Astt. Commissioner of Income Tax (TDS), Kanpur V. M/s Lohia Corp. Ltd., Kanpur

ITA 621/LKW/2015

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 4740 (ITAT-LUCKNOW)
• Duration Of Justice: 4 month(s) 24 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 04-02-2016
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 02-02-2016
• Assessment Year: 2012-2013
• Appeal Filed On: 10-09-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: SUDINDRA JAIN
• Keywords: Question of law
• Section: 201(1)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL LUCKNOW BENCH A , LUCKNOW BEFORE SHRI S UNIL KUMAR YADAV , JUDICIAL MEMBER AND SHRI. A. K. GARODIA , ACCOUNTANT MEMBER ITA NO. 621 & 622/LKW/2015 ASSESSMENT YEAR: 2012 - 13 & 2013 - 14 ASSTT. CIT (TDS) KANPUR V. M/S LOHIA CORP. LTD. D - 3/A, PANKI INDUSTRIAL AREA KANPUR T AN /PAN : KNPL0108D (APP ELL ANT) (RESPONDENT) APP ELL ANT BY: SHRI. AMIT NIGAM, D.R. RESPONDENT BY: SHRI. SUDINDRA JAIN, C.A. DATE OF HEARING: 02 02 201 6 DATE OF PRONOUNCEMENT: 04 02 201 6 O R D E R PER SUNIL KUMAR YADAV: THESE APPEALS ARE PREFERRED BY THE REVENUE AGAINST THE RESPECTIVE ORDERS OF THE LD. COMMISSIONER OF INCOME TAX ON COMMON GROUNDS. FOR THE SAKE OF REFERENCE, WE EXTRACT THE GROUNDS RAISED IN I.T.A. NO. 621/LKW/2015 AS UNDER: - 1 . L D. CIT(A) - II, KANPUR HAS ERRED IN LAW AND ON FACTS IN DELETING THE DEMAND RAISED ON ACCOUNT OF NOT MAKING T DS ON THE PAYMENTS MADE TO FOREIGN AGENTS FOR ACQUIRING MANAGERIAL ACUMEN /EXPERTISE. 2 . THE LD. CIT (A) HAS ERRED IN LAW AND ON FACTS IN DELETING THE D EMAND RAISED B Y T HE AO ON ACCOUNT OF NOT MAKING T DS ON THE PAYMENTS MADE TO FOREIGN AGENTS FOR ACQUIRING MANAGERIA L ACUMEN /EXPERTISE IGNORING THE FACT THAT THERE WAS MANDATORY : - 2 - : LIABILITY ON PART OF ASSESSEE U/S 195 OF THE IT. ACT, 1961 R.W.S. 9(1)(VII) TO DEDUCT TAX AT SOURCE. 2 . DURING THE COURSE OF HEARING, THE LD. COUNSEL FOR THE ASSESSEE HAS INVITED OUR ATTENTION THAT THE ISSUE OF DEDUCTION OF TAX AT SOURCE WAS ADJUDICATED BY THE TRIBUNAL IN THE ASSESSEES OWN CASE I.E. ACIT VS. LOHIA STARLINGER LTD. REP ORTED AT [2014] 49 TAXMANN.COM 87 (LUCKNOW), IN WHICH THE TRIBUNAL HAS HELD THAT TDS IS NOT REQUIRED TO BE DEDUCTED ON THE FOREIGN COMMISSION PAYMENT. THE COPY OF THE ORDER OF THE TRIBUNAL IS PLACED AT PAGES 24 TO 49 OF THE COMPILATION OF THE ASSESSEE. 3 . THE LD. COUNSEL FOR THE ASSESSEE HAS ALSO INVITED OUR ATTENTION TO THE JUDGMENT OF THE HONBLE JURISDICTIONAL HIGH COURT AND THE SUBSTANTIAL QUESTION OF LAW RAISED IN APPEAL BY THE DEPARTMENT WITH THE SUBMISSION THAT THOUGH THE DEPARTMENT HAS RAISED SUBST ANTIAL QUESTION OF LAW WITH REGARD TO THE DISALLOWANCE OF PAYMENT OF COMMISSION TO M/S LOHIA EUROPE GMBH, GERMANY ON ACCOUNT OF NON - DEDUCTION OF TDS, BUT THIS QUESTION OF LAW WAS NOT ADMITTED BY THE HONBLE HIGH COURT AND THE ORDER OF THE TRIBUNAL WAS CONF IRMED VIDE ORDER DATED 22.4.2015. THE HONBLE HIGH COURT HAS ADMITTED THE QUESTION WITH REGARD TO THE BENEFIT OF TOP UPS OF KEYMAN I NSURANCE P OLICY. COPY OF THE JUDGMENT OF THE HONBLE HIGH COURT IS ALSO PLACED AT PAGES 53 TO 55 OF THE COMPILATION OF THE ASSESSEE. 4 . THE LD. D.R. DID NOT DISPUTE THESE FACTS. 5 . HAVING CAREFULLY EXAMINED THE ORDERS OF THE LOWER AUTHORITIES, THE ORDER OF THE TRIBUNAL FOR ASSESSMENT YEARS 2006 - 07 TO 2010 - 11 AND THE JUDGMENT OF THE HONBLE JURISDICTIONAL HIGH COURT IN THE LIGHT OF THE RIVAL SUBMISSIONS, WE FIND THAT THE ISSUE OF DISALLOWANCE UNDER SECTION 40(A)(IA) OF THE INCOME TAX ACT, 1961 (HEREINAFTER CALLED IN SHORT THE ACT') ON ACCOUNT OF NON - DEDUCTION OF TDS ON PAYMENT OF COMMISSION TO : - 3 - : ITS AGENT LOCATED ABROAD WAS RAISED BE FORE THE TRIBUNAL AND THE TRIBUNAL HAS TAKEN A VIEW THAT THE ASSESSEE IS NOT REQUIRED TO DEDUCT TDS ON SUCH COMMISSION PAYMENT, THEREFORE, NO DISALLOWANCE UNDER SECTION 40(A)(IA) OF THE ACT CAN BE MADE. THIS VIEW OF THE TRIBUNAL WAS APPROVED BY THE HONBL E JURISDICTIONAL HIGH COURT. IN THE LIGHT OF THESE FACTS THAT ONCE IT IS HELD THAT THE ASSESSEE IS NOT REQUIRED TO DEDUCT TDS, THERE IS NO QUESTION O F HOLDING THE ASSESSEE TO BE IN DEFAULT UNDER SECTION 201(1) AND CHARGEABILITY OF INTEREST UNDER SECTION 2 01(1A) OF THE ACT. THEREFORE, WE ARE OF THE VIEW THAT THE LD. CIT(A) HAS PROPERLY ADJUDICATED THE ISSUE IN THE LIGHT OF THE AFORESAID ORDER OF THE TRIBUNAL. ACCORDINGLY, WE CONFIRM THE ORDER OF THE LD. CIT(A). 6 . IN THE RESULT, APPEALS OF THE REVENUE ARE DI SMISSED. ORDER WAS PRONOUNCED IN THE OPEN COURT ON THE DATE MENT I ONED ON THE CAPTION ED PAGE. SD/ - SD/ - [ A. K. GARODIA ] [ S UNIL KUMAR Y ADAV ] ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 4 TH 1 . APPELLANT FEBR UARY, 2016 JJ: 0102 COPY FORWARDED TO: 2 . RESPONDE NT 3 . CIT(A) 4 . CIT 5 . DR ASSISTANT REGISTRAR