SGS INDIA P.LTD, THANE V. ADDL CIT 10(3), MUMBAI

ITA 6974/MUM/2014

• Counselvise Citation: [2019] 112 COUNSELVISE.COM (IT) 2208 (ITAT-MUMBAI)
• Duration Of Justice: 5 year(s) 14 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-11-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: K
• Assessment Year: 2008-2009
• Appeal Filed On: 14-11-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Transfer pricing; Double taxation relief; Opportunity of being heard; Retrospective amendment; Non-deduction of tax; Revised return; TDS; Set aside
• Section: 271(1)(c); 40(a)(ia); 195; 90

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL I, BENCH MUM BAI BEFORE C.N.PRASAD, JUDICIAL MEMBE R & SHRI G. MANJUNATHA, ACCOUNTANT MEMBER ITA NO.6974/MUM/2014 ( ASSESSMENT YEAR: 2008-09 ) SGS INDIA PRIVATE LIMITED NITCO BIZ PARK, 5 TH FLOOR PLOT NO.C/19, ROAD NO.16 WAGLE INDUSTRIAL ESTATE MIDC, THANE THANE(W)- 400 064 VS. ADD.CIT-10(3) MUMBAI PAN/GIR NO. AAAC S5514Q ( APPELLANT ) .. ( RESPONDENT ) & IT(TP).A NO.2512/MUM/2017 ( ASSESSMENT YEAR: 2009-10 ) SGS INDIA PRIVATE LIMITED NITCO BIZ PARK, 5 TH FLOOR PLOT NO.C/19, ROAD NO.16 WAGLE INDUSTRIAL ESTATE MIDC, THANE THANE(W)- 400 064 VS. ADD.CIT,RANGE-10(3) (PRESENT JURISDICTION WITH DCIT 15(3)(2), MUMBAI) MUMBAI PAN/GIR NO. AAAC S5514Q (APPELLANT ) .. (RESPONDENT ) & ITA NO.2513/MUM/2017 ( ASSESSMENT YEAR: 2010-11 ) SGS INDIA PRIVATE LIMITED NITCO BIZ PARK, 5 TH FLOOR PLOT NO.C/19, ROAD NO.16 WAGLE INDUSTRIAL ESTATE MIDC, THANE THANE(W)- 400 064 VS. ADD.CIT,RANGE-10(3) (PRESENT JURISDICTION WITH DCIT 15(3)(2), MUMBAI) MUMBAI PAN/GIR NO. AAAC S5514Q (APPELLANT ) .. (RESPONDENT ) REVENUE BY SHRI. VAIBHAV JAIN, SR.DR ASSESSEE BY SHRI. NILESH MODI, AR SGS INDIA PVT.LTD. 2 DATE OF HEARING 20/11/2019 DATE OF PRONOUNCEME NT 28 /1 1 /2019 / O R D E R PER G.MANJUNATHA (A.M) : THESE THREE APPEALS FILED BY THE ASSESSEE ARE DIRE CTED AGAINST SEPARATE, BUT IDENTICAL ORDER OF THE COMMISSIONER O F INCOME TAX (APPEALS)-11, MUMBAI FOR AY 2008-09 AND ORDERS OF T HE LD. COMMISSIONER OF INCOME TAX (APPEALS)-58, MUMBAI FOR AY 2009-10 AND 2010-11. SINCE, THE FACTS ARE IDENTICAL AND ISS UES ARE COMMON, FOR THE SAKE OF CONVENIENCE, THESE APPEALS WERE HEA RD TOGETHER AND ARE DISPOSED-OFF BY THIS CONSOLIDATED ORDER. ITA NO. 6974/MUM/2014 FOR AY 2008-09:- 2. THIS IS A RECALLED APPEAL, THEREFORE THE GROUNDS OF APPEAL QUA RECALLED ORDER OF THE TRIBUNAL IS ONLY NECESSARY TO DISPOSE OF THE PRESENT APPEAL AND ACCORDINGLY, ONLY THOSE GROUNDS, WHICH ARE REQUIRED TO BE ADJUDICATED, AS PER THE ORDER OF THE TRIBUNAL ARE REPRODUCED AS UNDER:- DISALLOWANCE UNDER SECTION 40(A)(I) OF THE INCOME T AX ACT. 1961 ON ACCOUNT OF PAYMENTS TOWARDS INSPECTION, VERIFICATIO N, TESTING AND CERTIFICATION SERVICES (IVTC'), REIMBURSEMENTS OF E XPENSES AND REPRESENTATION / CO-ORDINATION SERVICES 1 ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS) -11, MUMBAI [' CIT (A)'] HAS ERRED IN ALLOWING PARTIAL RELIEF TO THE EXTENT OF RS. 9,86,6 32 OUT OF THE TOTAL DISALLOWANCES OF RS.1945872/- UNDER SECTION 40(A)(I) OF THE INCOM E TAX ACT, 1961 ('ACT')) ON ACCOUNT OF INSPECTION, VERIFICATION, TESTING AND CE RTIFICATION SERVICES ('IVTC') 2 ON THE FACTS AND IN THE CIRCUMSTANCES OF T HE CASE AND IN LAW, THE LEARNED CIT(A) HAS ERRED IN LAW AND ON FACTS IN ALLOWING PA RTIAL RELIEF OF RS. 2,17,31,522 OUT OF THE TOTAL DISALLOWANCES OF RS.23528174/- UND ER SECTION 40(A)(I) OF THE ACT ON ACCOUNT OF REIMBURSEMENT OF EXPENSES. SGS INDIA PVT.LTD. 3 3. THE FIRST ISSUE THAT CAME UP FOR OUR CONSIDERATI ON FROM GROUND NO.1 OF ASSESSEE APPEAL IS DISALLOWANCE OF PAYMENTS TOWARDS INSPECTION, VERIFICATION, TESTING AND CERTIFICATION SERVICES, (IVTC) U/S 40(A)(I) OF THE I.T.ACT, 1961 FOR FAILURE TO DEDUCT TAX AT SOURCE U/S. 195 OF THE I.T.ACT, 1961. 4. THE BRIEF FACTS OF THE IMPUGNED DISPUTES ARE THA T THE ASSESSEE IS AN INDIAN COMPANY, WHICH IS ENGAGED IN THE BUSIN ESS PROVIDING, INSPECTION, VERIFICATION, TESTING AND CERTIFICATION SERVICES. THE ASSESSEE HAS MADE PAYMENTS TO ITS AFFILIATED/ASSOCI ATED ENTERPRISES TOWARDS IVTC CHARGES FOR SERVICES RENDERED BY NON-R ESIDENTS TO ASSESSEE IN OUTSIDE INDIA. BUT, THESE SERVICES WERE UTILIZED BY THE ASSESSEE IN INDIA. THE ASSESSEE CLAIMS BEFORE THE L OWER AUTHORITIES THAT ALTHOUGH, THE SERVICES ARE TECHNICAL SERVICES WITHIN THE MEANING OF FTS U/S 9(1)(VI) OF THE I.T.ACT, 1961, BUT, AT T HE TIME OF REMITTANCE TO THE NON-RESIDENT, FTS WAS NOT SUBJECT TO TAX IN INDIA IN THE HANDS OF NON-RESIDENT. FURTHER, IN 2010, THE LEGISLATURE HAS RETROSPECTIVELY AMENDED SECTION 9 OF THE ACT, FROM THE YEAR 1976 ON WARDS AND BROUGHT NON-RESIDENTS TO TAX IN INDIA U/S 9(1)(VI) OF THE ACT, EVEN THOUGH, SERVICES WERE RENDERED BY NON-RESIDENT OUTS IDE INDIA. THE LD. AO/TPO DID NOT ACCEPT THE ARGUMENTS OF THE ASSE SSEE AND HELD THAT AS PER THE AMENDED PROVISION OF SECTION 9(1)(V I) WITH RESPECTIVE EFFECT FROM 1976, FTS IS LIABLE TO TAX IN INDIA, EV EN THOUGH THE SERVICES WERE RENDERED IN OUTSIDE INDIA AND ACCORDI NGLY, MADE ADDITIONS TOWARDS AMOUNT PAID FOR IVTC CHARGES U/S 40(A)(I) FOR FAILURE TO DEDUCT TAX AT SOURCE U/S 195 OF THE I.T. ACT, 1961. 5. THE LD. AR FOR THE ASSESSEE, AT THE TIME OF HEAR ING, SUBMITTED THAT THIS ISSUE SQUARELY COVERED IN FAVOR OF THE AS SESSEE BY THE SGS INDIA PVT.LTD. 4 DECISION OF HONBLE BOMBAY HIGH COURT, IN THE CASE OF CIT VS KPMG IN ITA NO. 690/2017, ORDER DATED 24/09/2019, WHERE THE HONBLE HIGH COURT HELD THAT RETROSPECTIVE AMENDMENT CANNOT FASTEN OBLIGATION TO DEDUCT TAX WHEN NOT IN FORCE AT THE R ELEVANT TIME I.E, WHEN PAYMENT WAS MADE. CONSEQUENTLY, NO DISALLOWANC E COULD BE MADE U/S 40(A)(I) FOR FAILURE TO DEDUCT TAX AT SOUR CE ON SUCH PAYMENTS. 6. THE LD. DR, ON THE OTHER HAND, STRONGLY SUPPORTI NG ORDER OF THE LD.CIT(A) SUBMITTED THAT THE LAW IS VERY CLEAR, AS PER WHICH FTS IS LIABLE TO TAX IN INDIA IN THE HANDS OF NON-RESIDENT U/S 9(1)(VI), EVEN THOUGH SERVICES WERE RENDERED BY SUCH NON-RESIDENT S OUTSIDE INDIA. THE LD. AO, AS WELL AS LD.CIT(A) WERE RIGHT IN DISA LLOWED SAID EXPENDITURE U/S. 40(A)(I) FOR FAILURE TO DEDUCT T AX AT SOURCE U/S 195 OF THE I.T.ACT, 1961. 7. WE HAVE HEARD BOTH THE PARTIES, PERUSED THE MATE RIAL AVAILABLE ON RECORD AND GONE THROUGH ORDERS OF THE AUTHORITIE S BELOW. THE FACTS WITH REGARD TO TAXABILITY OF FTS U/S 9(1)(VI) IN THE HANDS OF NON- RESIDENTS IN INDIA, EVEN THOUGH SERVICES WERE REND ERED BY SUCH NON-RESIDENTS OUTSIDE INDIA IS NOT DISPUTED, BECAU SE THE LAW HAS BEEN AMENDED BY THE FINANCE ACT, 2010 WITH RETROSPE CTIVE EFFECT FROM 1976 TO THE PROVISION OF SECTION 9(1)(VI) AND AMENDED THE DEFINITION OF FTS AND ACCORDINGLY, EVEN NON-RESIDE NTS ARE LIABLE TO PAY TAX ON FTS IN INDIA, EVEN THOUGH SERVICES WERE RENDERED IN OUTSIDE INDIA. BUT, FACT REMAINS THAT WHETHER, THE ASSESSEE WAS LIABLE TO DEDUCT TDS U/S 195 IN A SITUATION, WHERE THE NON-RESIDENTS SERVICE PROVIDER ARE NOT LIABLE TO TAX IN RESPECT O F FTS U/S 9(1)(VII), AT THE TIME OF REMITTANCE, BUT BECAME LIABLE TO TAX BY VIRTUE OF A SGS INDIA PVT.LTD. 5 RETROSPECTIVE AMENDMENT MADE IN THE YEAR, 2010 I.E TWO YEARS AFTER THE END OF FINANCIAL YEAR 2007-08 WAS EXMAINED BY T HE COURTS. WE FIND THAT THE HONBLE BOMBAY HIGH COURT IN THE CASE OF CIT VS KPMG IN ITA NO. 609 OF 2017 HAD CONSIDERED IDENTICA L ISSUE AND AFTER CONSIDERING RELEVANT AMENDMENTS TO PROVISION OF SECTION 9(1)(VII) OF THE I.T.ACT, 1961 HELD THAT A RETROSPE CTIVE AMENDMENT CANNOT FASTEN OBLIGATION TO DEDUCT TAX WHEN NOT IN FORCE AT THE RELEVANT TIME I.E WHEN PAYMENT WAS MADE. THE HONBL E COURT, FURTHER HELD THAT THE PARTY CANNOT BE CALLED UPON T O PERFORM AN IMPOSSIBLE ACT I.E TO COMPLY WITH THE PROVISION, WH ICH WAS NOT IN FORCE AT THE RELEVANT TIME. THE RELEVANT FINDINGS O F THE HONBLE COURT ARE AS UNDER;- 11. SO ALSO, QUESTION (II) AS PROPOSED IS ACADEMIC AS NO OCCASION TO DEDUCT TAX AT SOURCE WOULD ARISE IN THE ABSENCE OF ANY INCOME IN THE HANDS OF THE SERVICE PROVIDERS OUTSIDE INDIA IN VIE W OF SECTION 195 OF THE ACT. EVEN OTHERWISE A RETROSPECTIVE AMENDMENT CANNO T CAST AN OBLIGATION TO DEDUCT TAX WHEN NOT IN FORCE AT THE RELEVANT TIM E I.E WHEN PAYMENT WAS MADE. IN FACT, THIS COURT IN COMMISSIONER OF INCOME TAX V/S. M/S. NGC NETWORKS (INDIA) PVT.LTD (INCOME TAX APPEAL NO. 397 OF 2005, DECIDED ON 29 TH JANUARY, 2018) HAS HELD THAT A PARTY CANNOT BE CAL LED UPON TO PERFORM AN IMPOSSIBLE ACT I.E. TO COPY WITH THE PRO VISION WHICH WAS NOT IN FORCE AT THE RELEVANT TIME. ADMITTEDLY THE EXPLANAT ION, IF APPLICABLE IS INTRODUCED LATER BY A RETROSPECTIVE AMENDMENT. THUS , THERE COULD BE NO OBLIGATION NO DEDUCT TAX AT SOURCE WHEN THE PAYMEN TS HAVE BEEN MADE TO THE SERVICE PROVIDERS ABROAD IN THE ABSENCE OF A SPECIFIC PROVISION AT THE TIME WHEN THE PAYMENTS WERE MADE. 8. IN THIS VIEW OF THE MATTER AND RESPECTFULLY FOLL OWING THE DECISION OF HONBLE BOMBAY HIGH COURT, IN THE CASE OF CIT VS KPMG, WE ARE OF THE CONSIDERED VIEW THAT NO DISALLOWANCE COULD B E MADE U/S 40(A)(I), IN RESPECT OF PAYMENTS MADE TOWARDS IVTC CHARGES FOR FAILURE TO DEDUCT TAX AT SOURCE U/S 195 OF THE I.T. ACT, 1961, ON THE BASIS OF RETROSPECTIVE AMENDMENT TO THE PROVISION O F SECTION 9(1)(VII) OF THE I.T.ACT, 1961. HENCE, WE DIRECT THE AO TO DE LETE ADDITIONS SGS INDIA PVT.LTD. 6 MADE TOWARDS DISALLOWANCES OF IVTC CHARGES U/S 40(A )(I) OF THE I.T.ACT, 1961. 9. THE NEXT ISSUE THAT CAME UP OF OUR CONSIDERATION FROM GROUND NO.2 OF ASSESSEE APPEAL IS REIMBURSEMENT OF EXPENSE S INCURRED IN PROVIDING TECHNICAL SERVICES. WE FIND THAT WHEN PAY MENTS MADE FOR FTS IS NOT LIABLE FOR DISALLOWANCES U/S 40(A)(I) OF THE I.T.ACT, 1961 FOR FAILURE TO DEDUCT TAX AT SOURCE U/S 195 OF THE I.T .ACT, 1961, THEN THE CONSEQUENT REIMBURSEMENT OF EXPENSES IN RELATION T O PROVIDING SAID TECHNICAL SERVICES CANNOT BE DISALLOWED U/S 40(A)(I ) OF THE I.T.ACT, 1961, FOR FAILURE TO DEDUCT TAX AT SOURCE U/S 195 O F THE I.T.ACT, 1961. THEREFORE, BY RESPECTFULLY FOLLOWING THE DECISION O F HONBLE BOMBAY HIGH COURT IN THE CASE OF CIT VS KPMG, WE DIRECT TH E AO TO DELETE ADDITIONS MADE TOWARDS REIMBURSEMENT OF EXPENSES U/ S 40(A)(I) OF THE I.T.ACT, 1961. 10. IN THE RESULT, APPEAL FILED BY THE ASSESEE AND CONSEQUENT GROUND NO.1 AND 2 ARE TREATED AS ALLOWED IN TERMS O F OUR OBSERVATIONS GIVEN HEREINABOVE. IT(T.P).A.NO. 2512/MUM/2017 FOR AY 2009-10 11. THE ASSESEE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL: TRANSFER PRICING ADJUSTMENT IN RELATION TO PROVISIO N OF EXPENSES ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN L AW, THE TPO ERRED AND CIT[A) FURTHER ERRED IN DETERMINING THE ARM'S L ENGTH PRICE (OR PROVISION OF EXPENSES TO THE EXTENT OF INR 12, 00,0 00 AS NIL THE APPELLANT PRAYS THAT THERE OUGHT NOT TO BE ANY ADDI TION M AY 2009-10 AS THE APPELLANT ITSELF HAS WRITTEN BACK THE SAID PROV ISION AMOUNT IN AY 2010-11. SGS INDIA PVT.LTD. 7 DISALLOWANCE UNDER SECTION 40(A)(I) OF THE INCOME T AX ACT,, 1961 WITH RESPECT TO INSPECTION., VERIFICATION, TESTING AND CERTIFICATION SERVICES (IVTC') CHARGES REIMBURSEMENTS _OF EXPENSE S AND TRAINING 2. ON THE FACTS AND IN THE CIRCUMSTANCES; OF THE CASE AND IN LAW, THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS) - 58, MUMBAI ['CIT (A)'] HAS ERRED IN CONFIRMING DISALLOWANCE OF RS.17,91,49 8 MADE BY AO UNDER SECTION 40(A)(I) OF THE INCOME TAX ACT. 1961 ('ACT' ) ON ACCOUNT OF NON- DEDUCTION OF TDS IN RESPECT OF INSPECTION, VERIFICA TION, TESTING AND CERTIFICATION SERVICES ('IVTC') CHARGES. 3. ON THE FACTS AND M THE CIRCUMSTANCES OF THE CAS E AND IN LAW, THE LEARNED CIT(A) HAS ERRED IN CONFIRMING DISALLOWANCE OF RS. 34,31,334 MADE BY AO UNDER SECTION 40(A)(I) OF THE ACT ON ACC OUNT N ON -DEDUCTION OF TDS M RESPECT OF REIMBURSEMENT OF EXPENSE INCURR ED IN CONNECTION WITH IVTC SERVICES. 4. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AND IN LAW, THE LEARNED CIT(A) HAS ERRED IN CONFIRMING DISALLOWANCE OF RS 12,00,882 MADE BY AO UNDER SECTION 40(A)(I) OF THE ACT ON ACC OUNT OF NON- DEDUCTION OF TDS IN. RESPECT OF TRAINING EXPENSES. 5. WITHOUT PREJUDICE TO THE ABOVE GROUNDS. ON THE F ACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW. THE LEARNED C IT(A) HAS ERRED IN CONFIRMING DISALLOWANCE OF ENTIRE TRANSACTION AMOUN T MADE BY AO U/S 40(A)(I) OF THE ACT WITH RESPECT TO GROUND NO. 1. G ROUND NO 2 AND GROUND NO 3 ABOVE, WITHOUT APPRECIATING THAT DISALLOWANCE U/S 40(A)(I) OF THE ACT WOULD APPLY ONLY TO AMOUNTS WHICH ARE OUTSTANDING A S ON 31 ST MARCH 2009. 6. WITHOUT PREJUDICE TO THE ABOVE GROUNDS, ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LEARNED C IT(A) HAS ERRED M CONFIRMING DISALLOWANCE OF ENTIRE TRANSACTION AMOUN T MADE BY AO U/S 40(A)(I) OF THE ACT WITH RESPECT TO GROUND NO 1, GR OUND NO 2 AND GROUND NO 3 ABOVE, WITHOUT APPRECIATING THAT AS PER DTAA, FEES FOR TECHNICAL SERVICES ARE TAXABLE ONLY ON PAYMENT BASIS AND THER EFORE DISALLOWANCE U/S 40(A)(I) OF THE ACT WOULD APPLY ONLY TO EXTENT OF PAYMENTS ACTUALLY MADE DURING THE YEAR UNDER CONSIDERATION. 7. WITHOUT PREJUDICE TO THE ABOVE GROUNDS. ON THE F ACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LEARNED C IT(A) HAS ERRED IN NOT RESTRICTING THE DISALLOWANCE WITH RESPECT TO IV TC CHARGES, REIMBURSEMENTS OF EXPENSES AND TRAINING EXPENSES ON WHICH TDS HAS NOT BEEN DEDUCTED, TO 30% ON THE BASIS OF FOLLOWING . A) THE AMENDMENT SECTION 40(A)(IA) OF THE ACT, BROU GHT BY THE FINANCE (NO 2) ACT, 2014, SHOULD BE APPLIED RETROSP ECTIVELY FROM 1 APRIL 2005. SGS INDIA PVT.LTD. 8 B) BY APPLYING NON-DISCRIMINATION ARTICLE PROVIDE D UNDER THE DTAA'S, IN THE EVENT OF NON-DEDUCTION OF TAX AT SOU RCE WHILE MAKING PAYMENT TO NON-RESIDENT, THE DISALLOWANCE SH OULD BE RESTRICTED TO 30% OF THE AMOUNT. DENYING THE BENEFIT OF ARTICLE 10 OF THE INDIA SWIT ZERLAND DTAA: 8. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AND IN LAW, THE AO AS WELL AS LEARNED CIT(A) HAS ERRED IN NOT GRANTING THE BENEFIT OF ARTICLE 10 OF THE INDIA SWITZERLAND DOUBLE TAXATION AVOIDAN CE AGREEMENT FOR DETERMINING DIVIDEND DISTRIBUTION TAX (DDT) LIABI LITY UNDER SECTION 115-O ON DISTRIBUTION OF DIVIDEND TO SWISS SHAREHOLDER. T HE AO AS WELL AS CIT(A) ERRED IN NOT APPRECIATING THAT THE APPELLANT IS LIABLE TO PAY DDT AT THE BENEFICIAL RATE OF 10% (AS PER INDIA-SWISS DTA A) AS AGAINST @16.995% (AS PER SECTION 115-O OF THE ACT). 8.1 ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LEARNED AO AS WELL AS CIT(A) HAS ERRED IN NOT GRANT ING REFUND WITH RESPECT TO DDT PAID IN EXCESS OF 10% AMOUNTING TO R S. 1,39,90,000 (I.E. RS 20,00,00,000 @ 6.995%). PENALTY: 9. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW. THE AO ERRED IN INITIATING PENALTY PROCEEDINGS UNDER SE CTION 271(1)(C) OF THE ACT AND THE LEARNED CIT(A) ERRED IN NOT ADJUDICATIN G ON THE SAID GROUND. RELIEF YOUR APPELLANT, THEREFORE, RESPECTFULLY PRAYS TO DI RECT THE LEARNED AO TO A) MODIFY THE ASSESSMENT ORDER TO THE ABOVE EXTENT AND B) GRANT OTHER RELIEF DEEMED NECESSARY 12. THE FIRS TISSUE THAT CAME UP FOR OUR CONSIDERAT ION FROM GROUND NO.1 OF ASSESSEE APPEAL IS TP ADJUSTMENT IN RELATIO N TO PROVISION OF EXPENSES AMOUNTING TO RS. 12 LACKS. THE LD. AR FOR THE ASSESSEE, AT THE TIME OF HEARING MADE IT CLEAR THAT THE ASSES SEE DO NOT WANT TO PRESS THE GROUNDS NO.1 RELATING TO TP ADJUSTMENT AN D HENCE, THE SAME IS DISMISSED AS NOT PRESSED. 13. THE NEXT ISSUE THAT CAME UP FOR OUR CONSIDERATI ON FROM GROUND NO. 2, 3 AND 6 OF ASSESSEE APPEAL IS DISALLOWANCES OF REMITTANCES OF PAYMENT TOWARDS IVTC SERVICES CHARGES AND CONSEQUEN T REIMBURSEMENT OF EXPENSES U/S 40(A)(I) OF THE I.T.A CT, 1961 FOR FAILURE TO DEDUCT TAX AT SOURCE U/S 195 OF THE I.T. ACT, 1961. WE FIND THAT AN IDENTICAL ISSUE HAS BEEN CONSIDERED BY US I N ASSESSEES OWN CASE FOR AY 2008-09 IN ITA NO. 6974/MUM2014, WHERE BY FOLLOWING SGS INDIA PVT.LTD. 9 THE DECISION OF HONBLE BOMBAY HIGH COURT IN THE CA SE OF CIT VS KPMG (SUPRA) HELD THAT A RETROSPECTIVE AMENDMENT CA NNOT FASTEN OBLIGATION TO DEDUCT TAX WHEN NOT IN FORCE AT THE R ELEVANT TIME, I.E. WHEN PAYMENT WAS MADE. CONSEQUENTLY, A PARTY CANNOT BE CALLED UPON TO PERFORM AN IMPOSSIBLE ACT I.E TO COMPLY WIT H PROVISION, WHICH WAS NOT IN FORCE AT THE RELEVANT TIME. THUS, THERE COULD BE NO OBLIGATION TO DEDUCT TAX AT SOURCE, WHEN THE PAYMEN T HAVE BEEN MADE TO THE SERVICES PROVIDERS ABROAD IN THE ABSENC E OF SPECIFIC PROVISION AT THE TIME, WHEN THE PAYMENT WERE MADE. CONSEQUENTLY, NO DISALLOWANCES MADE U/S 40(A)(I) OF THE I.T.ACT, 1961 FOR FAILURE TO DEDUCT TAX AT SOURCE U/S 195 OF THE I.T.ACT, 1961. THEREFORE, CONSISTENT WITH VIEW TAKEN BY THE COORDINATE BENCH, WE DIRECT THE AO TO DELETE ADDITIONS TOWARDS DISALLOWANCES OF IVTC S ERVICES CHARGES AND CONSEQUENT REIMBURSEMENT OF EXPENSES U/S 40(A)( I) OF THE I.T.ACT, 1961. INSOFAR AS, GROUND NO.6 IS CONCERNED , WE FIND THAT THE ASSESSEE HAS TAKEN A ALTERNATIVE GROUND WITHOUT PRE JUDICE TO THE MAIN GROUND OF NO DISALLOWANCES U/S 40(A)(I) AND CO NSEQUENTLY, THE ALTERNATIVE GROUND TAKEN BY THE ASSESSEE IS DISMISS ED AS INFRUCTUOUS. 14. THE NEXT ISSUE THAT CAME UP FOR OUR CONSIDERATI ON FROM GROUND NO.4 OF ASSESSEE APPEAL IS DISALLOWANCES OF TRAININ G CHARGES U/S 40(A)(I), FOR FAILURE TO DEDUCT TAX AT SOURCE U/S 195 OF THE ACT, 961. THE ASSESSEE CLAIMS THAT TRAINING RENDERED OUTSIDE INDIA BY NON- RESIDENTS ARE NOT LIABLE TO TDS IN INDIA, WHEN PAYM ENTS WERE MADE ALTHOUGH, THE SAID PROVISIONS HAVE BEEN RETROSPECT IVELY AMENDED BY THE FINANCE ACT, 2010 W.E.F FINANCIAL YEAR 1976. WE FIND THAT AN IDENTICAL ISSUE HAD BEEN CONSIDERED BY US, IN LIGHT OF AMENDED PROVISION OF SECTION 9(1)(VII) OF THE I.T.ACT, 1961 BY THE FINANCE ACT , SGS INDIA PVT.LTD. 10 2010 WITH RETROSPECTIVE EFFECT FROM 1976 AND BY FO LLOWING THE DECISION OF HONBLE BOMBAY HIGH COURT, IN THE CASE OF CIT VS KPMG. (SUPRA) HELD THAT A PARTY CANNOT BE CALLED UP ON TO PERFORM AN IMPOSSIBLE ACT I.E TO COMPLY WITH THE PROVISION, W HICH WAS NOT IN FORCE AT THE RELEVANT TIME. CONSEQUENTLY, THERE COU LD BE NO OBLIGATION TO DEDUCT TAX AT SOURCE, WHEN THE PAYMEN TS HAVE BEEN MADE TO THE SERVICES PROVIDERS OUTSIDE INDIA, IN TH E ABSENCE OF A SPECIFIC PROVISION AT THE TIME, WHEN THE PAYMENTS W ERE MADE AND HENCE, THE SAID PAYMENTS CANNOT BE DISALLOWED U/S 4 0(A)(I) OF THE I.T.ACT, 1961 FOR FAILURE TO DEDUCT TAX AT SOURCE 195 OF THE I.T.ACT, 1965. THEREFORE, CONSISTENT WITH VIEW TAKEN BY THE COORDINATE BENCH IN ASSESSEE OWN CASE, WE ARE OF THE CONSIDERED VIEW THAT THERE CANNOT BE ANY DISALLOWANCES OF TRAINING CHARGES U/S 40(A)(I) OF THE ACT, FOR FAILURE TO DEDUCT TAX AT SOURCE U/S 195 OF THE ACT, AND HENCE, WE DIRECT THE AO TO DELETE ADDITIONS MADE TOWARDS D ISALLOWANCES OF TRAINING CHARGES U/S 40(A)(I) OF THE I.T.ACT, 1961. 15. THE NEXT ISSUE THAT CAME UP FOR OUR CONSIDERATI ON FROM GROUND NO.7 OF ASSESSEE APPEAL IS RESTRICTION OF DISALLOWA NCES OF IVTC SERVICES AND REIMBURSEMENT RELATING TO IVTC SERVICE S AND TRAINING CHARGES TO 30% OF AMOUNTS PAID DURING THE FINANCIAL YEAR AND BALANCE AMOUNT PAYABLE IS NOT LIABLE FOR DISALLOWAN CES. THE LD. AR FOR THE ASSESEE, AT THE TIME OF HEARING, SUBMITTED THAT THIS ISSUE IS COVERED AGAINST THE ASSESEE BY THE DECISION OF ITAT IN ASSESSEES OWN CASE FOR AY 2008-09 IN ITA NO. 6974/MUM/2014, W HERE IT WAS HELD THAT THE AMENDMENT TO SECTION 40(A)(IA) RESTRI CTING DISALLOWANCES TO 30% OF THE AMOUNT PAID SHOULD NOT BE MADE APPLICABLE RETROSPECTIVELY, SINCE IT IS CLARIFICATO RY IN NATURE WAS DECIDED AGAINST THE ASSESSEE. SGS INDIA PVT.LTD. 11 16. HAVING CONSIDERED ARGUMENTS OF BOTH THE SIDES, WE FIND THAT THE TRIBUNAL HAD DECIDED ISSUE AGAINST THE ASSESSEE , IN LIGHT OF ARTICLE 24(3) OF THE TREATY AND ALSO, AMENDED PROVI SION OF SECTION 40(A)(IA) OF THE I.T.ACT, 1961 AND HELD THAT THE AM ENDMENT TO SECTION 40(A)(IA) BROUGHT BY THE FINANCE ACT,2014, RESTRICTING THE DISALLOWANCES TO 30% OF THE AMOUNT PAID IS SUBSTANT IVE AND NOT CLARIFICATORY, HENCE, WILL HAVE NO RETROSPECTIVE OP ERATION. THEREFORE, CONSISTENT WITH VIEW TAKEN BY THE COORDINATE BENCH IN ASSESSEES OWN CASE, WE REJECT GROUND TAKEN BY THE ASSESEE. 17. THE NEXT ISSUE THAT CAME UP FOR OUR CONSIDERATI ON FROM GROUND NO.8 OF ASSESEE APPEAL IS DENYING THE BENEFIT OF AR TICLE 10 OF THE INDIA-SWITZERLAND DTAA IN RESPECT OF DIVIDEND DISTR IBUTION TAX, WHETHER IT CAN BE LEVIED @10% AS PER ARTICLE 10 OF INDIA-SWITZERLAND DTAA ARE @ 16.995%, AS PER THE I.T.ACT, 1961 AND CO NSEQUENT REFUND WITH RESPECT TO EXCESS TAX PAID TOWARDS DIVI DEND DISTRIBUTION TAX. THE LD. AR FOR THE ASSESSEE SUBMITTED THAT THI S ISSUE HAS BEEN SET ASIDE TO THE FILE OF THE CIT(A) FOR FRESH CONSI DERATION AND ACCORDINGLY, FOR THIS YEAR ALSO, THE SAME MAY BE SE T ASIDE TO THE FILE OF THE CIT(A) FOR FRESH ADJUDICATION. 18. WE HAVE HEARD BOTH THE PARTIES, PERUSED THE MAT ERIAL AVAILABLE ON RECORD AND GONE THROUGH AND ORDERS OF THE AUTHOR ITIES BELOW. WE FIND THAT AN IDENTICAL HAS BEEN CONSIDERED BY TRIBU NAL FOR AY 2008- 09 IN ASSESSEE OWN CASE AND AFTER CONSIDERING RELEV ANT FACTS, THE ISSUE HAS BEEN SET ASIDE TO THE FILE OF THE LD.CIT( A) FOR FRESH CONSIDERATION. THE RELEVANT FINDINGS OF THE TRIBUNA L ARE AS UNDER:- SGS INDIA PVT.LTD. 12 WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED TH E MATERIAL AVAILABLE ON RECORD. UNDISPUTEDLY, IN THE RETURN OF INCOME FI LED ASSESSEE HAS COMPUTED DDT @ 15% ON THE DIVIDEND OF ` 35.95 CRORE PAYABLE TO SGS, SWITZERLAND, IN TERMS OF PROVISIONS CONTAINED UNDER SECTION 115O OF THE ACT. IT IS ALSO RELEVANT TO OBSERVE, IN THE COURSE OF ASSESSMENT PROCEEDINGS, THE ASSESSEE HAS NOT RAISED ANY ISSUE WITH REGARD TO THE APPLICABLE RATE OF DDT. IN THE COURSE OF HEARING BE FORE THE FIRST APPELLATE AUTHORITY, THE ASSESSEE HAD RAISED AN ADDITIONAL GR OUND CLAIMING THAT THE DDT PAID UNDER SECTION 115O IS EXCESS OF THE AMOUNT ACTUALLY PAYABLE BY THE ASSESSEE ON THE DIVIDEND DECLARED IN TERMS O F ARTICLE10 OF THE INDIA SWITZERLAND DTAA. AS COULD BE SEEN FROM THE S UBMISSIONS OF THE ASSESSEE, THE PREMISES ON WHICH SUCH CLAIM HAS BEEN MADE IS DDT IS NOTHING BUT A TAX ON DIVIDEND, THEREFORE, THE PROVI SIONS CONTAINED UNDER ARTICLE10 OF INDIA SWITZERLAND DTAA WOULD APPLY. I T IS THE CONTENTION OF THE ASSESSEE THAT SINCE AS PER THE ARTICLE10(2) OF THE DTAA, ON DIVIDEND IS CHARGEABLE AT THE MAXIMUM RATE OF 10% OF THE DIV IDEND INCOME, THE ASSESSEE SHOULD GET BENEFIT OF THE DTAA IN TERMS OF SECTION 90 OF THE ACT. BEFORE WE PROCEED TO EXAMINE THE VALIDITY OF A SSESSEES CLAIM, IT IS NECESSARY TO OBSERVE THAT SECTION 115O, PROVIDES TH AT IF A DOMESTIC COMPANY IN ANY ASSESSMENT YEAR DECLARES DIVIDEND OR PAYS ANY AMOUNT BY WAY OF DIVIDEND OUT OF CURRENT OR ACCUMULATED PR OFITS, THEN, IN SUCH CASE IN ADDITION TO INCOME TAX CHARGEABLE IN RESPEC T OF THE INCOME OF THE DOMESTIC COMPANY, AN ADDITIONAL INCOME TAX COMPUTED @ 15% OF THE DIVIDEND AMOUNT SHALL ALSO BE CHARGED. THUS, ON A P LAIN READING OF THE AFORESAID PROVISIONS, IT APPEARS THAT THE DDT IS A LIABILITY OF THE DOMESTIC COMPANY DECLARING DIVIDEND AND NOT LIABILITY OF THE SHAREHOLDER RECEIVING SUCH DIVIDEND INCOME. WHEREAS, CAREFUL READING OF A RTICLE10 OF INDIA SWITZERLAND TREATY PRIMAFACIE GIVES AN IMPRESSION THAT IT SPEAKS OF TAXABILITY OF THE DIVIDEND AT THE HANDS OF THE RECI PIENT OF SUCH DIVIDEND WHICH IS A RESIDENT OF THE OTHER CONTRACTING STATE. THEREFORE, KEEPING IN PERSPECTIVE THE PROVISIONS CONTAINED UNDER SECTION 115O VISAVIS ARTICLE10 OF DTAA IT NEEDS TO BE EXAMINED WHETHER THE BENEFIT OF TAX TREATY CAN BE EXTENDED TO THE DDT PAID / PAYABLE BY THE ASSESSEE. WE HAVE NOTED, THE VARIOUS PROPOSITION ADVANCED BY THE ASSESSEE CLAIMING BENEFIT UNDER ARTICLE10 OF INDIA SWITZERLAND DTAA AS CONTAINED IN THE WRITTEN NOTES ARE NOTHING BUT REPETITION OF SUBMISS IONS MADE BEFORE THE LEARNED COMMISSIONER (APPEALS) ON 20 TH FEBRUARY 2014, A COPY OF WHICH IS AT PAGE112 OF THE PAPER BOOK. THOUGH, READING O F ARTICLE10 OF INDIA SWITZERLAND DTAA PRIMAFACIE GIVES AN IMPRESSION TH AT IT WILL ONLY APPLY TO NONRESIDENT SHAREHOLDER RECEIVING THE DIVIDEND, HOWEVER, STILL IT LEAVES A SCOPE FOR EXAMINING THE CLAIM OF THE ASSES SEE THAT DDT BEING A TAX ON DIVIDEND, ARTICLE10 OF THE DTAA WOULD BE AP PLICABLE EVEN IF SUCH DIVIDEND IS PAYABLE BY THE DOMESTIC COMPANY. IN OUR VIEW, IT WILL BE TOO SIMPLISTIC TO REJECT THE CONTENTION OF THE ASSESSEE ON THE PLEA THAT IT WILL ONLY APPLY WHERE THE NONRESIDENT RECIPIENT OF DIVI DEND INCURS THE LIABILITY IN RESPECT OF DIVIDEND. IN OUR CONSIDERED OPINION, THE LEARNED COMMISSIONER (APPEALS), THOUGH, WAS REQUIRED TO DEA L WITH ALL PROPOSITIONS ADVANCED BY THE ASSESSEE, HE HAS NOT D ONE SO. THEREFORE, WE ARE INCLINED TO RESTORE THE MATTER BACK TO THE F ILE OF THE LEARNED COMMISSIONER (APPEALS) FOR FRESH CONSIDERATION AFTE R REASONABLE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. SGS INDIA PVT.LTD. 13 19. IN THIS VIEW OF THE MATTER AND CONSISTENT WITH VIEW TAKEN BY THE COORDINATE BENCH , WE RESTORED THIS ISSUE TO THE FI LE OF THE LD.CIT(A) FOR FRESH CONSIDERATION, IN LIGHT OF OBSERVATIONS OF THE TRIBUNAL FOR THE AY 2008-09 20. IN THE RESULT, APPEAL FILED BY THE ASSESSEE IS PARTLY ALLOWED FOR STATISTICAL PURPOSE. ITA NO. 2513/MUM/2017 FOR AY 2010-11:- 21. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS O F APPEAL:- DISALLOWANCE UNDER SECTION 40(A)(I) OF THE INCOME T AX ACT, 1961 WITH RESPECT TO INSPECTION, VERIFICATION. TESTING AND CE RTIFICATION SERVICES (IVTC) CHARGES AND REIMBURSEMENTS OF OTHER CHARGES 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AND IN LAW, THE LEARNED COMMISSIONER OF INCOME-LAX (APPEALS) - 58, MUMBAI ['CIT (AH HAS ERRED IN NOT DELETING THE VOLUNTARY DISALLO WANCE MADE BY THE APPELLANT, UNDER PROTEST, IN THE REVISED RETURN OF INCOME AMOUNTING TO RS 26,97,547. THE CIT(A) HAS FURTHER E RRED IN CONFIRMING ADDITIONAL DISALLOWANCE OF RS.1,66,588 M ADE BY AO, UNDER SECTION 40(A)(I) OF THE INCOME TAX ACT, 1961 ('ACT') ON ACCOUNT OF NON-DEDUCTION OF TDS IN RESPECT OF INSPE CTION, VERIFICATION. TESTING AND CERTIFICATION SERVICES (' IVTC') CHARGES. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE AND IN LAW, THE LEARNED CIT(A) HAS ERRED IN NOT DELETING THE VOLUNT ARY DISALLOWANCE MADE BY THE APPELLANT, UNDER PROTEST, IN THE REVISE D RETURN OF INCOME AMOUNTING TO RS 1,24,01.925, THE CIT(A) HAS FURTHER ERRED IN CONFIRMING ADDITIONAL DISALLOWANCE OF RS 7,75,20 3 MADE BY AO. UNDER SECTION 40(A)(I) OF THE ACT ON ACCOUNT OF NON -DEDUCTION OF TDS IN RESPECT OF REIMBURSEMENT OF EXPENSES INC URRED IN CONNECTION WITH 1VTC SERVICES. 3. WITHOUT PREJUDICE TO THE ABOVE GROUNDS, ON THE F ACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LEARNED C IT(A) HAS ERRED IN CONFIRMING DISALLOWANCE OF ENTIRE TRANSACTION MA DE BY AO U/S 40(A)(I) OF THE ACT WITH RESPECT TO GROUND NO 1 AND GROUND NO.2, SGS INDIA PVT.LTD. 14 WITHOUT APPRECIATING THAT DISALLOWANCE U/S 40(A)(I) WOULD APPLY ONLY TO AMOUNTS WHICH ARE OUTSTANDING AS ON 31 ST MARCH 2010. 4. WITHOUT PREJUDICE TO THE ABOVE GROUNDS, ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LEARNED C IT(A) HAS ERRED IN CONFIRMING DISALLOWANCE OF ENTIRE TRANSACTION MA DE BY AO U/S 40(A)(I) OF THE ACT WITH RESPECT TO GROUND NO.1 AND GROUND NO R 2, WITHOUT APPRECIATING THAT AS PER DTAA, FEES FOR TEC HNICAL SERVICES ARE TAXABLE ONLY ON PAYMENT BASIS AND THEREFORE DIS ALLOWANCE U/S 40(A)(I) WOULD APPLY ONLY TO EXTENT OF PAYMENTS ACT UALLY MADE DURING THE YEAR UNDER CONSIDERATION . 5 WITHOUT PREJUDICE TO THE ABOVE GROUNDS, O N THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LEARNED C IT (A) HAS ERRED IN NOT RESTRICTING THE DISALLOWANCE WITH RESPECT OF IV TC CHARGES ARID RE- IMBURSEMENTS OF EXPENSES ON WHICH TDS HAS NOT BEEN DEDUCTED, TO 30% ON THE BASIS OF FOLLOWING: A) THE AMENDMENT TO SECTION 40(A)(IA) OF THE ACT, BROUGHT BY THE FINANCE (NO. 2) ACT, 2014. SHOULD BE APPLIED RETROS PECTIVELY FROM 1 APRIL 2005. B) BY APPLYING NON-DISCRIMINATION ARTICLE PROVIDE D UNDER THE DTAAS, IN THE EVENT OF NON-DEDUCTION OF TAX AT SOU RCE WHILE MAKING PAYMENT LO NON-RESIDENT, THE DISALLOWANCE SH OULD BE RESTRICTED TO 30% OF THE AMOUNT. DENYING THE BENEFIT OF ARTICLE 10 OF THE INDIA SWI TZERLAND DTAA; 6. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AND IN TAW, THE AO AS WELL AS LEARNED CIT(A) HAS ERRED IN NOT GRANTING THE BENEFIT OF ARTICLE 10 OF THE INDIA SWITZERLAND DOUBLE TAXATION AVOIDAN CE AGREEMENT FOR DETERMINING DIVIDEND DISTRIBUTION TAX ['DDT'] LIABI LITY UNDER SECTION 115-O ON DISTRIBUTION OF DIVIDEND TO SWISS SHAREHOLDER. T HE AO AS WELL AS CIT(A) ERRED IN NOT APPRECIATING THAT THE APPELLANT IS LIABLE TO PAY DDT AT THE BENEFICIAL RATE OF 10% (AS PER INDIA-SWISS DTAA ) AS AGAINST 16.995% (AS PER SECTION 115-O OF THEACT.). 6.1 ON THE FADS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LEARNED CLT (A) HAS ERRED IN NOT GRANTING REFUND WI TH RESPECT TO DDT PAID IN EXCESS O( 10% AMOUNTING TO RS. 1,88, 86,500 (I.E . RS.27,00,00,000 @ 6.995%). PENALTY: 7. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AND IN LAW, THE AO ERRED IN INITIATING PENALTY PROCEEDINGS UNDER SECTI ON 271(1) OF THE ACT AND THE LEARNED CIT(A) ERRED IN NOT ADJUDICATING ON THE SAID GROUND. RELIEF SGS INDIA PVT.LTD. 15 YOUR APPELLANT, THEREFORE, RESPECTFULLY PRAYS TO DI RECT THE LEARNED AO TO: A) MODIFY THE ASSESSMENT ORDER TO THE ABOVE EXTEN T AND B) GRANT OTHER RELIEF DEEMED NECESSARY; THE APPELLANT CRAVES LEAVE TO ADD, ALTER, AMEND OR WITHDRAW ALL CR ANY OF THE GROUNDS OF APPEAL HEREIN AND TO SUBMIT SUCH STA TEMENTS, DOCUMENTS AND PAPERS AS MAY BE CONSIDERED NECESSARY EITHER AT OR BEFORE THE APPEAL HEARING. 22. THE FIRST ISSUE THAT CAME UP FOR OUR CONSIDERAT ION FROM GROUND NO. 1, 2 AND 4 OF THE ASSESEE APPEAL IS DISALLOWANC ES OF IVTC SERVICE CHARGES AND CONSEQUENT DISALLOWANCES OF RE IMBURSEMENT OF EXPENDITURE U/S 40(A)(I) OF THE I.T.ACT, 1961 FOR F AILURE TO DEDUCT TAX AT SOURCE U/S 195 OF THE ACT, 961. WE FIND THAT AN IDENTICAL ISSUE HAS BEEN CONSIDERED BY US IN ASSESSEE OWN CASE FOR AY 2 008-09 IN PRECEDING PARAGRAPHS IN ITA NO.6974/MUM/2014.THE RE ASONS GIVEN BY US IN PRECEDING PARAGRAPH IN ITA NO.6974/MUM/201 4 SHALL MUTATIS MUTANDIS APPLY TO THIS APPEAL ALSO. THEREFO RE, FOR SIMILAR REASONS, WE DIRECT THE LD.AO TO DELETE ADDITIONS MA DE TOWARDS DISALLOWANCE OF IVTC SERVICE CHARGES AND CONSEQUENT REIMBURSEMENT OF EXPENSES U/S 40(A)(I) FOR FAILURE TO DEDUCT TAX AT SOURCE U/S. 195 OF THE ACT, 1961. 23. THE NEXT ISSUE THAT CAME UP FOR OUR CONSIDERATI ON FROM GROUND NO.5 OF ASSESSEE APPEAL IS RESTRICTION OF DISALLOWA NCES OF IVTC SERVICES AND REIMBURSEMENT CHARGES RELATING TO IVTC SERVICES TO 30% OF AMOUNT PAID DURING THE FINANCIAL YEAR AND BA LANCE AMOUNT PAYABLE IS NOT LIABLE FOR DISALLOWANCE. WE FIND TH AT AN IDENTICAL ISSUE HAS BEEN CONSIDERED BY US IN IT(TP)A. NO. 2572/MUM2 017 FOR AY 2009-10. THE REASONS GIVEN BY US IN PRECEDING PARAG RAPH IN IT(TP)A. NO. 2572/MUM2017 SHALL MUTATIS MUTANDIS AP PLY TO THIS SGS INDIA PVT.LTD. 16 APPEAL ALSO. THEREFORE, FOR SIMILAR REASONS, WE DEC IDE THE ISSUE AGAINST THE ASSESSEE. 24. THE NEXT ISSUE THAT CAME UP FOR OUR CONSIDERATI ON FROM GROUND NO.6 OF ASSESSEE APPEAL IS DENYING THE BENEFIT OF A RTICLE 10 OF THE INDIA-SWITZERLAND DTAA, IN RESPECT OF DIVIDEND DIST RIBUTION TAX PAYABLE. WE FIND THAT AN IDENTICAL ISSUE HAS BEEN C ONSIDERED BY US FOR AY 2009-10 IN IT(TP)A. NO. 2512/MUM/2017. THE R EASONS GIVEN BY US IN PRECEDING PARAGRAPH IT(TP)A NO. 2512/MUM/2 017 SHALL EQUALLY APPLICABLE TO THIS APPEAL ALSO. THEREFORE, FOR SIMILAR REASONS, WE SET ASIDE THE ISSUE TO THE FILE OF THE LD.CIT(A) FOR FRESH ADJUDICATION, IN LIGHT OF THE FINDINGS OF THE TRIBU NAL IN ASSESSEES OWN CASE FOR AY 2008-09. 25. IN THE RESULT, APPEAL FILED BY THE ASSESSEE IS PARTLY ALLOWED FOR STATISTICAL PURPOSE. 26. AS A RESULT, APPEAL FILED BY THE ASSESSEE ITA NO.6974/MUM/2014 FOR AY 2008-09 IS ALLOWED IN TERMS OF OUR OBSERVATIONS GIVEN HEREINABOVE IN SAID APPEAL AND A PPEALS FILED BY THE ASSESSEE IT(T.P)A.NO.2512/MUM/2017 FOR AY 2009- 10 AND ITA. NO. 2513/MUM/2017 FOR AY 2010-11 ARE PARTLY AL LOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 28 / 11/2019 SD/- ( C.N.PRASAD) SD/- (G. MANJUNATHA) JUDICIAL MEMBER ACCOUNTANT MEMBER SGS INDIA PVT.LTD. 17 MUMBAI ; DATED 28 /11/2019 THIRUMALESH SR.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//