. THIS TRIBUNAL FOUND THAT THE ASSESSEE NEED NOT DEDUCT TAX IN VIE W OF THE JUDGMENT OF THE HON'BLE APEX COURT IN GE INDIA TECHNOLOGY CE NTRE (P) LTD (SUPRA). SINCE THE FACTS ARE IDENTICAL AND THE NAT URE OF PAYMENT IS ALSO NOT IN DISPUTE ,THIS TRIBUNAL IS OF THE CONSIDERED OPINION THAT THE COMMISSION PAID TO THE NON-RESIDENTS FOR THE SERVIC ES RENDERED OUTSIDE INDIA IS NOT TAXABLE IN INDIA, THEREFORE, THERE CAN NOT BE ANY DISALLOWANCE. THEREFORE, THIS TRIBUNAL DO NOT FIND ANY INFIRMITY IN THE ORDER OF THE LOWER AUTHORITY ON THIS ISSUE AND THE SAME IS CONFIRMED. 6. THE NEXT ISSUE ARISES FOR CONSIDERATION IS EXCLUSIO N OF FREIGHT AND TELECOMMUNICATION CHARGES FROM TOTAL TURNOVER F OR THE PURPOSE OF DEDUCTION U/S 10A OF THE ACT. ITA NO.616/15 :- 4 -: 7. THE LD. DR SUBMITTED THAT THE DRP , BY FOLLOWING TH E ORDER OF THE SPECIAL BENCH OF THIS TRIBUNAL IN ITO VS SAK SO FT LTD 30 SOT 55, DIRECTED THE ASSESSING OFFICER TO ALLOW THE CLAIM O F THE ASSESSEE. THE LD. DR SUBMITTED THAT THE DEPARTMENT HAS FILED APPE AL AGAINST THE ORDER OF THE SPECIAL BENCH OF THIS TRIBUNAL AND THE SAME IS PENDING BEFORE THE HON'BLE MADRAS HIGH COURT. 8. WE HEARD SHRI T. BANUSEKAR ALSO. 9. IT IS NOT IN DISPUTE THAT THE FREIGHT AND TELECOMMU NICATION CHARGES ARE EXCLUDED FROM THE EXPORT TURNOVER. ONC E THE FREIGHT AND TELECOMMUNICATION CHARGES ARE EXCLUDED FROM THE EXP ORT TURNOVER, THE SAME HAS ALSO TO BE EXCLUDED FROM THE TOTAL TURNOVE R ALSO. IN OTHER WORDS, THE DENOMINATOR AND NUMERATOR SHALL BE OF TH E SAME FACTOR. THEREFORE, THIS TRIBUNAL DO NOT FIND ANY INFIRMITY IN THE ORDER OF THE LOWER AUTHORITY. ACCORDINGLY, THE SAME IS CONFIRME D. 10. IN THE RESULT, THE APPEAL OF THE REVENUE STANDS DI SMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 30 TH OF JUNE, 2015, AT CHENNAI. SD/- SD/- ( . !' ) (A. MOHAN ALANKAMONY) # / ACCOUNTANT MEMBER ( . . . ' ) (N.R.S. GANESAN) / JUDICIAL MEMBER #$ / CHENNAI %& / DATED: 30 TH JUNE, 2015 RD ITA NO.616/15 :- 5 -: &' ()*) / COPY TO: 1 . / APPELLANT 3. +,' / CIT(A) 5. )-. / / DR 2. / RESPONDENT 4. + / CIT 6. .01 / GF