ASST CIT CIR 3(2), MUMBAI V. BOURBON OFFSHORE, MUMBAI

ITA 6848/MUM/2012

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 79296 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 8 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-07-2014
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 08-07-2014
• Assessment Year: 2009-2010
• Appeal Filed On: 08-11-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: NE ERAJ AGARWALA
• Section: 143(3); 234B

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES B MUMBAI . . , , BEFORE SHRI I.P. BANSAL, JUDICIAL MEMBER /AND SHRI SANJAY ARORA, ACCOUNTANT MEMBER ITA NO.6848/MUM/2012, A.Y. 2009-10 THE DY. DIRECTOR OF INCOME TAX (IT)- 3(2), SCINDIA HOUSE, BALLARD PIER, N.M.ROAD, MUMBAI 400038 (APPELLANT ) VS. M/S. BOURBON OFFSHORE, M/S. NANGIA & ASSOCIATES, THE SUMMIT, LEVEL 2, UNIT NO.210, WESTERN EXPRESS HIGHWAY, VILE PARLE (E), MUMBAI PAN:AADCB 7150J (RESPONDENT) APPELLANT BY : SHRI RAVINDER SINDHU RESPONDENT BY : SHRI NE ERAJ AGARWALA DATE OF HEARING : 08/07/20 14 DATE OF PRONOUNCEMENT : 08/07/2014 ORDER PER I.P.BANSAL, J.M, THIS IS AN APPEAL FILED BY THE REVENUE AND IT IS DIRECTED AGAINST THE ORDER PASSED BY LD. CIT(A)-10, MUMBAI DATED 26/7/2012 FOR ASSESSMENT YEAR 2009-10. GROUNDS OF APPEAL READ AS UNDER: 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE CIT(APPEALS) ERRED IN DELETING THE INTEREST LEVIED U/S. 234B AND 234C IGNORING THE FACT THAT THE INTEREST IS CHARGEABLE FOR NON PAYMENT OF TAXES ON THE DUE DATE. 2. THE APPELLANT PRAYS THAT THE ORDER OF THE LD. CI T(APPEALS) ON THE ABOVE GROUNDS BE SET ASIDE AND THAT OF THE ASSESSING OFFICER REST ORED. 2. THE ASSESSEE IS A NON-RESIDENT ENGAGED IN THE B USINESS OF PROVIDING SERVICES AND FACILITIES IN CONNECTION WITH THE EXPL ORATION, EXPLOITATION AND ITA NO.6848/MUM/2012, A.Y. 2009-10 2 PRODUCTION OF MINERAL OIL IN INDIA. THE ASSESSEE H AS FILED ITS RETURN OF INCOME DECLARING TOTAL INCOME OF RS.5,86,48,770/- ON 28/9 /2009. IT WAS ASSESSED AT AN INCOME OF RS.7,75,16,075/- BY WAY OF ASSESSMENT ORD ER PASSED UNDER SECTION 143(3) R.W.S. 144C(3) OF THE INCOME TAX ACT, 1961 ( THE ACT) AND IN THE PRESENT CASE REVENUE OF RS.18,86,73,004/- ON ACCOUNT OF MOB ILIZATION FOR THE ACTIVITIES CARRIED OUTSIDE INDIAN TERRITORIAL WATERS TO BE CH ARGEABLE TO TAX UNDER SECTION 44BB OF THE ACT. THE ENTIRE REVENUE RECEIVED BY TH E ASSESSEE WAS LIABLE FOR DEDUCTION OF TAX. HOWEVER, IN ABSENCE OF TDS CREDI T THE AO LEVIED INTEREST UNDER SECTION 234B AND 234C OF THE ACT, WHICH WAS AMOUNTI NG TO RS.1,14,57,264/- AND RS.12,50,751/- RESPECTIVELY. AGAINST SUCH LEVY I T WAS PLEADED BEFORE LD. CIT(A) THAT NO INTEREST WAS CHARGEABLE IN VIEW OF SEVERAL JUDICIAL PRONOUNCEMENTS AS ENTIRE RECEIPTS WERE LIABLE FOR DEDUCTION OF TAX AN D REFERENCE WAS MADE TO THE DECISION OF HONBLE BOMBAY HIGH COURT IN THE CASE O F DIRECTOR OF INCOME TAX (IT) VS. NGC NETWORTH ASIA LLC , 313 ITR 187 (BOM). ACC EPTING THE SUBMISSIONS OF THE ASSESSEE LD. CIT(A) HAS HELD THAT NO INTEREST U NDER SECTION 234B & 234C OF THE ACT WAS LEVIABLE AND THE SAME WAS DELETED BY LD . CIT(A). THE REVENUE IS AGGRIEVED WITH THE SAID ORDER OF LD. CIT(A) AND HAS FILED AFOREMENTIONED GROUNDS OF APPEAL. 3. LD. DR RELYING UPON THE GROUNDS OF APPEAL SUBMIT TED THAT LD. CIT(A) HAS WRONGLY DELETED THE INTEREST LEVIED UNDER SECTION 2 34B & 234C OF THE ACT. 4. AS AGAINST SUCH PLEADING OF LD. DR, WRITTEN SUB MISSION HAS BEEN FILED ON BEHALF OF THE ASSESSEE, WHEREIN IT HAS BEEN MENTION ED THAT NO INTEREST WAS LEVIABLE UNDER SECTION 234B & 234C OF THE ACT IN AC CORDANCE WITH THE DECISION OF HONBLE BOMBAY HIGH COURT IN THE CASE OF DIRECTOR OF INCOME TAX (IT) VS. NGC NETWORTH ASIA LLC (SUPRA). IN THE ALTERNATIVE, IT WAS SUBMITTED THAT AS TDS CREDIT WAS NOT GIVEN ORIGINALLY, THE REMAINING DEM AND OF TAX AFTER GRANT OF BENEFIT OF DEDUCTION ON TAX IS ONLY A SUM OF RS.23,189/-. TO SUPPORT SUCH CONTENTION ORDER PASSED BY AO UNDER SECTION 154, WHICH IS DA TED 22/5/2012 IS ENCLOSED. ACCORDING TO SAID ORDER TDS CREDIT OF RS.3,27,11,85 0/- HAS BEEN GRANTED TO THE ITA NO.6848/MUM/2012, A.Y. 2009-10 3 ASSESSEE. ACCORDING TO DEMAND NOTICE ENCLOSED WITH THE SAID ORDER THE TOTAL TAX DEMAND WAS RS.3,27,35,039/- AND AFTER GRANT OF TDS CREDIT OF RS.3,27,11,850/- NET DEMAND REMAINS ONLY TO THE EXTENT OF RS.23,189/ -. IT WAS SUBMITTED THAT INTEREST, IF HELD TO BE LEVIABLE, THEN THE SAME SHOULD BE RESTRICTED TO WHAT IS LIABLE TO BE PAID FOR NON-PAYMENT OF RS.23,189/-. 5. WE HAVE HEARD BOTH THE PARTIES AND THEIR CONTENT IONS HAVE CAREFULLY BEEN CONSIDERED. AFTER CAREFUL CONSIDERATION, WE FIND NO INFIRMITY IN THE RELIEF GRANTED BY LD. CIT(A). THE ASSESSEE IS NON-RESIDENT AND IT S ENTIRE INCOME IS SUBJECT TO DEDUCTION OF TAX. ACCORDING TO AFOREMENTIONED DECI SION OF HONBLE BOMBAY HIGH COURT IN THE CASE OF DIRECTOR OF INCOME TAX (IT) VS . NGC NETWORK ASIA LLC (SUPRA), IT HAS BEEN HELD THAT WHEN A DUTY CAST ON THE PAYER TO DEDUCT TAX AT SOURCE, ON THE FAILURE OF THE PAYER TO DO SO, NO IN TEREST CAN BE IMPOSED ON THE PAYEE ASSESSEE UNDER SECTION 234B . FOR HOLDING SO THEIR LORDSHIPS HAVE CONCURRED WITH THE DECISION OF HONBLE UTTARANCHAL HIGH COURT IN THE CASE OF CIT VS. SEDCO FOREX INTERNATIONAL DRILLING CO. LTD. 26 4 ITR 320. THEREFORE, WE DECLINE TO INTERFERE IN THE ORDER PASSED BY LD. CIT(A) AND DISMISS THE APPEAL FILED BY THE REVENUE. 6. IN THE RESULT, APPEAL OF THE REVENUE IS DISMISSE D. ORDER PRONOUNCED IN THE OPEN COURT ON 08/07/2014 ! ' #$ % &'( 08/07/2014 ' ) SD/- SD/- ( /SANJAY ARORA ) ( . . / I.P. BANSAL ) / ACCOUNTANT MEMBER / JUDICIAL MEMBER MUMBAI; &' DATED 08/07/2014 ITA NO.6848/MUM/2012, A.Y. 2009-10 4 ! ! ! ! ' '' ' *+, *+, *+, *+, -,$+ -,$+ -,$+ -,$+ / COPY OF THE ORDER FORWARDED TO : 1. ./ / THE APPELLANT 2. *0./ / THE RESPONDENT. 3. 1 ( ) / THE CIT(A)- 4. 1 / CIT 5. ,2) *+' , , / DR, ITAT, MUMBAI 6. )3 4 / GUARD FILE. !' !' !' !' / BY ORDER, 0,+ *+ //TRUE COPY// 5 55 5 / 6 6 6 6 (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI . ' . ./ VM , SR. PS