DDIT (IT) 2(1), MUMBAI V. REUTERS TRANSACTION SERVICES LTD, MUMBAI

ITA 7341/MUM/2012

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 75629 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 2 month(s) 10 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-02-2014
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: D
• Assessment Year: 2008-2009
• Appeal Filed On: 11-12-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Section: 234B

Judgement Text

, MH MHMH MH INCOME TAX APPELLATE TRIBUNAL,MUMBAI - D BENCH. , MK0 ,L VH ,E IKOYU MK0 ,L VH ,E IKOYU MK0 ,L VH ,E IKOYU MK0 ,L VH ,E IKOYU BEFORE S/SH. RAJENDRA,ACCOUNTANT MEMBER & DR. S.T.M . PAVALAN,JUDICIAL MEMBER /. ITA NO.7342/MUM/2012, ! ! ! ! / ASSESSMENT YEAR-2005-06 DCIT (IT) 2(1) R.NO.120, SCINIDA HOUSE, 1 ST FLOOR, BALLARD ESTATE, N.M.ROAD, MUMBAI-400038 VS REUTERS TRANSACTION SERVICES LTD. C.O. BMR & ASSOCIATES, 3F, CONTRACTOR BLDG. 41R KAMANI MARG, BALLARD ESTATE, MUMBAI-400001 PAN:AACCR0226Q ( '# / APPELLANT) ( $%'# / RESPONDENT) /. ITA NO.7341/MUM/2012, ! ! ! ! / ASSESSMENT YEAR-2008-09 DDIT (IT) 2(1) R.NO.120, SCINIDA HOUSE, 1 ST FLOOR, BALLARD ESTATE, N.M.ROAD, MUMBAI-400038 VS REUTERS TRANSACTION SERVICES LTD. C.O. BMR & ASSOCIATES, 3F, CONTRACTOR BLDG. 41R KAMANI MARG, BALLARD ESTATE, MUMBAI-400001 PAN:AACCR0226Q ( '# / APPELLANT) ( $%'# / RESPONDENT) & ' / REVENUE BY : SHRI SANJEEV JAIN () ' / ASSESSEE BY : SHRI JITENDRA JAIN & && & )* )* )* )* / DATE OF HEARING : 19-02-2014 +,! & )* / DATE OF PRONOUNCEMENT : 21-02-2014 , 1961 & && & 254 )1( )-) )-) )-) )-) . . . . ORDER U/S.254(1)OF THE INCOME-TAX ACT,1961(ACT) PER RAJENDRA,AM : CHALLENGING THE ORDERS OF THE CIT(A)-11-MUMBAI,ASSE SSING OFFICER(AO) HAS RAISED FOLLOWING IDENTICAL GROUNDS OF APPEAL FOR BOTH THE AYS.: 1.ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A) ERRED IN DELETING THE INTEREST CHARGED UNDER SECTION 234-B OF THE INCOME TAX ACT, 1961 WITHOUT APPRECIATING THE FACT THAT EXPLANATION 1(I) OF THE SECTION 234B OF THE IN COME TAX ACT, 1961 USED THE EXPRESSION INCOME DEDUCTED OR COLLECTED AT SOURCE. ACCORDINGLY, MATE RIAL IS WHETHER THE TAX AT SOURCE WAS DEDUCTED OR COLLECTED AND IF IT WAS NOT ACTUALLY COLLECTED O R DEDUCTED, THE LIABILITY TO PAY INTEREST ARISES IN THE INSTANT CASE. 2.THE APPELLANT PRAYS THAT THE ORDER OF THE LD. CIT (A) BE SET ASIDE ON THE ABOVE GROUNDS AND THAT OF THE ASSESSING OFFICER BE RESTORED. 3.THE APPELLANT CRAVES LEAVE TO AMEND OR ALTER ANY GROUND OR ADD A NEW GROUND WHICH MAY BE NECESSARY. 2 ITA NOS. 7341 & 7342/MUM/2012 REUTERS TRANSACTION SE RVICES LTD. . ASSESSEE-COMPANY IS ENGAGED IN THE BUSINESS OF PROV IDING REUTERS DEALING 2000-2 AND REUTERS DEALING 3000.DETAILS OF DATES OF FILING OF RETURNS, INCOMES RETURNED,DATES OF ASSESSMENT,ASSESSED INCOMES, DATES OF ORDERS OF THE CIT(A)CAN BE SUMMAR ISED AS UNDER : AY. DT.OF FILING OF RETURN RETURNED INCOME (RS.) DATE OF ASSESSMENT ASSESSED INCOME DT. OF ORDERS OF CIT(A) 2005-06 28.10.2005 NIL 31.12.2007 3,33,39,663/- 28.09.2012 2008-09 29.09.2009 NIL 28.01.2011 542,34,380/- 28.09.2012 ITA/7342/MUM/12-AY.2005-06: EFFECTIVE GROUND OF APPEAL IS ABOUT DELETING THE IN TEREST CHARGED UNDER SECTION 234-B OF THE ACT. WHILE COMPLETING THE ASSESSMENT,AO LEVIED INTEREST U/S.234 OF THE ACT AND SAME WAS CHALLENGED BY THE ASSESSEE BEFORE THE FIRST APPEAL AUTHORITY(F AA).BEFORE HIM IT WAS SUBMITTED THAT THE ASSESSEE WAS A NON RESIDENT AND TAX WAS DEDUCTABLE AT SOURCE FROM THE PAYMENTS MADE TO IT UNDER SECTION 195 OF THE ACT,THAT INTEREST U/S 234B COUL D NOT BE LEVIED. AFTER CONSIDERING THE SUBMISSIONS OF THE ASSESSEE-C OMPANY AND THE ASSESSMENT ORDER HE HELD THAT THE INCOME OF THE ASSESSEE HAD BEEN HELD TO BE TAXA BLE AS ROYALTY AND FTS,THAT TAX WAS DEDUCTAB - LE ON THE SAME U/S.195 OF THE ACT,THAT THE PAYERS H AD FAILED TO DEDUCT THE TDS,THAT INTEREST U/S. 201 OF THE ACT WAS LEVIABLE ON SUCH PAYERS.RELYING UPON THE DECISIONS OF HONBLE MADRAS HIGH COURT,GUJARAT HIGH COURT AND BOMBAY HIGH COURT DELI VERED IN THE CASE OF MADRAS FERTILIZERS LTD [149ITR703], RANOLI INVESTMENT P.LTD[235ITR 433]AND NGC NETWORK LLC ASIA LLC[313ITR 187]RESPECTIVELY, HE HELD THAT INTEREST U/S.234B WA S NOT LEVIABLE. 2.2. BEFORE US,DEPARTMENTAL REPRESENTATIVE(DR)SUPPORTED THE ORDERS OF THE AO.AUTHORISED REPR - ESENTATIVE (AR) SUBMITTED THAT ISSUE WAS DECIDED I N FAVOUR OF THE ASSESSEE BY THE CASES RELIED UPON BY THE FAA,THAT AMENDMENT INTRODUCED IN THE RE LEVANT PROVISIONS OF THE ACT WAS NOT APPLICABLE DURING THE YEAR UNDER APPEAL. 2.3. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL BEFORE US.WE FIND THAT IN THE MATTER OF HONBLE JURISDICTIONAL HIGH COURT HAS HE LD THAT WHEN A DUTY WAS CAST ON THE PAYER TO PAY THE TAX AT SOURCE, ON FAILURE, NO INTEREST COUL D BE IMPOSED ON THE PAYEE-ASSESSEE.AS THE FAA HAS DECIDED THE ISSUE,FOLLOWING THE JUDGMENT OF THE HONBLE BOMBAY HIGH COURT,SO FAULT CAN BE FOUND WITH HIM.RESPECTFULLY FOLLOWING THE DECISIONS HONBLE JURISDICTIONAL HIGH COURT,WE CONFIRM THE ORDER OF THE FAA.EFFECTIVE GROUND OF AP PEAL IS DECIDED AGAINST THE AO. ITA/7341/MUM/12-AY.2008-09 4. FACTS AND CIRCUMSTANCES OF THE CASE FOR YEAR UNDER APPEAL ARE IDENTICAL TO THE FACTS OF THE AY. 2005-06.FOLLOWING OUR ORDER FOR THAT YEAR WE DECIDE THE EFFECTIVE GROUND AGAINST THE AO FOR THIS YEAR ALSO. AS A RESULT,APPEALS FILED BY THE AO FOR BOTH THE AYS. STAND DISMISSED. 0)1 () * 2 3 & - , 4 ..& 6 7 & ) 89. ORDER PRONOUNCED IN THE OPEN COURT ON 21 ST FEBURARY,2014 . . & +,! 6 : 21 QJOJH QJOJH QJOJH QJOJH , 201 4 , & - ; SD/- SD/- ( MK MKMK MK0 00 0 ,L VH ,E IKOYU ,L VH ,E IKOYU ,L VH ,E IKOYU ,L VH ,E IKOYU / DR. S.T.M.PAVALAN) ( / RAJENDRA) / JUDICIAL MEMBER /ACCOUNTANT MEMBER 3 ITA NOS. 7341 & 7342/MUM/2012 REUTERS TRANSACTION SE RVICES LTD. . / MUMBAI, : /DATE:21.02.2014. SK . . . . & && & $)< $)< $)< $)< = ? , 4. THE CONCERNED CIT / > ? 5. DR D BENCH, ITAT, MUMBAI / <@- $) M MM MH HH H , . . . 6. GUARD FILE/ - 0 %<) %<) %<) %<) $) $)$) $) //TRUE COPY// . / BY ORDER, A / 8 DY./ASST. REGISTRAR , /ITAT, MUMBAI 4 ITA NOS. 7341 & 7342/MUM/2012 REUTERS TRANSACTION SE RVICES LTD. . , MH MHMH MH INCOME TAX APPELLATE TRIBUNAL,MUMBAI - D BENCH. , MK0 ,L VH ,E IKOYU MK0 ,L VH ,E IKOYU MK0 ,L VH ,E IKOYU MK0 ,L VH ,E IKOYU BEFORE S/SH. RAJENDRA,ACCOUNTANT MEMBER & DR. S.T.M . PAVALAN,JUDICIAL MEMBER /. ITA NO.7342/MUM/2012, ! ! ! ! / ASSESSMENT YEAR-2005-06 DCIT (IT) 2(1) R.NO.120, SCINIDA HOUSE, 1 ST FLOOR, BALLARD ESTATE, N.M.ROAD, MUMBAI-400038 VS REUTERS TRANSACTION SERVICES LTD. C.O. BMR & ASSOCIATES, 3F, CONTRACTOR BLDG. 41R KAMANI MARG, BALLARD ESTATE, MUMBAI-400001 PAN:AACCR0226Q ( '# / APPELLANT) ( $%'# / RESPONDENT) /. ITA NO.7341/MUM/2012, ! ! ! ! / ASSESSMENT YEAR-2008-09 DDIT (IT) 2(1) R.NO.120, SCINIDA HOUSE, 1 ST FLOOR, BALLARD ESTATE, N.M.ROAD, MUMBAI-400038 VS REUTERS TRANSACTION SERVICES LTD. C.O. BMR & ASSOCIATES, 3F, CONTRACTOR BLDG. 41R KAMANI MARG, BALLARD ESTATE, MUMBAI-400001 PAN:AACCR0226Q ( '# / APPELLANT) ( $%'# / RESPONDENT) & ' / REVENUE BY : SHRI SANJEEV JAIN () ' / ASSESSEE BY : SHRI JITENDRA JAIN CORRIGENDUM PER RAJENDRA,AM : VIDE ITS LETTER DATED 11.03.2014 ASSESSEE HAS SUBMI TTED THAT THERE WAS TYPOGRAPHICAL ERROR ON PAGE 2 IN PARAGRAPH NO. 2.3 AT LINE NO. 4 IN THE ORDER P ASSED BY THE TRIBUNAL ON 21.02.2014 (ITA NO. 7341 & 7342/MUM/2012-AY-2008-09 AND 2005-06). WE HA VE PERUSED THE ORDER AND THE SUBMISSIONS MADE BY THE ASSESSEE. WE FIND THAT THE LINE NO. 4 OF PARAGRAPH NO. 2.3 READS AS UNDER: AS THE FAA HAS DECIDED THE ISSUE,FOLLOWING THE JUD GMENT OF THE HONBLE BOMBAY HIGH COURT,SO FAULT CAN BE FOUND WITH HIM. THE SAID LINE SHOULD BE READ AS UNDER: AS THE FAA HAS DECIDED THE ISSUE,FOLLOWING THE JUD GMENT OF THE HONBLE BOMBAY HIGH COURT,NO FAULT CAN BE FOUND WITH HIM. SD/- SD/- ( MK MKMK MK0 00 0 ,L VH ,E IKOYU ,L VH ,E IKOYU ,L VH ,E IKOYU ,L VH ,E IKOYU / DR. S.T.M.PAVALAN) ( / RAJENDRA) / JUDICIAL MEMBER /ACCOUNTANT MEMBER 5 ITA NOS. 7341 & 7342/MUM/2012 REUTERS TRANSACTION SE RVICES LTD. . / MUMBAI, : /DATE:18.03.2014. SK . . . . & && & $)< $)< $)< $)< = ? , 4. THE CONCERNED CIT / > ? 5. DR D BENCH, ITAT, MUMBAI / <@- $) M MM MH HH H , . . . 6. GUARD FILE/ - 0 %<) %<) %<) %<) $) $)$) $) //TRUE COPY// . / BY ORDER, A / 8 DY./ASST. REGISTRAR , /ITAT, MUMBAI