SANAA SYNTEX P.LTD, MUMBAI V. ASST CIT 4(3)(OSD), MUMBAI

ITA 6649/MUM/2013

• Counselvise Citation: [2019] 112 COUNSELVISE.COM (IT) 3672 (ITAT-MUMBAI)
• Duration Of Justice: 5 year(s) 11 month(s) 17 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 01-11-2019
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: E
• Assessment Year: 2010-2011
• Appeal Filed On: 14-11-2013
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Keywords: Services rendered outside India; TDS
• Section: 40(a)(ia)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, BENCH E, M UMBAI BEFORE SHRI PAWAN SINGH, JUDICIAL MEMBER AND SHRI RAJESH KUMAR, ACCOUNTANT MEMBER ITA NO. 6649/MUM/2013 FOR ASSESSMENT YEAR: 2010-11 SANAA SYNTEX PVT. LTD. 135/B, SANJAY BUILDING, MITTAL INDUSTRIAL ESTATE, MAROL, ANDHERI (EAST), MUMBAI. PAN: AAACS6150L VS. ACIT 4(3), AAYAKAR BHAVAN, M.K. ROAD, MUMBAI-400020. (APPELLANT) (RESPONDENT) ASSESSEE BY : NONE REVENUE BY : SHRI AMIT PRAT AP SINGH (DR) DATE OF HEARING : 30.09.2009 DATE OF PRONOUNCEMENT : 01.11.2019 ORDER UNDER SECTION 254(1) OF INCOME-TAX ACT PER PAWAN SINGH, JM: 1. THIS APPEAL BY ASSESSEE IS DIRECTED AGAINST THE ORD ER OF LD. CIT(A)-8, MUMBAI DATED 08.08.2013 FOR ASSESSMENT YEAR 2010-11. THE A SSESSEE HAS FILED THE FOLLOWING GROUND OF APPEAL: THE LD. ASSESSING OFFICER ERRED IN DISALLOWING RS. 17,40,439/- U/S. 40(A)(IA) AS EXPENDITURE INCURRED IN RELATION TO SERVICES GIV EN BY FOREIGN NON RESIDENT OUT OF INDIA. 2. THIS APPEAL WAS INITIALLY ADJUDICATED VIDE ORDER DA TED 08.11.2016, HOWEVER, THE ORDER WAS RECALLED ON MISCELLANEOUS APPLICATION (MA ) FILED BY ASSESSEE VIDE ORDER DATED 05.01.2018. AFTER RECALLING THE ORDER, THE APPEAL WAS FIXED FOR HEARING AFRESH. THE NOTICE OF HEARING OF APPEAL WAS SENT THROUGH REGISTERED POST FOR TWO OCCASIONS. HOWEVER, THE NOTICES SENT THROUG H REGISTERED POST RETURNED 2 ITA NO. 6649 MUM 2013-SANAA SYNTEX PVT. LTD. BY POSTAL AUTHORITIES WITH THE REMARK UNCLAIMED. THUS, WE LEFT NO OPTION EXCEPT TO DECIDE THE APPEAL ON THE BASIS OF MATERIA L AVAILABLE ON RECORD. 3. BRIEF FACTS OF THE CASE ARE THAT ASSESSEE IS A COMP ANY ENGAGED IN MANUFACTURING OF GREY CLOTH FABRICS AND EXPORTER OF FINISHED GOOD S FILED ITS RETURN OF INCOME FOR RELEVANT A.Y. ON 12.10.2010 DECLARING INCOME OF RS. 85,74,820/-. THE CASE WAS SELECTED FOR SCRUTINY. DURING THE ASSESSMENT, T HE ASSESSING OFFICER NOTED THAT THE ASSESSEE HAS DEBITED AN AMOUNT OF RS. 17,4 0,439/- IN PROFIT & LOSS A/C AS EXPORT SALES COMMISSION. THE ASSESSEE WAS ASKED TO EXPLAIN WHETHER TDS WAS DEDUCTED. NO RESPONSE FROM ASSESSEE, IF ANY TAX WAS DEDUCTED ON SOURCE OF SUCH PAYMENT. THE ASSESSING OFFICER FURTHER NOTED T HAT THE SIMILAR ADDITION WAS MADE IN EARLIER YEARS I.E. A.Y. 2009-10. ACCORD INGLY, THE ASSESSING OFFICER DISALLOWED THE SAME. ON APPEAL BEFORE THE L D. CIT(A), THE ASSESSEE IN ITS STATEMENT OF FACT STATED THAT CERTAIN PAYMENTS TOWARDS COMMISSION IS DIRECTED BY THE EXPORT CLIENTS ON THE TERM AGREED T HAT SERVICES RENDERED BY THEIR AGENTS, IN THEIR RESPECTIVE COUNTRY SHALL BE BEAR B Y THE ASSESSEE AND THE SAME SHALL BE DEDUCTED BEFORE REMITTANCE TO BE MADE TO T HE ASSESSEE IN INDIA TOWARDS EXPORT BILLS. THE SAID EXPENSES WERE DEBITED AS EXP ORT COMMISSION, AS THE INCOME HAS BEEN ACCRUED ARE FOR THE SERVICES RENDER ED OUT OF INDIA AS WELL AS RECEIPTS ARE NOT TAXABLE IN INDIA, THUS, THE TDS IS NOT APPLICABLE. THE ASSESSEE ALSO RELIED UPON THE DECISION OF HYDERABAD TRIBUNAL IN DCIT VS. DIVIS LABORATORIES LTD. ITA NO. 601 TO 604/HYD/2009 AND E ON TECHNOLOGY (P.) LTD. VS. DCIT [2011] TAXMANN.COM 53 (DEL.). THE LD. CIT( A) NOT ACCEPTED THE SUBMISSION OF ASSESSEE AND HELD THAT ON SIMILAR ISS UE HE HAS DISMISSED THE 3 ITA NO. 6649 MUM 2013-SANAA SYNTEX PVT. LTD. APPEAL FOR A.Y. 2009-10. AGGRIEVED BY THE ORDER OF LD. CIT(A), THE ASSESSEE HAS FILED THE PRESENT APPEAL BEFORE US. 4. NONE APPEARED ON BEHALF OF ASSESSEE AS WE HAVE NOTE D ABOVE, THEREFORE, WE LEFT NO OPTION EXCEPT TO HEAR THE SUBMISSION OF LD. DR F OR THE REVENUE AND TO DECIDE THE APPEAL ON THE BASIS OF MATERIAL AVAILABLE ON RE CORD. THE LD. DR FOR THE REVENUE SUPPORTED THE ORDER OF LOWER AUTHORITIES. T HE LD. DR FURTHER SUBMITS THAT THE ASSESSEE FAILED TO DEMONSTRATE, IF ANY, PA YMENT ON ACCOUNT OF COMMISSION WAS PAID BY ASSESSEE OUT OF INDIA. IN AB SENCE OF ANY EVIDENCE, THE LOWER AUTHORITY WAS JUSTIFIED IN DISALLOWING THE CO MMISSION PAYMENT MADE WITHOUT TDS. THE LD. DR FOR THE REVENUE PRAYED FOR DISMISSAL OF THE APPEAL. 5. WE HAVE CONSIDERED THE SUBMISSION OF LD. DR AND PER USED THE RECORD CAREFULLY. WE HAVE NOTED THAT THE ASSESSEE HAS CLAIMED THAT TH E COMMISSION PAYMENT WAS MADE OUTSIDE INDIA TO A NON-RESIDENT. THE SERVICES WERE ALLEGEDLY RENDERED OUT OF INDIA AND THE RECEIPTS ARE NOT TAXABLE IN INDIA. THUS, THE PROVISIONS OF TDS ARE NOT APPLICABLE. HOWEVER, NO SUCH MATERIAL IS PL ACED ON RECORD THAT ANY SERVICES WERE RENDERED OR COMMISSION WAS PAID TO NO N-RESIDENT FOR THE SERVICES RENDERED BY THEM OUTSIDE INDIA. THIS APPEAL IS PEND ING SINCE 2013. THE ASSESSEE HAS NOT FILED EVEN A SINGLE DOCUMENT TO SU BSTANTIATE ITS CONTENTION. AS ALREADY NOTED ABOVE, THIS APPEAL WAS EARLIER DECIDE D ON 08.11.2016 ON THE BASIS OF MATERIAL AVAILABLE ON RECORD. DESPITE SEEKING TH E RECALL OF THE ORDER, THE ASSESSEE HAS NEITHER FILED ANY DOCUMENTARY EVIDENCE NOR ANY WRITTEN SUBMISSION TO SUBSTANTIATE THE GROUND OF APPEAL. MO REOVER, THE NOTICES SENT BY TRIBUNAL ARE NOT ACCEPTED AND RETURNED UNCLAIMED. T HE ASSESSEE IS A CORPORATE ENTITY AND DESPITE REPEATED NOTICES NONE IS APPEARI NG ON BEHALF OF ASSESSEE. NO 4 ITA NO. 6649 MUM 2013-SANAA SYNTEX PVT. LTD. AUTHORITY LETTER FROM THE FILING OF APPEAL IN 2013 TILL DATE OF HEARING IS PLACED ON RECORD. THERE IS NO MATERIAL ON RECORD THAT THE ASS ESSEE MADE THE PAYMENT OF COMMISSION OUTSIDE INDIA OR TO A NON-RESIDENT FOR R ENDERING SERVICE OUTSIDE INDIA. THEREFORE, WE DO NOT FIND ANY MERIT IN THE G ROUND OF APPEAL RAISED BY ASSESSEE AND THE SAME IS DISMISSED WITH COST OF RS. 10,000/-. 6. IN THE RESULT, APPEAL FILED BY ASSESSEE IS DISMISSE D. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 1 ST NOVEMBER 2019 SD/- SD/- ( RAJESH KUMAR ) (PA WAN SINGH) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI; DATED 01/11/2019 S.K.PS COPY OF THE ORDER FORWARDED TO : / BY ORDER, (ASSTT.REGISTRAR) , / ITAT, MUMBAI 1. / THE APPELLANT 2. / THE RESPONDENT. 3. / THE CIT(A), MUMBAI. 4. / CIT 5. , , / DR, ITAT, MUMBAI 6. GUARD FILE. //TRUE COPY/