ADIT (IT) 3(2), MUMBAI V. EURO RSCG WORLWIDEINC., MUMBAI

ITA 7094/MUM/2010

• Counselvise Citation: [2012] 119 COUNSELVISE.COM (IT) 9490 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 1 month(s) 13 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-11-2012
• Appeal Filed By: Department
• Order Result: Partly Allowed
• Bench Allotted: L
• Next Hearing Date: 20-11-2012
• Assessment Year: 1999-2000
• Appeal Filed On: 14-10-2010
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Assessee Lawyers: HIMANSHU JAIN
• Keywords: Double taxation relief; Permanent establishment

Judgement Text

ITA NO.7094 OF 2010 EURO RSCG WORLDWODE INC MUMBAI. PAGE 1 OF 8 IN THE INCOME TAX APPELLATE TRIBUNAL 'L' BENCH, MUMBAI BEFORE SHRI B. RAMAKOTAIAH, ACCOUNTANT MEMBER AND SHRI VIJAY PAL RAO, JUDICIAL ME MBER ITA NO.7094/MUM/2010 (ASSESSMENT YEAR: 2010-11) DY. DIRECTOR IT (IT)-3(2), SCINDIA HOUSE, ROOM NO.132, 1 ST FLOOR NM ROAD, MUMBAI 400038 VS. M/S EURO RSCG WORLDWIDE INC. C/O SR BATLIBOI & ASSOCIATES, 18 TH FLOOR, EXPRESS TOWERS, NARIMAN POINT, MUMBAI 400021 PAN: AAACE 5982 C (APPELLANT) (RESPONDENT) DEPARTMENT BY: MS. NEERAJA PRADHAN, DR ASSESSEE BY: SHRI HIMANSHU JAIN DATE OF HEARING: 20/11/2012 DATE OF PRONOUNCEMENT: 27/11/2012 O R D E R PER B. RAMAKOTAIAH, A.M. THIS IS A REVENUE APPEAL AGAINST THE ORDES OF THE CIT (A)-10 MUMBAI DATED 30.07.2010. THE REVENUE HAS RAISED TWO GRUNDS WHICH ARE AS UNDER: 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE AND IN LAW, THE LEARNED CIT (A) ERRED IN DELETING T HE PAYMENT OF ` .27,63,150/- RECEIVED FROM ERAPL FOR PROVIDING ASSISTANCE IN CLIENT COORDINATION AS ROYA LTY UNDER ARTICLE 12 OF INDIA-USA TREATY. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AND IN LAW, THE LEARNED CIT (A) ERRED IN DIRECTING TO T AX @10% INSTEAD OF @15% AS FEES FOR INCLUDED SERVICE ON THE PAYMENT RECEIVED FOR CREATIVE FEES AND DATA BASE CO ST ON AMOUNT OF ` .48,03,630/- AS PROVIDED FOR IN THE INDO-USA DTAA. 2. BRIEF FACTS ARE THAT THE EURO RSCG WORLDWIDE INC, N EW YORK IS A COMPANY INCORPORATED UNDER THE LAWS OF USA. AS SESSEE IS A ITA NO.7094 OF 2010 EURO RSCG WORLDWODE INC MUMBAI. PAGE 2 OF 8 RESIDENT OF USA. ACCORDINGLY AS PER SECTION 90(2) O F THE INCOME TAX ACT, 1961, ASSESSEE HAS OPTED TO BE TAXED AS PER PR OVISIONS OF DOUBLE TAXATION AVOIDANCE AGREEMENT (DTAA) BETWEEN INDIA AND THE USA. EURO RSCG WORLDWIDE INC ACTS AS A COMMUNIC ATING INTERFACE BETWEEN MULTINATIONAL CLIENTS AND VARIOUS EURO ENTITIES EACH IN THE REGION. EURO RSCG WORLDWIDE INC FOR SOM E OF THE KEY MULTINATIONAL CLIENTS OF THE EURO GROUP HAS SET UP A CENTRALIZED GROUP OF PERSONS WHO ACT PRINCIPALLY AS A COMMUNICA TION CHANNEL BETWEEN ANY LOCAL EURO ENTITY AND THE CLIENT. THIS TEAM IS TYPICALLY SERVES AS A COMMON AND CENTRALIZED POINT OF INTERAC TION FOR THE CLIENTS. THIS ENSURES THAT THE WORK PRODUCED IS OF AN INTERNATIONAL STANDARD THAT MEETS THE CLIENTS EXPECTATIONS. EURO WORLDWIDE INC INCURRED COST AS SALARIES, OVERHEADS ETC. IN CONNEC TION WITH THE COORDINATION SERVICES BEING RENDERED BY TEAM TO VAR IOUS EURO ENTITIES. SINCE THE LOCAL EURO ENTITIES BENEFIT FRO M THE CENTRAL COORDINATION SERVICES, EURO WORLDWIDE INC CHARGED T HE LOCAL ENTITY FOR SUCH SERVICES. IN ADDITION, EURO WORLDWIDE INC ON A NEED BASIS PROVIDES BUSINESS DEVELOPMENT AND MANAGERIAL ASSIST ANCE TO THE LOCAL EURO ENTITIES IN THE REGION. DURING THE YEAR UNDER CONSIDERATION ASSESSEE HAS PROVIDED CERTAIN ASSISTA NCE TO EURO RSCG ADVERTISING PRIVATE LIMITED (EARPL) AND INCURR ED CERTAIN COSTS ON BEHALF OF EARPL AND RECEIVED CONSIDERATION OF ` .75,66,780 FOR THE SAID COSTS. THE EURO RSCG WORLDWIDE INC HAS INVOICED THE FOLLOWING AMOUNTS TO ERAPL: PARTICULARS AMOUNTS IN USD AMOUNT IN ` `` ` . CREATIVE FEES 71,000 30,18,210 DATABASE COSTS 42,000 17,85,420 CLIENT COORDINATION FEES 65,000 27,63,150 TOTAL 1,78,000 75,66,780 ITA NO.7094 OF 2010 EURO RSCG WORLDWODE INC MUMBAI. PAGE 3 OF 8 3. ASSESSEE FILED RETURN OF INCOME ON 10-12-1999 SHOWI NG TOTAL INCOME AT NIL CLAIMING THAT THE PAYMENTS RECEIVED F ROM ERAPL ARE TAXABLE AS BUSINESS PROFIT UNDER ARTICLE 7 OF INDIA -US DTAA AND SINCE ASSESSEE HAS NO PE IN INDIA, THE SAID RECEIPT S ARE NOT TAXABLE IN INDIA. AO HOWEVER, DID NOT AGREE AND HELD THAT T HESE AMOUNTS ARE IN THE NATURE OF ROYALTY AND TAXED @15%. 4. IN APPEAL, THE LEARNED CIT (A) CONSIDERED THE NATUR E OF THE SERVICES RENDERED AND THE FEES PAID AND HELD THAT T HE AMOUNT RECEIVED FROM EARPL TOWARDS CLIENT COORDINATION FEE S IS IN THE NATURE OF BUSINESS PROFITS AND SINCE ASSESSEE DOES NOT HAVE A PERMANENT ESTABLISHMENT IN INDIA, THE QUESTION OF T AXABILITY OF IMPUGNED AMOUNT DOES NOT ARISE IN THE ABSENCE OF PE AS PROVIDED FOR IN ARTICLE 7 OF THE DTAA. WITH REFERENCE TO THE CREATIVE FEES AND THE DATABASE COST, THE CIT (A) WAS OF THE OPINION T HAT THEY ARE IN THE NATURE OF FEES FOR INCLUDED SERVICES AS PROVIDED UN DER THE DTAA AND HELD THAT THEY ARE TAXABLE IN INDIA. 5. ASSESSEE HAS ACCEPTED THE FINDINGS OF THE CIT (A) O N THE ABOVE TWO AMOUNTS, WHEREAS REVENUE IS AGGRIEVED ON THE DE LETION OF CLIENT COORDINATION FEE FROM TAXING AS ROYALTY. 6. WE HAVE HEARD THE LEARNED DR AND THE LEARNED COUNSE L. THE REASONS FOR EXCLUDING THE CLIENTS COORDINATION FEES BY THE CIT (A)ARE AS UNDER: 2.2 THE AR SUBMITTED THAT EURO RSCG WORLDWIDE INC ONLY ASSISTS IN COORDINATING AND INTERACTING WITH MULTINATIONAL CLIENTS. EURO RSCG WORLDWIDE INC ACTS AS A COMMUNICATION CHANNEL BETWEEN EARPL AND ITS CLIENTS. CONSEQUENTLY, CLIENT COORDINATION FEES PAI D TO EURO RSCG WORLDWIDE INC CANNOT BE TERMED AS ROYALTI ES SINCE IT IS NOT A CONSIDERATION FOR THE USE OF RIGH T TO USE ANY OF THE SPECIFIED TERMS MENTIONED IN THE DEFINIT ION. FURTHER, THE COPYRIGHT AND THE PROPERTY OF ALL WORK PRODUCTS INCLUDING DEVELOPMENT OF IDEAS AND CREATIV E SERVICES REST WITH THE CLIENTS AND NOT WITH EARPL O R EURO RSCG WORLDWIDE INC. HENCE QUESTION OF EURO RSCG ITA NO.7094 OF 2010 EURO RSCG WORLDWODE INC MUMBAI. PAGE 4 OF 8 WORLDWIDE INC PROVIDING EARPL WITH THE RIGHT TO USE THE COPYRIGHTS DOES NOT ARISE. ALSO THERE IS NO IMPARTI NG OF TECHNICAL KNOWLEDGE/ KNOW-HOW BY ASSESSEE. AOS CONTENTION THAT THE CLIENTS COORDINATION SERVICES R ENDERED BY EURO RSCG WORLDWIDE INC INVOLVE THE USE OF PLAN, SECRET FORMULAE OR PROCESS BY EARPL IS NOT TENABLE. THEREFORE, THE CLIENT COORDINATION FEES ARE NOT ROY ALTY. THE AR FURTHER REFERRED THE TRIBUNAL DECISION IN TH E CASE OF AN ASSOCIATE COMPANY M/S EURO RSCG (S) PTE LTD ( ONE OF THE GROUP COMPANIES OF EURO RSCG WORLDWIDE INC ( ITA NO.7561/MUM/2004 (AY 99-00) DATED 8-10-2009 THE L BENCH OF TRIBUNAL HELD THAT THE AMOUNT OF ` .5,155,840 REPRESENTING AS COORDINATION FEES WAS NOT TAXABLE O N THE GROUND THAT THE ASSESSEE COMPANY DOES NOT HAVE PERMANENT ESTABLISHMENT (COPY OF THE ORDER IS FILED AND PLACED ON RECORD). THE AR ALSO RELIED IN THE CA SE OF CUSHMAN % WAKEFIELD(S)PTE LTD (218 CTR 238) (AAR) WHEREIN IT WAS HELD THAT REFERRAL FEES RECEIVED IN SINGAPORE BY APPLICANT, FROM INDIAN COMPANY IS NOT ROYALTY NOR ACCRUED IN INDIA AND THE APPLICANT HAS NO PE THEREFORE NOT TAXABLE IN INDIA. FURTHER WITHOUT PRE JUDICE, SERVICES RENDERED BY APPELLANT, BEING IN THE NATURE OF COORDINATION SERVICES DO NOT QUALIFY AS FEES FOR IN CLUDED SERVICES AS DEFINED UNDER ARTICLE 12 OF INDIA-US DT AA. 2.3. I HAVE CONSIDERED THE FACTS AND PERUSED THE MATERIAL ON RECORD. AO HAS HELD THAT THE IMPUGNED PAYMENTS ARE ROYALTY AS PER ARTICLE 12 OF DTAA. IT IS SEEN THAT THE ERAPL SERVES CERTAIN MULTINATIONAL CL IENTS IN INDIA WHO HAVE PRINCIPAL OFFICES LOCATED OUTSIDE INDIA AND THE APPELLANT HAS AGREED TO SERVE EARPL TO HELP TO ACT AS COORDINATING AGENCY AS REQUIRED BY SUCH MULTINATIONAL CLIENTS. FOR THIS PURPOSE, THE ERAPL HAS TO PAY TO THE APPELLANT CERTAIN AMOUNT OF ANNUAL BILLI NGS. THUS, THE APPELLANT MAINTAINS COMMUNICATION CHANNEL BETWEEN ERAPL AND ITS CLIENTS THE CLIENT COORDINATI ON FEES PAID TO THE APPELLANT CANNOT BE TERMED AS ROYA LTY BECAUSE IT IS NOT A CONSIDERATION FOR THE USE OF RI GHT OR TO USE ANY OF THE SPECIFIED TERMS MENTIONED IN THE DEFINITION OF ROYALTY UNDER ARTICLE 12 OF INDO US D TAA. THE OBSERVATION OF AO THAT THE CLIENT COORDINATION SERVICES RENDERED BY THE APPELLANT INVOLVE THE USE OF A PLAN, SECRET FORMULA, OR PROCESS BY ERAPL IS WITHOU T ANY BASIS. THE CLIENT COORDINATION FEES CAN BE TAXED AS BUSINESS PROFITS ONLY. SINCE THE APPELLANT ADMITTED LY DOES NOT HAVE A PERMANENT ESTABLISHMENT INDIA, THE QUESTION OF TAXABILITY OF THE IMPUGNED AMOUNT IN IN DIA ITA NO.7094 OF 2010 EURO RSCG WORLDWODE INC MUMBAI. PAGE 5 OF 8 WOULD NOT ARISE IN THE ABSENCE PE, AS PROVIDED FOR IN ARTICLE 7 OF DTAA. IN VIEW OF THESE FACTS, THIS GRO UND OF APPEAL IS DECIDED IN FAVOUR OF THE APPELLANT. NOTHING WAS BROUGHT ON RECORD TO COUNTER THE FINDIN GS OF THE CIT (A). CONSIDERING THE NATURE OF THE PAYMENT AND THE ORDER IN THE GROUP COMPANY BY ITAT WHICH WAS RELIED ON BY THE CI T (A), WE AGREE ON HIS FINDINGS AND DISMISS GROUND NO.1. 7. GROUND NO.2 IS WITH REFERENCE TO THE BENEFIT OF ALL OWING LOWER RATE OF TAX UNDER ARTICLE 12 OF INDO-US DTAA. AS BR IEFLY STATED AO TAXED THE ENTIRE AMOUNT AT 15% AS ROYALTY WHEREAS T HE CIT (A) HELD ONLY TWO AMOUNTS ARE TO BE CONSIDERED AS FEE FOR IN CLUDED SERVICES. HOWEVER, ASSESSEE CONTESTED BEFORE THE CIT(A) THE A PPLICATION OF RATE OF TAX AT 15% AS AN ALTERNATE GROUND STATING T HAT IN CASE THE AMOUNTS ARE HELD AS ROYALTY, THE LOWER RATE OF TAX UNDER ARTICLE 12 OF INDO-US DTAA WILL APPLY. THE CIT (A) WITHOUT MUCH D ISCUSSION DIRECTED AO TO TAX @10% VIDE PARA 4.1 AS UNDER: 4.1. THE AR SUBMITTED THAT THE APPELLANT HAS NOT F ILED TAXES RESIDENCY CERTIFICATE WITH AO AND CONSEQUENTL Y AO DID NOT ALLOW THE LOWER RATE OF TAXATION AS PER PROVISIONS OF DTAA. THE APPELLANT HAS NOW FILED A T RC BEFORE ME. THEREFORE, THERE WOULD BE NO REASON FOR NOT APPLYING THE LAW RATE HAS PROVIDED FOR IN THE INDIA US DOUBLE TAXATION AVOIDANCE AGREEMENT. SINCE I HAVE ALREADY DELETED THE ADDITION OF CLIENTS COORDINATIO N FEES HELD BY AO AS ROYALTY IN GROUND NO.2 ABOVE, THERE WOULD BE A NO QUESTION OF APPLYING ANY TAX RATE ON SUCH AMOUNT. HOWEVER, THE AMOUNTS IN RESPECT OF CREATIVE FEES AND DATABASE COSTS WOULD BE LIABLE TO TAX AT T HE RATE OF 10% AS FEES FOR INCLUDED SERVICES AS PROVID ED UNDER THE DTAA. THIS GROUND OF APPEAL IS DISPOSED O FF ACCORDINGLY. 8. AFTER CONSIDERING THE RIVAL SUBMISSIONS, WE ARE OF THE OPINION THAT THE DIRECTION OF THE CIT (A) IS NOT CORRECT AN D THIS HAS TO BE MODIFIED. THE ARTICLE 12 IS AS UNDER: ARTICLE 12 ROYALTIES AND FEES FOR INCLUDED SERVICES 1. ROYALTIES AND FEES FOR INCLUDED SERVICES ARISING IN A ITA NO.7094 OF 2010 EURO RSCG WORLDWODE INC MUMBAI. PAGE 6 OF 8 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 INCLUDED SERVI CES 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 INCLU DED SERVICES IS A RESIDENT OF THE OTHER CONTRACTING STATE, THE TAX SO CHARGED SHALL N OT EXCEED: (A) IN THE CASE OF ROYALTIES REFERRED TO IN SUB-PAR AGRAPH (A) OF PARAGRAPH 3 AND FEES FOR INCLUDED SERVICES A S DEFINED IN THIS ARTICLE (OTHER THAN SERVICES DESCRI BED IN SUB-PARAGRAPH (B) OF THIS PARAGRAPH): (I) DURING THE FIRST FIVE TAXABLE YEARS FOR WHICH T HIS CONVENTION HAS EFFECT, (A)15 PER CENT OF THE GROSS AMOUNT OF THE ROYALTIES OR FEES FOR INCLUDED SERVICES AS DEFINED IN THIS ARTICLE, W HERE THE PAYER OF THE ROYALTIES OR FEES IS THE GOVERNMENT OF THAT CONTRACTING STATE, A POLITICAL SUB-DIVISION OR A PU BLIC SECTOR COMPANY; AND (B) 20 PER CENT OF THE GROSS AMOUNT OF THE ROYALTIE S OR FEES FOR INCLUDED SERVICES IN ALL OTHER CASES; AND (II) DURING THE SUBSEQUENT YEARS, 15 PER CENT OF TH E GROSS AMOUNT OF ROYALTIES OR FEES FOR INCLUDED SERVICES; AND (B) IN THE CASE OF ROYALTIES REFERRED TO IN SUB-PAR AGRAPH (B) OFF PARAGRAPH 3 AND FEES FOR INCLUDED SERVICES AS DEFINED IN THIS ARTICLE THAT ARE ANCILLARY AND SUBS IDIARY TO THE ENJOYMENT OF THE PROPERTY FOR WHICH PAYMENT IS RECEIVED UNDER PARAGRAPH 3(B) OF THIS ARTICLE, 10 P ER CENT OF THE GROSS AMOUNT OF THE ROYALTIES OR FEES FOR IN CLUDED SERVICES. 3. THE TERM 'ROYALTIES' AS USED IN THIS ARTICLE MEA NS: (A) PAYMENTS OF ANY KIND RECEIVED AS A CONSIDERATIO N FOR THE USE OF, OR THE RIGHT TO USE, ANY COPYRIGHT OF A LITERARY, ARTISTIC, OR SCIENTIFIC WORK, INCLUDING CINEMATOGRA PH FILMS OR WORK ON FILM, TAPE OR OTHER MEANS OF REPRODUCTIO N FOR USE IN CONNECTION WITH RADIO OR TELEVISION BROADCAS TING, ANY PATENT, TRADEMARK, DESIGN OR MODEL, PLAN, SECRE T FORMULA OR PROCESS, OR FOR INFORMATION CONCERNING INDUSTRIAL, COMMERCIAL OR SCIENTIFIC EXPERIENCE, IN CLUDING GAINS DERIVED FROM THE ALIENATION OF ANY SUCH RIGHT OR PROPERTY WHICH ARE CONTINGENT ON THE PRODUCTIVITY, USE, OR DISPOSITION THEREOF; AND (B) PAYMENT OF ANY KIND RECEIVED AS CONSIDERATION F OR THE USE OF, OR THE RIGHT TO USE, THE INDUSTRIAL, COMMER CIAL, OR ITA NO.7094 OF 2010 EURO RSCG WORLDWODE INC MUMBAI. PAGE 7 OF 8 SCIENTIFIC EQUIPMENT, OTHER THAN PAYMENTS DERIVED B Y AN ENTERPRISE DESCRIBED IN PARAGRAPH 1 OF A RTICLE8 (SHIPPING AND AIR TRANSPORT) FROM ACTIVITIES DESCRIBED IN PAR AGRAPH 2(C) OR 3 OR ARTICLE 8. 4. FOR PURPOSES OF THIS ARTICLE, 'FEES FOR INCLUDED SERVICES' MEANS PAYMENTS OF ANY KIND TO ANY PERSON IN CONSIDERATION FOR THE RENDERING OF ANY TECHNICAL OR CONSULTANCY SERVICES (INCLUDING THROUGH THE PROVISI ON OF SERVICES OF TECHNICAL OR OTHER PERSONNEL) IF SUCH S ERVICES: (A) ARE ANCILLARY AND SUBSIDIARY TO THE APPLICATION OR ENJOYMENT OF THE RIGHT, PROPERTY OR INFORMATION FOR WHICH A PAYMENT DESCRIBED IN PARAGRAPH 3 IS RECEIVED; OR (B) MAKE AVAILABLE TECHNICAL KNOWLEDGE, EXPERIENCE, SKILL, KNOW- HOW, OR PROCESSES, OR CONSIST OF THE DEVELOPM ENT AND TRANSFER OF A TECHNICAL PLAN OR TECHNICAL DESIG N. 5. NOTWITHSTANDING PARAGRAPH 4, 'FEES FOR INCLUDED SERVICES' DOES NOT INCLUDE AMOUNTS PAID: (A) FOR SERVICES THAT ARE ANCILLARY AND SUBSIDIARY, AS WELL AS INEXTRICABLY AND ESSENTIALLY LINKED, TO THE SALE OF PROPERTY OTHER THAN A SALE DESCRIBED IN PARAGRAPH 3 (A); (B) FOR SERVICES THAT ARE ANCILLARY AND SUBSIDIARY TO THE RENTAL OF SHIPS, AIRCRAFT, CONTAINERS OR OTHER EQUI PMENT USED IN INTERNATIONAL TRAFFIC; (C) FOR TEACHING IN OR BY EDUCATIONAL INSTITUTIONS; (D) FOR SERVICES FOR THE PERSONAL USE OF THE INDIVI DUAL OR INDIVIDUALS MAKING THE PAYMENT; OR (E) TO AN EMPLOYEE OF THE PERSON MAKING THE PAYMENT S OR TO ANY INDIVIDUAL OR FIRM OF INDIVIDUALS (OTHER THA N A COMPANY) FOR PROFESSIONAL SERVICES AS DEFINED IN AR TICLE 15 (INDEPENDENT PERSONAL SERVICES). 6. AS PER THE ARTICLE 12(2)(B) THE RATE OF 10% IS APPL ICABLE IN THE CASE OF ROYALTY REFERRED TO IN SUB PARAGRAPH OF 3(B) AND FEES FOR INCLUDED SERVICES AS DEFINED UNDER THIS ARTICLE THAT ARE ANC ILLARY AND SUBSIDIARY TO THE ENJOYMENT OF THE PROPERTY FOR WHI CH PAYMENT IS RECEIVED UNDER PARA 3(B) OF ARTICLE. SINCE THE AMOU NTS ARE NOT ROYALTY BEING CONSIDERED EITHER 3(A) OR 3(B), THE R ATE OF 10% ON FIS IS NOT CORRECT. THERE IS NOTHING ON RECORD THAT INDICA TES THAT RATE SPECIFIED UNDER SUB ARTICLE 2 (B) IS APPLICABLE AND NOT 2(A)(II). ITA NO.7094 OF 2010 EURO RSCG WORLDWODE INC MUMBAI. PAGE 8 OF 8 THEREFORE, UPHOLDING THE REVENUE GROUND, WE DIRECT THE AO TO TAX THE ABOVE AMOUNTS CONFIRMED BY CIT(A) AS FIS AT 15% OF THE RATE. GROUND. 2 IS ALLOWED. 9. IN THE RESULT, APPEAL FILED BY THE REVENUE IS PARTL Y ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 27 TH NOVEMBER, 2012. SD/- SD/- (VIJAY PAL RAO) (B. RAMAKOTAIAH) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI, DATED 27 TH NOVEMBER, 2012. VNODAN/SPS COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CONCERNED CIT(A) 4. THE CONCERNED CIT 5. THE DR, L BENCH, ITAT, MUMBAI BY ORDER ASSISTANT REGISTRAR INCOME TAX APPELLATE TRIBUNAL, MUMBAI BENCHES, MUMBAI