MORGAN STANLEY INTERNATIONAL INCORPORATED, MUMBAI V. DDIT (IT) 4(1), MUMBAI

ITA 6882/MUM/2011

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 84551 (ITAT-MUMBAI)
• Duration Of Justice: 3 year(s) 2 month(s) 8 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-12-2014
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: L
• Next Hearing Date: 19-09-2014
• Assessment Year: misc
• Appeal Filed On: 10-10-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: AJAY KUMAR SRIVASTAVA
• Assessee Lawyers: A V SONDE
• Keywords: Business income; Salary income; Double taxation relief; Permanent establishment; Advance ruling; Wholly owned subsidiary
• Section: 143(3); 11

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL L BENCH, MUMBAI BEFORE S/SHRI B.R.BASKARAN (AM) AND AMIT SHUKLA, (JM) . . , , ./I.T.A. NO.6882/MUM/2011 ( / ASSESSMENT YEAR :2005-06) MORGAN STANLEY INTERNATIONAL INCORPORATED C/O BSR&CO. CHARTERED ACCOUNTS, LODHA EXCELUS, 1 ST FLOOR, APOLLO MILLS COMPOUND, N M JOSHI MARG, MAHALAKSHMI, MUMBAI-400011. / VS. DY. DIRECTOR OF INCOME TAX (IT)(4(1), SCINDIA HOUSE, BALLARD ESTATE, MUMBAI-400038 ( ! / APPELLANT) .. ( '# ! / RESPONDENT) ./ $% ./PAN/GIR NO. : AAECM1492R ! & / ASSESSEES BY SHRI A.V.SONDE '# ! ' & /REVENUE BY SHRI AJAYKUMAR SRIVASTAVA ( ' ) / DATE OF HEARING : 19.9.2014 *+ ' ) /DATE OF PRONOUNCEMENT : 18.12.2014 / O R D E R PER AMIT SHUKLA, (JM) THE AFORESAID APPEAL HAS BEEN PREFERRED BY THE ASS ESSEE AGAINST ORDER DATED 29.7.2011, PASSED BY THE LD. CI T(A)-11, MUMBAI FOR THE QUANTUM OF ASSESSMENT PASSED U/S 143(3) FOR THE ASSESSMENT YEAR 2005-06 ON THE FOLLOWING GROUNDS : 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE, THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS) ['THE CIT (A)'] I.T.A. NO.6882/MUM/2011 2 HAS LEGALLY ERRED IN CONFIRMING THE ACTION OF THE L EARNED ASSESSING OFFICER ('THE AO') OF HOLDING THAT THE AP PELLANT HAS RENDERED SERVICES TO THE INDIAN COMPANIES VIZ. MORG AN STANLEY ADVANTAGE SERVICES PRIVATE LIMITED -AND MSIM GLOBAL SUPPORT AND TECHNOLOGY SERVICES PRIVATE LIMITED. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E, THE LEARNED THE CIT (A) HAS LEGALLY ERRED IN CONFIRMING THE ACTION OF THE LEARNED THE AO OF TREATING THE REIMBURSEMENT OF SALARY COST RECEIVED BY THE APPELLANT AS FEES FOR TECHNICAL SER VICES UNDER THE PROVISIONS OF SECTION 9(1) (VII) OF THE INCOME- TAX ACT, 1961 ('THE ACT'). 3. WITHOUT PREJUDICE TO THE ABOVE GROUNDS, ON THE F ACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LEARNED CIT ( A) HAS LEGALLY ERRED IN CONFIRMING THE ACTION OF THE LEARNED AO OF TREATING THE REIMBURSEMENT OF SALARY COST RECEIVED BY THE APPELL ANT AS FEES FOR INCLUDED SERVICES UNDER ARTICLE 12 OF THE DOUBL E TAX AVOIDANCE AGREEMENT BETWEEN INDIA AND USA. 4. WITHOUT PREJUDICE TO THE ABOVE GROUNDS, ON THE F ACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LEARNED CIT ( A) HAS LEGALLY ERRED IN NOT PASSING A SPEAKING ORDER/ REASONED ORD ER IN HOLDING THE REIMBURSEMENT OF SALARY COST RECEIVED BY THE AP PELLANT AS FEES FOR INCLUDED SERVICES UNDER THE ARTICLE 12 OF THE DOUBLE TAX AVOIDANCE AGREEMENT BETWEEN INDIA AND USA. 2. THE BRIEF FACTS QUA THE ISSUE RAISED ARE THAT, THE ASSESSEE COMPANY, M/S MORGAN STANLEY INTERNATIONAL INCORPORA TED, IS RESIDENT OF USA AND IT IS A 100% SUBSIDIARY OF M/S MORGAN STANLEY USA. ITS PRIMARY ACTIVITY IS TO PROVIDE SUPPORT SERVICES TO VARIOUS SUBSIDIARIES ALL OVER THE WORLD AND IN INDIA. IN THE RELEVANT PREVIOUS YEAR, THE ASSESSEE HAD ENTERED INTO AN AGREEMENT WITH M/S J M MORGAN STANLEY SECURITIES PRIVATE LIMITED, AN INDIAN COM PANY FOR PROVIDING SUPPORT SERVICES. THE ASSESSING OFFICER NOTED THAT DURING THE YEAR, I.T.A. NO.6882/MUM/2011 3 THE ASSESSEE HAS RECEIVED CERTAIN PAYMENTS ON ACCO UNT OF SALARY TO THE ASSESSEES EMPLOYEES WHO WERE DEPUTED TO INDIAN SUBSIDIARIES, M/S MORGAN STANLEY ADVANTAGES SERVICES PVT. LTD (M SASPL) AND M/S MISM GLOBAL SUPPORT AND TECHNOLOGY SERVICES PVT LTD. (GSTSPL). HE FURTHER NOTED THAT, FOLLOWING PARTY W ISE RECEIPTS AND TAX WITHHOLDINGS WAS REPORTED BY THE ASSESSEE :- NAME OF THE PARTY AMOUNT TAX WITHHOLD TAXABILI TY M/S J M MORGAN STANLEY SECURITIES PRIVATE LIMITED RS.6,30,22,098 RS.95,29,168 OFFERED FOR TAX AS FIS M/S MORGAN STANLEY ADVANTAGES SERVICES PVT. LTD RS.4,46,66,994/- RS.66,41,000/- NOT TAXABLE AS IT I S REIMBURSEMENT OF EXPENSES M/S MISM GLOBAL SUPPORT AND TECHNOLOGY SERVICES PVT LTD RS.2,00,63,673/- RS.30,13,000 NOT TAXABLE AS IT IS REIMBURSEMENT OF EXPENSES TOTAL RS.12,77,52,765/ - RS.1,91,83,168/ - IN THIS YEAR, THE ASSESSEE HAS SECONDED FIVE OF ITS EMPLOYEES TO TWO OF ITS SUBSIDIARY IN INDIA AS PER THE SECONDMEN T LETTER. THEIR WORK PROFILE AND DETAILS OF SALARY PAID TO THEM WE RE AS UNDER : - NAME OF THE EMPLOYEES NAME OF THE EMPLOYERS WORK PROFILE SA LARY AS PER FORM NO.16 MR.BHAVIN DOSHI M/S MISM GLOBAL SUPPORT AND TECHNOLOGY SERVICES PVT LTD OVER ALL MANAGEMENT AND DAY TO DAY SUPERVISION OF IT TEAN RS.2,03,72,379/- MR.RANJIT SHARMA M/S MORGAN STANLEY ADVANTAGES SERVICES PVT. LTD INFORMATION TECHNOLOGY RS.3,01,10,271/- MR.TIMOTHY MC COY M/S MORGAN STANLEY ADVANTAGES SERVICES PVT. LTD FIXED INCOME DIVISION RS.80,49,854/- MR.MICHAEL E MC CONNELL M/S MORGAN STANLEY ADVANTAGES SERVICES PVT. LTD INFORMATION TECHNOLOGY RS.26,63,399/- MR.KETAN PAREKH M/S MORGAN STANLEY ADVANTAGES SERVICES PVT. LTD EQUITY FUND SERVICES RS.1,04,52,210/- TOTAL SALARY RS.7,16,48,413 I.T.A. NO.6882/MUM/2011 4 2.1 THE ASSESSEES CASE BEFORE THE ASSESSING OFFI CER WAS THAT, IT HAS MADE PAYMENT OF SALARY AFTER DEDUCTION OF TAX AT SOURCE U/S 192 TO THE EMPLOYEES DEPUTED IN INDIA. SUCH A PA YMENT OF SALARY WAS MADE ON BEHALF OF ITS INDIAN SUBSIDIARIES, ONLY FOR ADMINISTRATIVE CONVENIENCE AND THE SAME AMOUNT WAS REIMBURSED BY T HE SUBSIDIARY COMPANIES WITHOUT ANY MARK-UP. SINCE THE PAYMENT RE CEIVED WAS ON ACCOUNT OF REIMBURSEMENT OF EXPENSES, HENCE IT IS NOT TAXABLE IN INDIA AS THERE IS NO ELEMENT OF INCOME ON SUCH A RE IMBURSEMENT . THE ASSESSEE ALSO FILED SECONDMENT /DEPUTATION LET TER RELATING TO SAID EMPLOYEES, WHO WERE SECONDED TO INDIA FOR R ENDERING SERVICES FOR THE INDIAN COMPANIES. IN THE SAID LE TTER IT WAS MENTIONED THAT, THE EMPLOYEES WOULD BE WORKING UNDE R THE SUPERVISION AND CONTROL OF THE BOARD OF DIRECTORS OF THE SUBSIDIARY COMPANIES IN INDIA AND DAY TO DAY RESPONSIBILITY W OULD BE MANAGED BY THE INDIAN COMPANY, AND THEY WILL BE ACCOUNTAB LE ONLY TO THEM. THE ASSESSEE HAD ALSO FILED COPY OF DEBIT NOTES RAISED BY THE ASSESSEE ON THE INDIAN COMPANY FOR THE REIMBURSEME NT OF SALARY COST AND ALSO COPY OF REMITTANCE CERTIFICATE FOR TH E REMITTANCE OF SALARY. THE ASSESSEE ALSO PRODUCED THE COPIES OF FORM NO.16 AND CERTIFICATE OF TDS DEDUCTED U/S 192 ON SUCH SALAR Y PAID. HOWEVER, THE AO DID NOT ACCEPT THE ASSESSEES CONTENTION TH AT THE PAYMENT I.T.A. NO.6882/MUM/2011 5 MADE ON ACCOUNT OF REIMBURSEMENT OF SALARY IS NOT T AXABLE IN INDIA. HIS MAIN REASONING WERE :- A) FIRSTLY, THE EMPLOYEES HAVE BEEN DEPUTED TO INDI A WHO ARE HIGHLY QUALIFIED AND TECHNICAL PERSONS, OFFER ING SPECIAL SERVICES TO THE INDIAN SUBSIDIARIES IN THE DESIGNAT ED AREAS OF WORK FOR WHICH THEY ARE EXPECTED TO UTILIZE IN IND IA. THE NATURE OF SERVICES OFFERED BY THE EMPLOYEES HAVE TO BE U NDERSTOOD IN BROAD TERMS AS THERE IS NO SECONDMENT AGREEMENT BETWEEN THE TWO PARTIES TO THIS EFFECT. B) SECONDLY, THOUGH THE EMPLOYEES HAVE BEEN DEPUTED IN INDIA AND REQUIRED TO WORK UNDER THE GENERAL SUPERV ISION AND CONTROL OF INDIAN COMPANIES, HOWEVER, THE ASSESSEE IS RESPONSIBLE FOR THE REVIEW, DISCIPLINE, PROMOTION , APPRAISAL AND ALL OTHER HR AND ADMINISTRATIVE MATTERS OF THE DEPU TED PERSONS. C) THIRDLY, THE ASSESSEE IS PROVIDING CONSULTANCY S ERVICES TO THE INDIAN COMPANIES, AS ITS MAIN BUSINESS ACTIVIT Y IS TO PROVIDE SUPPORT SERVICE TO ITS SUBSIDIARIES. THUS, THE REAL BUSINESS OF THE ASSESSEE IS TO PROVIDE MANAGERIAL AND CONSULTANCY SERVICES, WHICH IS NOTHING BUT FEE FO R TECHNICAL SERVICES (FTS); I.T.A. NO.6882/MUM/2011 6 D) LASTLY, THERE IS NO ONE TO ONE CO-RELATION BETWE EN THE SALARY PAYMENT AND THE AMOUNT OF REMITTANCE PAID T O THE ASSESSEE. FOR THESE REASONS, THE AO HELD THAT THE CONSIDERATI ON RECEIVED BY THE ASSESSEE IS FOR THE SERVICES PROVIDED BY THE DEPUTE D PERSONS TO THE INDIAN SUBSIDIARIES IS TAXABLE AS FTS UNDER THE DOM ESTIC LAW, I.E. 9(1)(VII). EVEN UNDER ARTICLE 12(4) OF INDIA-US. DT AA, THE CONSIDERATION RECEIVED FOR RENDERING OF TECHNICAL S ERVICES IN INDIA IS TAXABLE IN INDIA AS THESE SERVICES GIVEN BY DEPUTE D EMPLOYEES, MAKE AVAILABLE TECHNICAL KNOWLEDGE, EXPERIENCE, SKI LL, KNOW-HOW ETC. THUS, THE PAYMENT RECEIVED BY THE ASSESSEE FOR REND ERING THE SERVICES THROUGH ITS EMPLOYEES ARE TAXABLE IN INDIA AS PER THE PROVISIONS OF DTAA, BEING IN THE NATURE OF FEES FO R INCLUDED SERVICES (FIS). ACCORDINGLY, HE ADDED THE ENTIRE A MOUNT OF REIMBURSEMENT OF SALARY RECEIVED BY THE ASSESSEE FO R SUMS AGGREGATING TO RS.6,47,30,667/- AS FIS. 3. BEFORE THE LD. CIT(A), THE ASSESSEES MAIN CONT ENTION WAS THAT, IT HAS NOT RENDERED ANY SERVICES TO THE INDI AN COMPANIES, BUT HAS MERELY DEPUTED ITS EMPLOYEES TO THE INDIAN COMP ANY ON THE CONDITION THAT THEY WILL BE WORKING UNDER THE SUPE RVISION AND CONTROL OF THE INDIAN COMPANY. AS PER THE TERMS OF SECONDM ENT LETTER AND I.T.A. NO.6882/MUM/2011 7 UNDERSTANDING, THE ASSESSEE WOULD PAY SALARY TO TH ESE EXPATRIATES AND SAME AMOUNT WOULD BE REIMBURSED TO THE ASSESSE E. IN SUPPORT OF THIS CONTENTION RELIANCE WAS PLACED ON THE DECIS ION OF ITAT, MUMBAI SPECIAL BENCH IN THE CASE OF MAHINDRA AND MAHINDRA LTD V/S DCIT (2009) 313 ITR (AT) 263 (MUMBAI) (SB). THE RELEVANT SUBMISSIONS AS WELL AS THE SYNOPSIS OF THE DECISION S RELIED UPON BY THE ASSESSEE BEEN INCORPORATED BY THE LD. CIT(A) FROM PAGES 4 TO 9 OF THE APPELLATE ORDER. THE LD. CIT(A) ON PERUSAL O F THE COPY OF INCOME TAX RETURNS FILED IN INDIA BY THE TWO OF T HE EMPLOYEES I.E. MR.BHAVIN DOSHI AND MR.TIMOTHY MC COY, NOTICED THA T THERE IS SOME DISCREPANCY IN THE FIGURES GIVEN IN THE REMITTANCE OF SALARY REIMBURSED AND THE SALARY INCOME SHOWN BY THEM IN THEIR RETURN OF INCOME FILED IN INDIA. THOUGH THE ASSESSEE EXPLAINE D THE DIFFERENCE BETWEEN REMITTANCE AND SALARY INCOME, HOWEVER, THE LD. CIT(A) WAS NOT CONVINCED. AFTER ANALYZING THE VARIOUS DECISIO NS AS RELIED UPON BY THE ASSESSEE, LD. CIT(A) OBSERVED THAT THEY ARE NOT APPLICABLE TO THE FACTS AND CIRCUMSTANCES OF THE CASE AND HELD TH AT THE AO HAS RIGHTLY TREATED THE SAID INCOME TAXABLE AS FIS UNDE R INDIA US DTAA AND ALSO U/S 9(1)(VII). THE RELEVANT PORTION OF L D. CIT(A)S FINDING IS AS UNDER : I.T.A. NO.6882/MUM/2011 8 3.11. CONSIDERING ALL THE ABOVE AND SINCE, THE ASS ESSEE HAS FAILED TO DEMONSTRATE WITH EVIDENCE THAT THE COST I NCURRED BY THE FOREIGN COMPANY HAS BEEN REIMBURSED BY THE INDIAN COMPANIES AS SUCH' AND THAT THERE IS NO SECONDMENT AGREEMENT, AND THAT THE INDIAN COMPANY CANNOT REMOV E THE EMPLOYEES DEPUTED TO INDIA, I AM OF THE VIEW THAT T HIS IS NOT A CASE OF REIMBURSEMENT OF COST SIMPLICITOR. CONSIDERING T HE NATURE OF THE JOB PERFORMED BY THE DEPUTED PERSONS AND ALSO THE D ISCUSSION MADE BY A.O. I AM OF THE OPINION THAT THIS IS A CAS E OF PROVIDING TECHNICAL SERVICES IN TERMS OF ARTICLE 12 OF INDIA- US DTAA AND SECTION 9(1)(VII) OF THE INCOME-TAX ACT, 1961 AND THE SUM REMITTED IS FEES FOR TECHNICAL SERVICES'. THEREFOR E, THE ORDER OF THE A.O. IS UPHELD AND APPEAL IS DISMISSED. 4. BEFORE US, THE LD. SR.COUNSEL, SHRI ARVIND SONDE AFTER EXPLAINING THE ENTIRE FACTS OF THE ISSUE INVOLVED, FIRST OF ALL POINTED OUT TO THE LETTERS OF THE SECONDMENT OF THE EMPLOYEES AND SUBMITTED THAT IN THE SAID LETTER, TERMS AND CONDITIONS HAVE BEEN CLEARLY MENTIONED THAT THE EMPLOYEES HAVE BEEN SENT TO IN DIA FOR RENDERING THE SERVICES FOR THE INDIAN COMPANIES, AND THEY WOU LD BE UNDER COMPLETE SUPERVISION AND CONTROL OF BOARD OF THE D IRECTORS OF THE INDIAN COMPANIES. THE DAY TO DAY RESPONSIBILITY AN D ACTIVITIES WOULD BE SUPERVISED BY THE INDIAN COMPANIES ONLY AND THE EMPLOYEES ARE ANSWERABLE FOR THEIR SERVICES TO THEM. THE ENTIR E PAYMENT OF SALARY IS BORNE BY THE ASSESSEE COMPANY AND ON SUCH PAYMEN T OF SALARY, TDS U/S 192 HAS BEEN DEDUCTED AND ALSO DEPOSITED IN THE INDIAN GOVERNMENT ACCOUNT. THE ENTIRE SALARY HAS BEEN RE IMBURSED BY THE INDIAN COMPANY TO THE ASSESSEE IN TERMS OF SECONDM ENT LETTER, I.T.A. NO.6882/MUM/2011 9 WHICH HAS BEEN TREATED AS TAXABLE IN INDIA AS FIS. HE ALSO INVITED OUR ATTENTION TO THE TDS CERTIFICATES AND THE DETAILS O F TDS DEDUCTED WHICH HAVE BEEN PLACED IN THE PAPER BOOK. HE CATEGO RICALLY DREW OUR ATTENTION TO THE CERTIFICATE ISSUED BY S R BATLIBOY AND CO., WHEREIN THE DETAIL REASONS WERE GIVEN AS TO WHY THE REMITTA NCE OF SALARY CANNOT BE TAXED, EITHER AS ROYALTY OR AS FEES F OR INCLUDED SERVICES IN TERMS OF RELEVANT CLAUSE OF DTAA. T HE OPINION AND THE REMARK APPEARING IN SUCH CERTIFICATE WHICH IS VERY RELEVANT FOR UNDERSTANDING THE ISSUE INVOLVED, IS REPRODUCED HE REUNDER :- MSTT IS A COMPANY INCORPORATED IN USA. AS PER SEC TION 90(2) OF THE ACT, WHERE AN ASSESSEE IS A RESIDENT OF A CO UNTRY WITH WHOM INDIA HAS ENTERED INTO A TAX TREATY, THE PROVI SIONS OF THE TAX TREATY OR THE ACT, WHICHEVER IS MORE BENEFICIA L TO THE ASSESSEE WILL APPLY. THEREFORE, THE PROVISIONS OF THE DOUBLE TAXATION AVOIDANCE AGREEMENT BETWEEN INDIAN AND U SA (DTAA) WILL APPLY TO MSTT. DURING THE FINANCIAL YEAR ENDING ON MARCH 31, 200 5, MSTT HAS DEPUTED EMPLOYEES TO MSAS TO WORK UNDER THE SUPERVISION AND CONTROL OF MSAS. FURTHER, MSAS PRO POSED TO REIMBURSE THE SALARY COST OF THE DEPUTED EMPLOYEES TO MSTT. . ARTICLE 12 OF THE DTAA DEALS WITH THE TAXATI ON OF FEES FOR INCLUDED SERVICES (FIS) UNDER THE DTAA, FIS WILL B E TAXED IN INDIA AT 15% ON A GROSS BASIS, PROVIDED THAT SUCH PAYMENTS ARE IN CONSIDERATION FOR THE RENDERING OF ANY TECHN ICAL OR CONSULTANCY SERVICES (INCLUDING THE PROVISION OF S ERVICES OF TECHNICAL OR OTHER PERSONNEL) WHICH, INTERALIA MAKE AVAILABLE TECHNICAL KNOWLEDGE., EXPERIENCE, SKILL, KNOW HOW O R PROCESS OR CONSIST OF THE DEVELOPMENT AND TRANSFER OF A TECHNI CAL PLAN OR TECHNICAL DESIGN I.T.A. NO.6882/MUM/2011 10 IT IS REPRESENTED TO US THAT THE DEPUTED EMPLOYEES DO NOT RENDER SERVICES WHICH SHOULD QUALITY AS FIS UNDER A RTICLE 12 OF THE DTAA. THE SUPREME COURT OF INDIA HAS IN THE CASE OF DIR ECTOR OF INCOME-TAX (INTERNATIONAL TAXATION) V/S MORGAN STA NLEY & CO. HAS HELD THAT A PERMANENT ESTABLISHMENT (PE) OF THE OVERSEAS ENTITY IS CONSTITUTED IN INDIA ON ACCOUNT OF DEPUTING ITS EMPLOYEES TO AN INDIAN ENTITY. FURTHER, THE SU PREME COURT HELD THAT WHERE THE PE, BEING THE INDIAN ENTITY, IS REMUNERATED ON AN ARMS LENGTH BASIS TAKING INTO ACCOUNT ALL TH E FUNCTIONS AND RISKS UNDERTAKEN BY THE PE, THERE IS NO FURTHER NEED TO ATTRIBUTING PROFITS TO THE PE. IN THIS REGARD, BASED ON THE SUPREME COURT RULING A PE OF MSII SHOULD BE CONSTITUTED IN INDIA ON ACCOUNT OF DEPUTING EMPLOYEES TO MSAS. BASED ON DISCUSSIONS WITH THE MANAGEMENT, WE UNDERS TAND THAT MSAS IS REMUNERATED ON AN ARMS LENGTH BASIS, TAKING INTO ACCOUNT THE RISKS ASSUMED AND FACTIONS PERFORMED BY MSAS. ACCORDINGLY, BASED ON THE SUPREME COURT RULING, NO FURTHER ATTRIBUTION TO THE PE OF MSII, BEING MSAS IS REQU IRED. GIVEN THE ABOVE AND AS THE PAYMENT OF MSII REPRESENTS PUR E REIMBURSEMENT OF COSTS, IT MAY BE CONTENDED THAT TH E PAYMENT TO MSII SHOULD NOT BE REGARDED AS MSIIS INCOME AN D ACCORDINGLY, THE SAME IS NOT TAXABLE IN INDIA. HOWEVER, ON A CONSERVATIVE BASIS, TAX HAS BEEN WIT HHELD AT THE RATE OF 15% OF THE GROSS PAYMENTS AS PRESCRIBED UND ER ARTICLE 12 OF THE DTAA SHRI ARVIND SONDE, FURTHER POINTED OUT THAT, IN THE CASE OF M/S MORGAN STANLEY, UK AND M/S MORGAON STANLEY SINGAPORE FOR T HE SAME ASSESSMENT YEAR, SIMILAR REIMBURSEMENT OF SALARY R ECEIVED FOR THE DEPUTED EMPLOYEES HAS NOT BEEN TREATED AS INCOME T AXABLE IN INDIA EITHER AS FTS OR AS FIS. THE COPY OF THE SAID ASSES SMENT ORDERS I.T.A. NO.6882/MUM/2011 11 PASSED U/S 143(3) HAVE BEEN PLACED IN PAPER BOOK AT PAGES 24 AND 25. HE SUBMITTED THAT EVEN, THE LD. CIT(A) HAS N OT GIVEN ANY PROPER REASONS, AS TO HOW THE PAYMENT IS TREATED AS FIS WITHIN THE SCOPE OF ARTICLE 12(4) OF THE DTAA. SINCE THE ASSESSEE HAS C LAIMED BENEFIT UNDER TREATY, THEREFORE, PROVISIONS OF SECTION 9(1) (VII) WOULD NOT APPLY. HE FURTHER SUBMITTED THAT THE AMOUNT RECEIVED BY TH E ASSESSEE IS TOWARDS REIMBURSEMENT OF SALARY COST AND DOES NOT INVOLVE ANY ELEMENT OF INCOME. THE REIMBURSEMENT IS COST REC HARGE ARISING OUT OF EXPENDITURE INCURRED BY ONE PERSON ON BEHALF OF THE ANOTHER AND NOT FOR PROVISION OF SERVICES. THERE IS NO SPECIFI C PROVISION FOR TAXING THE REIMBURSEMENT. IN SUPPORT OF THIS CONTENTION, HE STRONGLY RELIED UPON THE DECISION OF JURISDICTIONAL HIGH COURT IN THE CASE OF CIT V/S SIEMENS AKTIONGESELLSCHAFT (2009) 310 ITR 320 ( BOM ). THE SECOND LIMB OF HIS ARGUMENT WAS THAT EVEN UNDER THE DOMES TIC LAW THE REIMBURSEMENT OF THE SALARY COST CANNOT BE TAXED AS FTS U/S 9(1)(VII) AS FOR BEING TAXED UNDER THE SAID SECTIO N, THE FEES OR ROYALTY HAS TO HAVE CHARACTER OF INCOME, WHICH HERE IN TH IS CASE, THERE IS NO INCOME TO THE ASSESSEE. HE SUBMITTED THAT THE TRA NSFER PRICING OFFICER TO WHOM MATTER WAS REFERRED BY THE AO, IN H IS ORDER FOR THE SAME ASSESSMENT YEAR HAS ACCEPTED THE REIMBURSEMENT OF COST AT ARMS LENGTH AND NO ADVERSE INFERENCE HAS BEEN DRAW N. REGARDING I.T.A. NO.6882/MUM/2011 12 ALLEGATIONS OF THE AO THAT, THERE IS NO SECONDMENT AGREEMENT, HE SUBMITTED THAT ALL HIS OBSERVATIONS ARE WHOLLY INCO RRECT, AS THE SECONDMENT LETTER (PLACED IN THE PAPER BOOK) CLEARL Y SHOWS THAT THERE IS A PROPOSAL AND ACCEPTANCE AND IT DULY DESCRIBES THE TERMS AND CONDITIONS. FOR THE PROPOSITION THAT SUCH A REIMB URSEMENT OF SALARY OF THE SECONDED EMPLOYEES IS NOT TAXABLE AS FIS, HE RELIED UPON THE DECISION OF ITAT, MUMBAI BENCH IN THE CASE OF TE MASEK HOLDINGS V/S DCIT, (2013) 27 ITR (TRIB) 125 (MUM) AND CATEN A OF OTHER DECISION WHICH ARE AS UNDER : A) ITO V/S AON SPECIALIST SERVICES PRIVATE LIMI TED (ITA NO.1640/BANG/2012) B) DIT V/S HCL INFOSYSTEMS LTD (2005) 274 ITR 261 ( DELHI) UPHELD ITAT DECISION IN THE CASE OF HCL INFOSYSTEM S LTD V DCIT -2002 76 TTJ 505) C) CIT V/S KARLSTORZ ENDOSCOPY INDIA PVT. LTD (ITA NO.2929/DELHI HC/2009) D) ABBEY BUSINESS SERVICES INDIA PVT LIMITED V/S DC IT (2012) 53 SOT 401 (BANG) E) ACIT V/S CMS (INDIA) OPERATIONS AND MAINTENANCE CO.PVT. LTD (2012) 135 ITD 386 (CHENNAI) F) ITO V/S ARIBA TECHNOLOIES (INDIA) PVT LTD ITA NO.616/BANG/2011 G) IDS SOFTWRE SOLUT9IONS (INDIA) PVT LTD (2009) 122 TTJ 410 I.T.A. NO.6882/MUM/2011 13 H) CHOLAMANDALAM MS GENERAL INSURANCE CO.LTD (2009) 309 ITR 356 (AAR) I) DDIT V/S TEKMARK GLOBAL SOLUIONS LLC (2010) 38 SOT 7 (MUM) 5. SHRI ARVIND SONDE, FURTHER ARGUED THAT BY DEPUT ING EMPLOYEES TO THE INDIAN COMPANIES, THE ASSESSEE HAS NOT REN DERED ANY SERVICE NOR HAS MADE AVAILABLE ANY KIND OF TECHN ICAL KNOWLEDGE , EXPERIENCE, SKILL, KNOW HOW ETC. THESE EMPLOYEES DE PUTED TO THE INDIA, WERE UNDER DIRECT CONTROL AND SUPERVISION OF THE INDIAN COMPANY AND IT CANNOT BE SAID THAT THE ASSESSEE COM PANY HAS RENDERED ANY DIRECT OR INDIRECT SERVICES TO THE IND IAN COMPANY THROUGH EMPLOYEES. SUCH REIMBURSEMENT OF SALARY CO ST DOES NOT QUALITY AS FIS, IN TERMS OF AS PER ARTICLE 12 (4) OF INDIA-US DTAA. HE DRAW OUR ATTENTION TO THE MAKE AVAILABLE CLAUSE AS GIVEN IN ARTICLE 12(4). LASTLY, WITHOUT PREJUDICE HE SUBMITT ED THAT, IF THE SECONDED EMPLOYEES ARE TO BE TREATED AS EMPLOYEES O F ASSESSEE WORKING IN INDIA FOR THE ASSESSEE AND THE PAYMENT RECEIVED IS TAXABLE INCOME IN INDIA, THEN IT HAS TO BE SEEN FRO M THE ANGLE THAT THE SECONDED EMPLOYEES WILL CONSTITUTE SERVICE PE OF THE ASSESSEE IN INDIA AND THEREFORE, THE TAXABILITY OF THE INCOME SHALL BE GOVERNED BY ARTICLE 7 AND NOT ARTICLE 12 AND IN SUCH CASES THE RE WOULD BE NO TAX PAYABLE, BECAUSE ASSESSEE WOULD BE ENTITLED TO DED UCTION OF THE I.T.A. NO.6882/MUM/2011 14 EXPENDITURE INCURRED ON SALARY AND ON WHICH PROPER DEDUCTION OF TAX U/S 192 HAS ALREADY BEEN DEDUCTED. THUS, FROM ALL T HE ANGLES, REIMBURSEMENT OF SALARY COST CANNOT BE TAXED IN IND IA AS FIS. 6. ON THE OTHER HAND, THE LD. DR STRONGLY RELIED UP ON THE OBSERVATIONS AND FINDING OF THE AO AND CIT(A) AND FURTHER SUBMITTED THAT, THESE EMPLOYEES WERE HIGHLY QUALIFIED PERSO NNELS HAVING TECHNICAL SKILLS AND EXPERIENCE TO RENDER SERVICES TO THE INDIAN COMPANY IN INDIA. SINCE, THE ASSESSEE IS IN THE BU SINESS OF RENDERING SUPPORT SERVICES AND THEREFORE, IT WAS TH ROUGH THESE EMPLOYEES, THE ASSESSEE HAS RENDERED SERVICES TO TH E INDIAN COMPANIES, WHICH HAS TO BE TAXED AS FIS UNDER AR TICLE 12 OF THE TREATY. IN SUPPORT OF HIS CONTENTION, HE STRONGLY RELIED UPON THE DECISION OF AUTHORITY FOR ADVANCE RULING (INCOME T AX), NEW DELHI,TARGET CORPN. INDIA (P.) LTD., IN RE (2012) 252 CTR (AAR) 242 AND AUTHORITY FOR ADVANCE RULINGS (INCOME-TAX), NEW DELHI IN VERIZON DATA SERVICES INDIA (P.) LTD., IN RE *((2011) 337 ITR 192. IN ALL THESE CASES, SIMILAR ISSUES WERE INVOLVED, WHE REBY SECONDED EMPLOYEES UNDER THE SECONDMENT AGREEMENT, WERE DEPU TED AND SENT TO THE INDIAN COMPANY FOR RENDERING SERVICES A ND THEIR REIMBURSEMENT OF SALARY WAS HELD TO BE TAXABLE AS FIS UNDER SIMILAR ARTICLE 12(4) OF THE DTAA. THUS, THE AMOUNT RECEIVE D BY THE I.T.A. NO.6882/MUM/2011 15 ASSESSEE AS REIMBURSEMENT IS NOTHING BUT FIS ON ACC OUNT OF MAKE AVAILABLE CLAUSE AND HAS RIGHTLY BEEN TAXED UNDER ARTICLE 12(4) OF DTAA IN INDIA. 7. AFTER HEARING OF THE CASE, IT CAME TO OUR NOTICE THAT, THE HONBLE DELHI HIGH COURT IN THE CASE OF CENTRICA INDIA OFFS HORE (P.) LTD. V/S CIT, (2014) 364 ITR 336, WHILE INTERPRETING ARTICLE 13 OF INDIA-UK- DTAA AND ARTICLE 12 OF INDIA-CANADA-DTAA, ON SIMILA R KIND OF TRANSACTION HAS HELD THAT SECONDMENT OF EMPLOYEES OF OVERSEAS ENTITIES WHO HAVE BEEN PAID SALARY BY THE OVERSEAS ENTITY AND REIMBURSED TO THE ASSESSEE COMPANY BY THE INDIAN C OMPANY WAS HELD TO BE PAYMENT FOR TECHNICAL SERVICES WITHIN TH E MEANING OF FIS CLAUSE AND ALSO UNDER MAKE AVAILABLE CLAUSE OF AR TICLE 12. FOR THE PURPOSE OF CLARIFICATION, THE CASE WAS RE-FIXED FO R SEEKING COMMENTS OF BOTH THE PARTIES. THE LD. SR.COUNSEL, SHRI ARVI ND SONDE SUBMITTED THAT THERE WAS AN EARLIER DECISION OF THE HONBLE DELHI HIGH COURT IN THE CASE OF DIT V/S HCL INFOSYSTEM LTD (2005) 274 ITR 261(DEL), WHEREIN THIS ISSUE OF REIMBURSEMENT OF SALARY WAS D ECIDED IN FAVOUR OF THE ASSESSEE. THIS DECISION OF THE DELHI HIGH C OURT HAS NOT BEEN CONSIDERED BY THE HONBLE DELHI HIGH COURT IN ITS L ATEST DECISION. HOWEVER, WITHOUT PREJUDICE HE SUBMITTED THAT THE HO NBLE SUPREME COURT IN THE CASE OF, DIT (IT) V/S MORGAN STANLEY & CO., (2007) 292 I.T.A. NO.6882/MUM/2011 16 ITR 416 (SC), WHILE EXAMINING THE ISSUE OF PERMANE NT ESTABLISHMENT UNDER INDIA-US DTAA IN THE CONTEXT OF NATURE OF ACTIVITY PERFORMED BY STEWARDS AND DEPUTATIONISTS D EPLOYED BY MORGAN STANLEY CO. TO WORK IN INDIA AS EMPLOYEES OF MSAS; AN INDIAN ENTITY, HELD THAT THE DEPUTED EMPLOYEES CONS TITUTES PE IN INDIA WITHIN ARTICLE 5(2)(L) I.E. SERVICE PE. THIS ISSU E HAS BEEN DISCUSSED BY THE HONBLE SUPREME COURT AT GREAT LENGTH. THIS DECISION OF THE HONBLE SUPREME COURT HAS BEEN CONSIDERED IN T HE DECISION OF THE HONBLE DELHI HIGH COURT IN THE CASE OF CENTRICA INDIA OFFSHORE (P.) LTD.(SUPRA) AND RELYING ON THE SAID DECISION, HONBLE HIGH COURT HELD THAT SECONDED EMPLOYEES CONSTITUTES SERVICE PE IN INDIA. ONCE, IT IS HELD THAT THE SECONDED EMPLOYEES CONS TITUTE SERVICE PE OF THE ASSESSEE IN INDIA, IN TERMS OF DECISION OF T HE HONBLE SUPREME COURT IN OF MORGAN STANLEY & CO (SUPRA), THEN THE PAYMENT OF SALARY CANNOT BE TAXED AS FIS, BECAUSE IN PARA 6 OF ART ICLE 12 OF THE DTAA, IT IS CLEARLY PROVIDED THAT IF THE ROYALTIE S OR FIS ARE ATTRIBUTABLE TO PE, THEN IN SUCH CASES THE PROVISIO NS OF ARTICLE 7 WOULD APPLY AND THE INCOME HAS TO BE COMPUTED IN AC CORDANCE WITH ARTICLE 7. IF SUCH A COMPUTATION OF BUSINESS INCOME IS TO BE DONE; THEN THE SALARY COST HAS TO BE ALLOWED AS DEDUCTION TO THE ASSESSEE AND NO INCOME WOULD BE TAXED IN THAT CASE. HE SUBM ITTED THE ABOVE I.T.A. NO.6882/MUM/2011 17 SAID SUBMISSION IS WITHOUT PREJUDICE TO HIS EARLIE R SUBMISSIONS THAT, NO INCOME IS LIABLE TO BE TAXED IN INDIA ON ACCOUN T OF REIMBURSEMENT OF THE SALARY COST RECEIVED BY THE ASSESSEE FROM TH E INDIAN COMPANY. 8. THE LD. DR SUBMITTED THAT THE ISSUE OF SERVICE PE HAS NOT BEEN DEALT , EITHER BY THE AO OR BY THE LD.CIT(A) A ND HOW MUCH AMOUNT IS ATTRIBUTABLE AS PER ARTICLE 7 OF DTAA, NE EDS TO BE EXAMINED AND THEREFORE, THE MATTER SHOULD GO BACK T O THE FILE OF THE AO. 9. WE HAVE CONSIDERED THE ENTIRE GAMUT OF RIVAL SU BMISSIONS AND PERUSED THE RELEVANT RECORD, PLACED BEFORE US, INCL UDING THE RELEVANT FINDING OF THE AO AS WELL AS OF THE LD. CIT(A). THE ASSESSEE IS A TAX RESIDENT OF USA AND IS PROVIDING SUPPORT SERVICES TO VARIOUS INDIAN COMPANIES, WHO ARE SUBSIDIARIES. THE ASSESSEE HAS DEPUTED FIVE OF ITS EMPLOYEES IN TERMS OF DEPUTATION LETTER WHICH HAVE BEEN PLACED ON RECORD. THESE EMPLOYEES WERE SECONDED TO INDIA TO RENDER THEIR SERVICES TO THE INDIAN COMPANIES UNDER SUPERVISION AND CONTROL OF THE BOARD OF DIRECTORS OF THE INDIAN COMPANIES AND THEIR DAY TO DAY RESPONSIBILITY AND ACTIVITIES WERE MANAGED BY THE I NDIAN COMPANY. HOWEVER, THEIR SALARY WERE PAID BY THE ASSESSEE COM PANY AFTER DEDUCTING TDS U/S 192 OF THE ACT AND DULY DEPOSITED IN THE INDIAN GOVERNMENT TREASURY. THE ENTIRE SALARY PAID BY THE ASSESSEE HAS I.T.A. NO.6882/MUM/2011 18 BEEN REIMBURSED BY THE INDIAN COMPANY TO THE ASSESS EE, WHICH IS EVIDENT FROM THE DEBIT NOTES APPEARING IN THE PAGE 6 OF THE PAPER BOOK. THE TDS CERTIFICATES HAVE ALSO BEEN FILED GI VING THE DETAILS OF TAX DEDUCTED AT SOURCE. ONE OF THE OBJECTION OF AO AS WELL AS LD. CIT(A) WAS THAT, IN THE CASE OF TWO EMPLOYEES, THE RE HAS BEEN SOME DISCREPANCY IN THE AMOUNT SHOWN IN THE TDS CERTIFI CATE AND THE AMOUNT SHOWN IN THEIR INCOME TAX RETURN FILED IN I NDIA. FROM THE TDS CERTIFICATE AND THE DETAILS OF AMOUNT PAYABLE AS CL ARIFIED BY THE LD. COUNSEL, WE FIND THAT, THERE IS NO DISCREPANCY SO FAR AS THE AMOUNT OF COST WHICH HAVE BEEN REIMBURSED BY THE INDIAN COMPANY TO THE ASSESSEE. HOWEVER, ULTIMATELY THE AMOUNT WHICH HAS BEEN RECEIVED BY THE ASSESSEE TOWARDS REIMBURSEMENT OF SALARY COS T HAS BEEN TAXED AS FIS WHICH IS A SUBJECT OF DISPUTE. THE MA IN ISSUE BEFORE US IS, WHETHER SUCH A PAYMENT RECEIVED BY THE ASSESSEE ON ACCOUNT OF REIMBURSEMENT OF COST OF SALARY PAID TO THE SECOND ED EMPLOYEE , CONSTITUTES FEES FOR INCLUDED SERVICES (FIS) WITHI N THE MEANING OF ARTICLE 12(4) OF INDIA-US DTAA, THAT IS, IT IS TAXA BLE IN INDIA AND HENCE TDS U/S 195 OF THE ACT WAS REQUIRED TO BE DEDUCTED . 10. IN THE CURRENT GLOBAL SCENARIO THE INTERNATION AL BUSINESS ENTITIES HAVE EXTENDED THEIR BUSINESS WORLDWIDE AND THEY HA VE MADE THEIR PRESENCE BY ESTABLISHING THEIR OWN SUBSIDIARIES OR GROUP ENTITIES FROM I.T.A. NO.6882/MUM/2011 19 WHOM THEY HAVE BUSINESS ARRANGEMENT. THESE OVERSEA S ENTITIES DEPUTE THEIR TECHNICAL STAFF AND HUMAN RESOURCES IN THE OTHER COUNTRIES, WHICH ARE GROWING ECONOMIES TO SUPPORT THEIR GLOBAL BUSINESS FUNCTIONS AND TO ENSURE QUALITY AND CONSI STENCY IN THEIR OPERATIONS. UNDER A CLASSIC SECONDMENT AGREEMENT, THE SECONDED EMPLOYEES WHO ARE UNDER EMPLOYMENT OF NON-RESIDENT PARENT COMPANY ARE DEPUTED OR TRANSFERRED TO SUBSIDIARY C OMPANY IN THE OVERSEAS COUNTRIES TO WORK FOR SPECIAL ASSIGNMENT W HICH ARE MORE TECHNICAL AND MANAGERIAL IN NATURE. THESE SECOND ED EMPLOYEES USUALLY WORK UNDER DIRECT CONTROL AND SUPERVISION O F THE SUBSIDIARY ENTITIES IN THEIR COUNTRY. SINCE THESE SECONDED EM PLOYEES BELONG TO THE MAIN PARENT ENTITY, THEREFORE, THEY CONTINUE TO RECEIVE THEIR REMUNERATION AND SALARIES WITH ALL SOCIAL SECURITY AND BENEFITS FROM THE PARENT ENTITY. THE SALARY COST AND REMUNERATION ARE REIMBURSED BY THE SUBSIDIARY COMPANY TO THE PARENT ENTITY. STR ICTLY SPEAKING ON PAPER THEY REMAIN THE EMPLOYEES OF THE PARENT ENTI TIES BUT THEY ARE UNDER DIRECT SUPERVISION AND CONTROL OF SUBSIDIARY ENTITY, WHERE THEIR DAY TO DAY ACTIVITIES ARE MANAGED AND GOVERNED BY THEM AND SO MUCH SO THEY CAN BE REMOVED BY THEM. ONCE THE TERM S OF SECONDMENT IS OVER, THEY REVERT BACK TO THEIR PARE NT COMPANY ENTITY. IN A WAY SUBSIDIARY ENTITY IS THE ECONOMIC EMPLOY ER OF THE SECONDED I.T.A. NO.6882/MUM/2011 20 EMPLOYEE WHO ULTIMATELY BEARS THE SALARY COST AND EXERCISE CONTROL OVER THEIR WORK. GENERALLY IT IS CONTENDED THAT RE IMBURSEMENT OF COST CANNOT BE TREATED AS PAYMENT FOR FTS OR FIS, UNLESS THERE IS AN EXPLICIT AGREEMENT BETWEEN THE PARTIES THAT TECHNIC AL SERVICES WOULD BE PROVIDED THROUGH THESE EMPLOYEES. THE DEPUTATI ON OF EMPLOYEES IS MAINLY FOR THE BENEFIT OF THE SUBSIDIARY COMPAN Y TO SMOOTHLY AND EFFICIENTLY CONDUCT THE BUSINESS. HOWEVER, SUCH A REIMBURSEMENT OF SALARY COST BY THE SUBSIDIARY ENTITY HAS BEEN MATTE R OF HUGE CONTROVERSY, AS TO WHAT IS THE NATURE OF SUCH PAYME NT, WHETHER IT IS FEE FOR INCLUDED SERVICES OR NOT. OTHER RELATED CONTROVERSY IS THAT, ON THE BASIS OF DURATION OF THE STAY OF SECONDED /DEPUTED EMPLOYEES IN THE HOST COUNTRIES, WHETHER THE NON-R ESIDENT PARENT ENTITY CONSTITUTE THE SERVICE PE IN THE HOST COUN TRY OR NOT. 11. IN THE PRESENT CONTEXT THE SALARY PAID TO THE S ECONDED EMPLOYEES BY THE PARENT COMPANY, THE TDS HAS BEEN ALREADY BEEN DEDUCTED U/S 192 OF THE ACT, WHICH HAS BEEN CREDI TED TO THE GOVERNMENT OF INDIA ACCOUNT. IN CASE, IF IT IS TO B E HELD THAT REIMBURSEMENT OF SALARY IS NOTHING BUT PAYMENT FOR RENDERING TECHNICAL SERVICES, THEN TDS HAS TO BE DEDUCED U/ S 195 OF THE ACT. THE HONBLE BOMBAY HIGH COURT, EARLIER IN THE CASE OF SIEMENS AKTIONGESELLSCHAFT (SUPRA) HAS HELD THAT REIMBURSE MENT OF EXPENSES I.T.A. NO.6882/MUM/2011 21 CANNOT BE REGARDED AS REVENUE RECEIPT FOLLOWING THE DECISION OF THE HONBLE DELHI HIGH COURT IN THE CASE OF CIT V/S INDUSTRIAL ENGINEERING PROJECTS (1993) 202 ITR 1014 (DELHI) AND THEREFORE NO TDS IS REQUIRED TO BE DEDUCED U/S 195. HOWEVER, THIS DECI SION IS NOT RELIED UPON AS THIS ISSUE WAS DECIDED ON A DIFFERENT CONT EXT. WE HAVE TO EXAMINE OUR CASE AND THE ISSUE IN HAND IN THE LIG HT OF DELHI HIGH COURT DECISION. 12 THE HONBLE DELHI HIGH COURT IN THE CASE OF CENTRICA INDIA OFFSHORE (P.) LTD.(SUPRA) HAD THE OCCASION TO DEAL WITH THE SIMILAR ISSUE OF TAXABILITY OF REIMBURSEMENT OF SALARY COST OF THE SECONDED EMPLOYEES, IN A WRIT PETITION AGAINST THE AAR RULI NG, WHEREIN THEIR LORDSHIPS HAVE ANALYZED THIS ISSUE IN DETAIL AND H ELD THAT SUCH REIMBURSEMENT OF COSTS OR RE-PAYMENT, IS FEES FOR TECHNICAL SERVICES. NOW, WE HAVE TO ANALYZE, WHETHER THIS DECISION WOU LD BE APPLICABLE FOR THE PURPOSE OF ADJUDICATION OF THE ISSUE IN HAN D IN THE PRESENT CASE. THE BRIEF FACTS OF THE CASE OF CENTRICA INDIA WAS THAT, CENTRICA INDIA WAS AN INDIAN COMPANY, A WHOLLY OWNED SUBSID IARY OF CENTRICA PLC, INCORPORATED IN THE UNITED KINGDOM ('UK') WHIC H IS UK BASED COMPANY. THESE OVERSEAS ENTITIES WERE IN THE BUSIN ESS OF SUPPLYING GAS AND ELECTRICITY TO CONSUMERS ACROSS THE U.K AN D CANADA. THEY OUTSOURCED THEIR BACK OFFICE SUPPORT FUNCTIONS LIKE DEBT COLLECTIONS, I.T.A. NO.6882/MUM/2011 22 CONSUMERS' BILLINGS, MONTHLY JOBS TO THIRD PARTY VE NDORS IN INDIA ETC. . THE CENTRICA INDIAS PRINCIPLE OBJECT WAS TO PROVI DE LOCAL INTERFACE BETWEEN UK AND THE INDIAN VENDORS SO AS TO ENSURE THAT INDIAN VENDORS COMPLY WITH THE QUALITY GUIDELINES. FOR T HIS PURPOSE, THE CENTRICA INDIA HAD ENTERED INTO A SERVICE AGREEMENT WITH THE OVERSEAS ENTITIES FOR PROVIDING MANAGEMENT AND QUAL ITY ASSURANCE SERVICE FOR WHICH IT WAS COMPENSATED AT COST PLUS 15% MARK-UP. THE CENTRICA INDIA HAD ALSO ENTERED INTO A SECONDED AGR EEMENT WITH OVERSEAS ENTITIES FOR SECONDMENT OF CERTAIN EMPLOYE ES TO INDIA FOR RENDERING SERVICE AND TECHNICAL SERVICES FOR RUNNIN G ITS OPERATION AT INITIAL STAGES. SUCH SECONDED EMPLOYEES CONTINUED T O REMAIN ON PAY ROLL OF THE OVERSEAS ENTITIES AND RECEIVED SALARY FROM THEM. CENTRICA INDIA REIMBURSED SUCH SALARY COST TO THE OVERSEAS EMPLOYEES ON COST TO COST BASIS. THE AAR HELD THAT, SINCE SECOND ED EMPLOYEES CONTINUED TO BE EMPLOYEES OF THE OVERSEAS ENTITY AN D THE SECONDED EMPLOYEES ARE RENDERING THEIR SERVICES FOR THEIR E MPLOYER IN INDIA BY WORKING FOR SPECIFIED PERIOD, THIS WILL GIVE RISE TO SERVICE PE WITHIN THE MEANING OF ARTICLE 5.2 (K) OF INDIAN-UK DTAA AND THEREFORE SUCH A PAYMENT WOULD BE INCOME ACCRUING TO THE OVERSEAS ENTITY AND WOULD BE TAXABLE IN INDIA AND TDS HAS TO BE DEDUCT ED U/S 195 OF THE ACT. IN THE WRIT PETITION BEFORE THE HONBLE DELH I HIGH COURT, THE I.T.A. NO.6882/MUM/2011 23 MAJOR ISSUES FOR ADJUDICATION BEFORE THEIR LORDSH IPS WAS, FIRSTLY, WHETHER BY WAY OF SECONDMENT OF EMPLOYEES THE OVE RSEAS ENTITY HAD RENDERED ANY TECHNICAL SERVICES IN TERMS OF ART ICLE 12 OF INDIA - CANADA DTAA AND ARTICLE 13 OF INDIA UK DTAA AND S ECONDLY, WHETHER THE OVERSEAS ENTITIES ESTABLISH ANY SERVICE PE IN INDIA. UNDER THESE TREATIES THE CONCEPT OF SERVICE PE H AS BEEN EMBODIED. THE HONBLE COURT AFTER ANALYZING THE DEFINITION OF TECHNICAL SERVICES AND FIS AS APPEARING IN TH E INDIA-UK TREATY AND INDIA-CANADA TREATY, CONCLUDED THAT OVERSEAS EN TITIES ARE PROVIDING TECHNICAL SERVICES TO CENTRICA INDIA THR OUGH THE SECONDED EMPLOYEES UNDER INDIA-UK TREATY AND FIS UNDER IND IA-CANADA TREATY. REGARDING THE ISSUE, WHETHER OVERSEAS EN TITY THROUGH THEIR SECONDED EMPLOYEES HAVE CONSTITUTED SERVICE PE IN I NDIA, THE HONBLE HIGH COURT HAS REFERRED AND RELIED UPON TH E DECISION OF THE HONBLE SUPREME COURT IN THE CASE OF MORGAN STANLE Y & CO. (2007) 292 ITR 416 (SC) AND ALSO EXAMINED THE TERMS AND C ONDITION OF THE EMPLOYMENT OF SECONDED EMPLOYEES, WHETHER THEY ARE EMPLOYEES OF OVERSEAS ENTITY OR OF CENTRICA INDIA. THE HONBL E HIGH COURT CAME TO THE CONCLUSION THAT THE OVERSEAS ENTITY WERE NOT ONLY LEGAL EMPLOYER BUT ALSO REAL EMPLOYER OF THE SECONDED EMP LOYEES TO INDIA. AFTER REFERRING TO THE RELEVANT POTION OF THE DECIS ION OF THE HONBLE I.T.A. NO.6882/MUM/2011 24 SUPREME COURT, THE HONBLE COURT HELD THAT THE SECO NDED EMPLOYEES WILL CONSTITUTE A SERVICE PE OF THE OVERSEAS ENTIT Y IN INDIA. IT WAS FURTHER OBSERVED THAT, EVEN IF THERE IS NO MARK-UP ON THE COST OF SECONDED EMPLOYEES, IT DOES NOT CHANGE THE NATURE O F SERVICE AND WILL NOT AFFECT THE TAXABILITY IN INDIA. THUS, FIN ALLY THE HONBLE HIGH COURT CONCLUDED THAT SECONDED EMPLOYEES RENDERING T HE SERVICE ON BEHALF OF THE OVERSEAS EMPLOYER AND ACCORDINGLY THE Y HAVE ESTABLISHED SERVICE PE IN INDIA AND ALSO THEY ARE RENDERING TECHNICAL SERVICES, WHICH IS TO BE TAXED IN INDIA. 13. IF WE HAVE TO APPLY THE RATIO LAID DOWN BY THE HONBLE DELHI HIGH COURT IN THE PRESENT CASE, THEN IT HAS TO BE S EEN, WHETHER OVERSEAS ENTITY I.E. THE ASSESSEE IS THE REAL ECON OMIC EMPLOYER OF THE SECONDED EMPLOYEES I.E. THE EMPLOYEES ARE MAINT AINING THEIR LIEN ON EMPLOYMENT WITH THE ORIGINAL OVERSEAS AND WHETHER THE ASSESSEE REMAINS RESPONSIBLE FOR THE WORK OF SECOND ED EMPLOYEES IN INDIA OR NOT. THE CASE OF THE ASSESSEE BEFORE US HA S BEEN THAT, SECONDED EMPLOYEES WERE UNDER DIRECT CONTROL AND SUPERVISION OF INDIAN ENTITY WHO WERE MANAGING THEIR ACTIVITIES ON DAY TO DAY BASIS AND THE ASSESSEE WAS ONLY PAYING THEIR SALARY FOR THE EMPLOYEES CONVENIENCE AND BENEFIT. WHETHER THIS FACT WILL LE AD TO ANY DEVIATION FROM THE RATIO LAID DOWN BY THE HONBLE DELHI H IGH COURT, WE ARE I.T.A. NO.6882/MUM/2011 25 NOT ENTERING INTO SEMANTICS OF OVERALL TERMS OF EM PLOYMENT OF THE SECONDED EMPLOYEES, WHETHER THE ASSESSEE IS THE RE AL OR LEGAL EMPLOYER OR THE INDIAN ENTITY IS THE EMPLOYER. WE ARE PROCEEDING ON THE PREMISE THAT THE SECONDED EMPLOYEES ARE THE RE AL EMPLOYEES OF THE ASSESSEE WHO HAVE COME TO INDIA TO RENDER SERV ICES AND ONCE THEY ARE RENDERING SERVICES ON BEHALF OF ASSESSEE IN INDIA THEN, THEY CONSTITUTE SERVICE PE IN INDIA. SUCH AN ESTABLISH MENT OF PE UNDER THESE CIRCUMSTANCES HAVE BEEN DEALT BY THE HONBL E SUPREME COURT IN THE CASE OF MORGAN STANLEY & CO (SUPRA). THE HONBLE SUPREME COURT HELD THAT THE EMPLOYEES OF OVERSEAS ENTITIES TO THE INDIAN ENTITY CONSTITUTES SERVICE PE IN INDIA. THE RELEVA NT FINDING OF THE HONBLE SUPREME COURT IN THIS REGARD IS AS UNDER : 1 5. AS REGARDS THE QUESTION OF DEPUTATION, WE ARE OF THE VIEW THAT AN EMPLOYEE OF MSCO WHEN DEPUTED TO MSAS DOES NOT BECOME AN EMPLOYEE OF MSAS. A DEPUTATIONIST HAS A L IEN ON HIS EMPLOYMENT WITH MSCO. AS LONG AS THE LIEN REMAI NS WITH THE MSCO THE SAID COMPANY RETAINS CONTROL OVER THE DEPUTATIONISTS TERMS AND EMPLOYMENT. THE CONCEPT O F A SERVICE PE FINDS PLACE IN THE U.N. CONVENTION. IT I S CONSTITUTED IF THE MULTINATIONAL ENTERPRISE RENDERS SERVICES THROU GH ITS EMPLOYEES IN INDIA PROVIDED THE SERVICES ARE RENDER ED FOR A SPECIFIED PERIOD. IN THIS CASE, IT EXTENDS TO TWO Y EARS ON THE REQUEST OF MSAS. IT IS IMPORTANT TO NOTE THAT WHERE THE ACTIVITIES OF THE MULTINATIONAL ENTERPRISE ENTAILS IT BEING RE SPONSIBLE FOR THE WORK OF DEPUTATIONISTS AND THE EMPLOYEES CONTIN UE TO BE ON THE PAYROLL OF 'THE MULTINATIONAL ENTERPRISE OR THE Y CONTINUE TO HAVE THEIR LIEN ON THEIR JOBS WITH THE MULTINATIONA L ENTERPRISE, A SERVICE PE CAN EMERGE. APPLYING THE ABOVE TESTS TO THE FACTS OF THIS CASE WE FIND THAT ON REQUEST/REQUISITION FROM MSAS THE I.T.A. NO.6882/MUM/2011 26 APPLICANT DEPUTES ITS STAFF. THE REQUEST COMES FROM MSAS DEPENDING UPON ITS REQUIREMENT. GENERALLY, OCCASION S DO ARISE WHEN MSAS NEEDS THE EXPERTISE OF THE STAFF OF MSCO. IN SUCH CIRCUMSTANCES, GENERALLY, MSAS MAKES A REQUEST TO M SCO. A DEPUTATIONIST UNDER SUCH CIRCUMSTANCES IS EXPECTED TO BE EXPERIENCED IN BANKING AND FINANCE. ON COMPLETION O F HIS TENURE HE IS REPATRIATED TO HIS PARENT JOB. HE RETA INS HIS LIEN WHEN HE COMES TO INDIA. HE LENDS HIS EXPERIENCE TO MSAS IN INDIA AS AN EMPLOYEE OF MSCO AS HE RETAINS HIS LIEN AND IN THAT SENSE THERE IS A SERVICE PE (MSAS) UNDER ARTICLE 5( 2}(1). WE FIND NO INFIRMITY IN THE RULING OF THE ARR ON THIS ASPECT. IN THE ABOVE SITUATION, MSCO IS RENDERING SERVICES THROUGH ITS EMPLOYEES TO MSAS. THEREFORE, THE DEPARTMENT IS RIG HT IN ITS CONTENTION THAT UNDER THE ABOVE SITUATION THERE EXI STS A SERVICE PE IN INDIA (MSAS). ACCORDINGLY, THE CIVIL APPEAL F ILED BY THE DEPARTMENT STANDS PARTLY ALLOWED. THUS, FROM THE AFORESAID DECISION IT IS AMPLY CLEAR THAT SUCH DEPUTED EMPLOYEES IF CONTINUED TO BE ON PAY ROLLS OF OVERSE AS ENTITIES OR THEY CONTINUE TO HAVE THEIR LIEN WITH JOBS WITH OVERSEA S ENTITIES AND ARE RENDERING THEIR SERVICES IN INDIA, SERVICE PE WILL EMERGE. THIS CONCEPT AND THE RATIO HAS BEEN STORNGLY UPHELD BY T HE HONBLE DELHI HIGH COURT ALSO. WE THEREFORE, HOLD THAT THE SECON DED EMPLOYEES OR DEPUTATIONIST WORKING IN INDIA FOR THE INDIAN ENTI TY WILL CONSTITUTE A SERVICE PE IN INDIA. 14. IF WE ACCEPT THIS CONCEPT THAT, BY VIRTUE OF D EPUTING SECONDED EMPLOYEES IN INDIA, THE ASSESSEE HAS ESTABLISHED A SERVICE PE, THEN WHETHER SUCH A PAYMENT MADE BY INDIAN ENTITY TO THE ASSESSEE, (EVEN THOUGH IT IS REIMBURSEMENT OF SALARY COST), WOULD BE TAXABLE I.T.A. NO.6882/MUM/2011 27 UNDER ARTICLE 12(4) OF INDIA US DTAA. RELEVANT A RTICLE 12 OF THE TREATY READS AS UNDER : ARTICLE 12 ROYALTIES AND FEES FOR INCLUDED SERVICES 1. ROYALTIES AND FEES FOR INCLUDED SERVICES ARI SING IN A CONTRACTING STATE AND PAID TO A RESIDENT OF THE OTH ER CONTRACTING STATE MAY BE TAXED IN THAT OTHER STATE. 2. HOWEVER, SUCH ROYALTIES AND FEES FOR INCLUDE D SERVICES MAY ALSO BE TAXED IN THE CONTRACTING STATE IN WHICH THEY ARISE AND ACCORDING TO THE LAWS OF THAT STATE; BUT IF THE BENEFICIAL OWNER OF THE ROYALTIES OR FEES FOR INCLUDED SERVICE S IS A RESIDENT OF THE OTHER CONTRACTING STATE, THE TAX SO CHARGED SHALL NOT EXCEED: XXXX A. XXXXX I. XXXXX A. XXXXX B. XXXX II. XXXX B. XXXXX 3. XXXXXXXXX B. XXXXX. 4. FOR PURPOSES OF THIS ARTICLE, 'FEES FOR INCL UDED SERVICES' MEANS PAYMENTS OF ANY KIND TO ANY PERSON IN CONSIDE RATION FOR THE RENDERING OF ANY TECHNICAL OR CONSULTANCY SERVI CES (INCLUDING THROUGH THE PROVISION OF SERVICES OF TEC HNICAL OR OTHER PERSONNEL) IF SUCH SERVICES: A. ARE ANCILLARY AND SUBSIDIARY TO THE APPLICAT ION OR ENJOYMENT OF THE RIGHT, PROPERTY OR INFORMATION FOR WHICH A P AYMENT DESCRIBED IN PARAGRAPH 3 IS RECEIVED; OR B. MAKE AVAILABLE TECHNICAL KNOWLEDGE, EXPERIENC E, SKILL, KNOW-HOW. OR PROCESSES, OR CONSIST OF THE DEVELOPME NT AND TRANSFER OF A TECHNICAL PLAN OR TECHNICAL DESIGN. 5. XXXXX I.T.A. NO.6882/MUM/2011 28 A. XXXXX B. XXXXXX C. XXXXX D. XXXXXX E. XXXX 6. THE PROVISIONS OF PARAGRAPHS 1 AND 2 SHALL N OT APPLY IF THE BENEFICIAL OWNER OF THE ROYALTIES OR FEES FOR INCLU DED SERVICES, BEING A RESIDENT OF A CONTRACTING STATE, CARRIES ON BUSINESS IN THE OTHER CONTRACTING STATE, IN WHICH THE ROYALTIES OR FEES FOR INCLUDED SERVICES ARISE, THROUGH A PERMANENT ESTABL ISHMENT SITUATED THEREIN, OR PERFORMS IN THAT OTHER STATE I NDEPENDENT PERSONAL SERVICES FROM A FIXED BASE SITUATED THEREI N, AND THE ROYALTIES OR FEES FOR INCLUDED SERVICES ARE ATTRIBU TABLE TO SUCH PERMANENT ESTABLISHMENT OR FIXED BASE. IN SUCH CASE THE PROVISIONS OF ARTICLE 7 (BUSINESS PROFITS) OR ARTIC LE 15 (INDEPENDENT PERSONAL SERVICES), AS THE CASE MAY BE , SHALL APPLY. 7. A. ROYALTIES AND FEES FOR INCLUDED SERVICES SHALL BE DEEMED TO ARISE IN A CONTRACTING STATE WHEN THE PAY ER IS THAT STATE ITSELF, A POLITICAL SUB-DIVISION, A LOCAL AUT HORITY, OR A RESIDENT OF THAT STATE. WHERE, HOWEVER, THE PERSON PAYING THE ROYALTIES OR FEES FOR INCLUDED SERVICES, WHETHER HE IS A RESIDENT OF A CONTRACTING STATE OR NOT, HAS IN A CONTRACTING STATE A PERMANENT ESTABLISHMENT OR A FIXED BASE IN CONNECTI ON WITH WHICH THE LIABILITY TO PAY THE ROYALTIES OR FEES FO R INCLUDED SERVICES WAS INCURRED, AND SUCH ROYALTIES OR FEES F OR INCLUDED SERVICES ARE BORNE BY SUCH PERMANENT ESTABLISHMENT OR FIXED BASE, THEN SUCH ROYALTIES OR FEES FOR INCLUDED SERV ICES SHALL BE DEEMED TO ARISE IN THE CONTRACTING STATE IN WHICH T HE PERMANENT ESTABLISHMENT OR FIXED BASE IS SITUATED. B. WHERE UNDER SUB-PARAGRAPH (A) ROYALTIES OR FE ES FOR INCLUDED SERVICES DO NOT ARISE IN ONE OF THE CONTRA CTING STATES, AND THE ROYALTIES RELATE TO THE USE OF, OR THE RIGH T TO USE, THE RIGHT OR PROPERTY, OR THE FEES FOR INCLUDED SERVICE S RELATE TO SERVICES PERFORMED, IN ONE OF THE CONTRACTING STATE S, THE ROYALTIES OR FEES FOR INCLUDED SERVICES SHALL BE DE EMED TO ARISE IN THAT CONTRACTING STATE. 8. XXXXXXX I.T.A. NO.6882/MUM/2011 29 PARA 6 OF ARTICLE 12 MAKES IT AMPLY CLEAR THAT TAX ABILITY OF ROYALTY AND FEES FOR INCLUDED SERVICES SHALL NOT APPLY, I F THE RESIDENT OF THE CONTRACTING STATE (USA) CARRIES ON THE BUSINESS IN OTHER CONTRACTING STATES (INDIA) IN WHICH FIS ARISES THROUGH PE SIT UATED THEREIN, THEN IN SUCH CASE THE PROVISIONS OF ARTICLE 7 I.E BUSIN ESS PROFITS SHALL APPLY. IN OTHER WORDS, IF THERE IS A PE, THEN ROYA LTY OR FIS CANNOT BE TAXED UNDER ARTICLE 12, ALBEIT ONLY UNDER ARTICLE 7 OF THE DTAA. IT IS AN UNDISPUTED FACT IN THIS CASE, THAT DTAA BENEFIT HAS BEEN AVAILED BY THE ASSESSEE AND THEREFORE, TREATY BENEFIT HAS TO BE GIVEN TO THE ASSESSEE FOR GRANTING RELIEF. NOW, IF THE TAXABILI TY OF SUCH PAYMENT HAS TO BE EXAMINED AND DETERMINED ON THE BASIS OF C OMPUTATION OF BUSINESS PROFIT UNDER ARTICLE 7, THEN THE SALARY PA ID BY THE ASSESSEE WOULD AMOUNT TO COST TO THE ASSESSEE, WHICH IS TO B E ALLOWED AS DEDUCTION WHILE COMPUTING THE BUSINESS PROFIT OF T HE PE IN INDIA. IN OUR OPINION, IF LOGICAL CONCLUSION OF THE DECISION OF THE HONBLE SUPREME COURT IN THE CASE OF MORGAN STANLEY & CO (SUPRA) AND THE DECISION OF HONBLE DELHI HIGH COURT IN THE CASE OF CENTRICA INDIA OFFSHORE (P.) LTD(SUPRA) IS TO BE ARRIVED AT, THEN THE SECONDED EMPLOYEES WILL CONSTITUTE SERVICE PE OF THE ASSESS EE IN INDIA AND IN THAT CASE ANY PAYMENT RECEIVED ON ACCOUNT OF RENDER ING OF SERVICE OF SUCH EMPLOYEES WILL HAVE TO BE GOVERNED UNDER ART ICLE 7 AS PER I.T.A. NO.6882/MUM/2011 30 UNEQUIVOCAL TERMS OF PARA 6 OF ARTICLE 12. THUS, T HE RATIO LAID DOWN IN THE DECISION OF HONBLE DELHI HIGH COURT, WILL NOT HELP THE CASE OF THE REVENUE, IN ANY MANNER BECAUSE UNDER THE CONCEPT OF PE, FIS CANNOT BE TAXED UNDER ARTICLE 12, BUT ONLY AS A BU SINESS PROFIT UNDER ARTICLE 7. IT IS VERY INTERESTING TO NOTE THAT, S IMILAR PROVISION IS ALSO EMBODIED IN THE INDIA-CANADA DTAA IN PARA 6 OF AR TICLE 12, BUT THIS ISSUE WAS NEITHER RAISED OR BROUGHT TO THE NOTICE B EFORE THE HONBLE DELHI HIGH COURT NOR IT WAS CONTESTED BY EITHER PA RTIES. THERE IS INHERENT CONTRADICTION IN THIS CONCEPT, AS IN MOST OF THE TREATIES, EXCLUSIONARY CLAUSE LIKE ARTICLE 12(6) HAS BEEN EMB ODIED, WHICH MAKES THE ISSUE OF TAXABILITY OF FTS OF FIS IN SU CH CASES AS NON APPLICABLE AND HAVE TO BE VIEWED FROM THE ANGLE OF ARTICLE 7. THUS, THE DECISION OF THE HONBLE DELHI HIGH COURT AND AL L OTHER DECISIONS RELIED UPON BY THE REVENUE WILL NOT APPLY IN THE CA SE OF THE ASSESSEE, AS NOWHERE THE CONCEPT OF PARA 6 OF ARTICLE 12 HA VE BEEN TAKEN INTO ACCOUNT FOR DETERMINING THE TAXABILITY OF SUCH A PA YMENT UNDER THE PROVISIONS OF TREATY. THUS, IN OUR CONCLUSION, THE PAYMENT MADE BY THE INDIAN ENTITY TO THE ASSESSEE ON ACCOUNT OF REI MBURSEMENT OF SALARY COST OF THE SECONDED EMPLOYEES WILL HAVE TO BE SEEN AND EXAMINED UNDER ARTICLE 7 ONLY, THAT IS, WHILE COM PUTING THE PROFITS UNDER ARTICLE 7, PAYMENT RECEIVED BY THE ASSESSEE IS TO BE TREATED I.T.A. NO.6882/MUM/2011 31 AS REVENUE RECEIPT AND ANY COST INCURRED HAS TO BE ALLOWED AS DEDUCTION BECAUSE SALARY IS A COST TO THE ASSESS EE WHICH IS TO BE ALLOWED. ACCORDINGLY, THE AO IS DIRECTED TO COMPU TE THE PAYMENT STRICTLY UNDER TERMS OF ARTICLE 7 AND NOT UNDER ART ICLE 12 OF THE DTAA. IN VIEW OF THE AFORESAID FINDING, THE GROUNDS RAISE D BY THE ASSESSEE IS TREATED AS ALLOWED. 15. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS AL LOWED. THE ABOVE ORDER WAS PRONOUNCED IN THE OPEN COURT ON 18TH DEC, 2014. *+ , -. 18TH DEC ,2014 + ' /( 0 SD SD ( . . / B.R. BASKARAN) ( / AMIT SHUKLA ) / ACCOUNTANT MEMBER / JUDICIAL MEMBER ( MUMBAI: DEC,2014. . . ./ SRL , SR. PS ! ' #$% &%'# / COPY OF THE ORDER FORWARDED TO : 1. ! / THE APPELLANT 2. '# ! / THE RESPONDENT. 3. ( ) / THE CIT(A)- CONCERNED 4. / CIT CONCERNED 5. 12/ '3 , ) 3 , ( / DR, ITAT, MUMBAI CONCERNED 6. /4 5( / GUARD FILE. / BY ORDER, TRUE COPY 6 $ (ASSTT. REGISTRAR) ) 3 , ( /ITAT, MUMBAI