Hilton International LLC, Gurgaon V. ACIT, Circle- 2(1)(1), International Taxation, New Delhi

ITA 7701/DEL/2017

• Counselvise Citation: [2018] 125 COUNSELVISE.COM (IT) 7206 (ITAT-DELHI)
• Duration Of Justice: 6 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-07-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Assessment Year: 2012-2013
• Appeal Filed On: 22-12-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ARUN KR YADAV
• Assessee Lawyers: S P SINGH
• Keywords: Double taxation relief; Question of law; Assessment record

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL (DELHI BENCH: C: NEW DELHI) BEFORE SHRI S.K. YADAV, JUDICIAL MEMBER & SHRI B.R.R. KUMAR, ACCOUNTANT MEMBER ITA NO:- 7701/DEL/2017, ( ASSESSMENT YEAR: 2012-13) HILTON INTERNATIONAL LLC, GURGAON. VS. ACIT, CIRCLE-2(1)(1), INTERNATIONAL TAXATION, NEW DELHI. PAN NO: AADCH0264K APPELLANT RESPONDENT ASSESSEE BY : SH. S.P. SINGH, AR REVENUE BY : SH. ARUN KR. YADAV, SR. DR DATE OF HEARING : 05.07.2018. DATE OF PRONOUNCEMENT : 06/07/2018. ORDER PER: B.R.R. KUMAR, AM THIS APPEAL IS FILED BY THE ASSESSEE AGAINST THE O RDER OF LD. CIT(A)-23, NEW DELHI, DATED 13.10.2017 PERTAINING TO A.Y. 2012-13 WHEREIN THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL:- 1. THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE ORDER PASSED BY LEARNED COMMISSIONER OF INCOME TAX (APPEALS) ('C IT(A)')/ LEARNED ASSESSING OFFICER ('AO') IS BAD IN LAW AND VOID AB- INITIO. 2 ITA NO. 7701/DEL/2017. HILTON INTERNATIONAL LLC. 2. THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, CIT(A)/AO ERRED IN HOLDING THAT APPELLANT HAD CONCEALED OR FURNISHED I NACCURATE PARTICULARS OF INCOME. WHILE DOING SO CIT(A)/AO ALSO ERRED IN APPR ECIATING THE FACT THAT A) THE FORM ITR-6 (I.E., INCOME TAX RETURN FORM APPLI CABLE TO THE CASE OF THE APPELLANT) FILED BY THE APPELLANT ONLINE ON THE ONLINE PORTAL OF THE INCOME TAX DEPARTMENT IS A PAPERLESS RETURN FORM WH ICH DOES NOT CONTAIN ANY SPACE FOR WRITING ANY NOTES OR PROVIDING ANY EX PLANATION WITH RESPECT TO THE INCOME-TAX POSITION TAKEN BY THE APPELLANT I N THE RETURN OF INCOME. B) WHEN THE CASE OF THE APPELLANT WAS PICKED UP FOR S CRUTINY ASSESSMENT, THE APPELLANT SUBMITTED A RELEVANT FACTS OF THE CAS E AND EXPLAINED, THROUGH ITS VARIOUS SUBMISSIONS, THE TAX POSITION T AKEN B THE APPELLANT IN THE RETURN OF INCOME IS AS PER THE LAW. 3. THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, CIT(A)/AO ERRED IN NOT APPRECIATING THE FACT THAT PENALTY AND ASSESSME NT PROCEEDINGS ARE DISTINCT AND SEPARATE PROCEEDINGS. FURTHER, THAT THAT THE AP PELLANT HAD NEVER AGREED AT ANY STAGE OF PENALTY PROCEEDINGS WITH THE TAX POSIT ION ADOPTED BY THE AO. 4. THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, CIT(A)/ AO ERRED IN CONSIDERING THE NON-FILING OF FURTHER APPEAL AS ACCEPTANCE OF DEMAND RAISED AND NOT APPRECIATING THE FACT THAT THE SAID ACTION WAS IN PURSUANT TO BUY PEACE OF MIND AND TO AVOID LITIGATION. 5. THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, CIT(A)/AO HAS ERRED IN RELYING UPON CERTAIN JUDICIAL PRECEDENTS W HICH ARE NOT APPLICABLE TO THE CASE OF THE PRESENT APPELLANT AND DISTINGUISHABLE F ROM THE FACTS APPLICABLE TO THE APPELLANT'S CASE. 6. THE IMPOSITION OF PENALTY MADE BY CIT(A) IS GROSSLY UNJUSTIFIED, ERRONEOUS AND UNSUSTAINABLE AND NEEDS TO BE DELETED. 7. THE APPELLANT DESIRES LEAVE TO ADD TO OR ALTER, BY DELETION, SUBSTITUTION OR OTHERWISE, ANY OR ALL OF T ABOVE GROUNDS OF OBJECTI ONS, AT ANY TIME BEFORE OR DURING THE HEARING OF THE APPEAL. THE APPELLANT SUBMITS THAT THE ABOVE GROUNDS ARE IN DEPENDENT AND WITHOUT PREJUDICE TO ONE ANOTHER. 3 ITA NO. 7701/DEL/2017. HILTON INTERNATIONAL LLC. 2. FURTHER, THE ASSESSEE ALSO FILED ADDITIONAL GROU NDS OF APPEAL ON 10 TH APRIL, 2018 AS UNDER:- ADDITIONAL GROUNDS: 8. THAT ON FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD.CIT(A) ERRED IN NOT APPRECIATING THAT NO PENALTY IS IMPOSA BLE ON DEBATABLE ISSUE ON WHICH TWO DIFFERENCE INTERPRETATIONS OF A LEGAL PRO VISION IS POSSIBLE AND THE APPELLANT ADOPTED ONE OF THE VIEW BASED ON FAVORABL E JUDICIAL PRECEDENTS. 9. THAT ON FACTAS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD.CIT(A) ERRED IN IGNORING THE FACT THAT IN SUBSEQUENT YEARS ON SIMILAR FACTS, NO PENALTY IS LEVIED ON THE APPELLANT. IT IS SUBMITTED THAT THE AFORESAID ADDITIONAL GROUN DS OF APPEAL ARE PURELY LEGAL IN NATURE AND DOES NOT INVOLVE ANY FRESH INVESTIGAT ION INTO FACTS OF THE CASE. THE APPELLANT BY WAY OF THIS APPLICATION CRAVES LEA VE OF THE HONLE BENCH TO RAISE THE AFORESAID ADDITIONAL GROUND. IN VIEW OF THE DECISION OF THE HONBLE SUPREME COUR T IN THE CASE OF JUTE CORPORATION OF INDIA VS. CIT: 187 ITR 688 AND THE D ISCRETION VESTED WITH YOUR HONOUR UNDER RULE 11 OF THE INCOME-TAX (APPELLATE T RIBUNAL) RULES, 1963, IT IS PRAYED THAT THE AFORESAID ADDITIONAL GROUNDS OF APP EAL MAY KINDLY BE ADMITTED AND ADJUDICATED ON MERITS. THE APPELLANT TRUSTS THAT ITS REQUEST SHALL BE ACCE DED TO. 2.1 SINCE, THE ISSUE INVOLVED A QUESTION OF LAW ARI SING FROM THE FACTS WHICH ARE ON RECORD, THE ADDITIONAL GROUNDS ARE HEREBY ADMITT ED. 3. THE ONLY EFFECTIVE GROUND TAKEN BY THE APPELLANT IS AGAINST THE LEVY OF PENALTY U/S 271(1)(C) OF THE ACT. 4. BRIEF FACTS OF THE CASE ARE THAT, THE ASSESSEE I S A LIMITED LIABILITY COMPANY COME UP AS NON-RESIDENT OF INDIA (NRI) AND DOES NOT HAVE ANY PE IN INDIA. THE ASSESSMENT WAS COMPLETED BY MAKING ADDITION ON ACCO UNT OF FTS/FIS. CONSEQUENTLY, THE PENALTY U/S 271(1)(C) HAS BEEN LE VIED. DURING THE HEARING, IT 4 ITA NO. 7701/DEL/2017. HILTON INTERNATIONAL LLC. WAS SUBMITTED THAT IN THE SUBSEQUENT YEARS (A.YS. 2 013-14 AND 2014-15), ON SIMILAR FACTS, NO PENALTY WAS LEVIED BY THE DEPARTM ENT AND FOR THE ASSESSMENT YEAR 2015-16, THE REVENUE HAS INITIATED A PENALTY P ROCEEDINGS WHICH HAVE BEEN SUBSEQUENTLY DROPPED. 5. THE LD. AR HAS PRODUCED THE RELEVANT ORDER SHEET COPY OF THE ASSESSMENT RECORD WHILE DROPPING THE PENALTY PROCEEDING FOR THE ASSES SMENT YEAR 2015-16. HE FURTHER ARGUED THAT AS PER THE ORDER OF ITAT DELHI IN THE C ASE OF M/S INSPECTORATE SINGAPORE PTE. LTD. VS. ADDIT, CIRCLE 1(2) INTERNAT IONAL TAXATION (ITAT DELHI- ITA NO. 4917/DEL/2016), WHEREIN IT WAS HELD THAT THE CONSIDERATION PAID BY THE INDIAN CUSTOMERS CANNOT BE REGARDED AS FEE FOR TEC HNICAL SERVICES AND SINCE THERE WAS NO TRANSFER OF TECHNOLOGY INVOLVED IN THE SERVICES EXTENDED BY THE ASSESSEE, THE CONSIDERATION FOR SUCH SERVICES COULD NOT BE TAXED UNDER ARTICLE 12(4)(B) OF THE DTAA. THE LD. AR RELIED ON THE FOLLOWING JUDGMENTS IN THE CASE OF:- SIR SHADILAL SUGAR & GENERAL MILLS LTD. VS. CIT (16 8 ITR 705)(SC) RAI INDUSTRIAL POWER PVT. LTD. VS. DCIT (ITA 4862/D EL/2013) 5.1 THE LD. AR HAS ALSO BROUGHT TO OUR NOTICE THE J UDGMENT IN THE CASE OF BACARDI MARTINI INDIA LIMITED (288 ITR 585) (DEL), WHEREIN IT WAS HELD THAT, NO PENALTY IS IMPOSABLE ON DEBATABLE ISSUE ON WHICH TWO DIFFERENT LEGAL INTERPRETATIONS ARE POSSIBLE AND THE APPELLANT ADOPTED ONE OF THE VIEWS BASED ON FAVORABLE JUDICIAL PRECEDENTS. 5 ITA NO. 7701/DEL/2017. HILTON INTERNATIONAL LLC. 6. THE LD. DR HAS RELIED ON THE ORDER OF THE LD. CI T(A), AND ARGUED BASED ON THE JUDGMENT IN THE CASE OF ZOOM COMMUNICATION PVT. LTD. 327 ITR 510 AND MAC DATA PVT. LTD. 38 TAXMANN.COM 448 (2013), THAT IT IS A FIT CASE FOR LEVY OF PENALTY. 7. WE HAVE HEARD BOTH THE PARTIES AND GONE THROUGH THE MATERIAL AVAILABLE ON RECORD. THE REVENUE HAS NOT LEVIED PENALTY, ON THE SIMILAR ISSUE IN THE SUBSEQUENT YEARS AND IN FACT DROPPED THE PENALTY PROCEEDINGS I NITIATED IN THE YEAR 2015-16 AND ALSO KEEPING IN VIEW, THE SIMILAR ISSUE, WHICH HAS BEEN DECIDED IN FAVOUR OF THE ASSESSEE IN THE CASE OF M/S INSPECTORATE SINGAPORE PTE. LTD. VS. ADDIT (SUPRA), WE HEREBY DELETE THE PENALTY LEVIED BY THE AO. 8. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED . ORDER PRONOUNCED IN THE OPEN COURT ON 06/7/2018 SD/- SD/- (S.K. YADAV) (B.R.R. KUMAR) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 06.07.2018 POOJA/- COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(APPEALS) 5. DR: ITAT 6 ITA NO. 7701/DEL/2017. HILTON INTERNATIONAL LLC. ASSISTANT REGISTRAR ITAT NEW DELHI DATE OF DICTATION 5/7/2018 DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER 5/7/2018 DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE OTHER MEMBER DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR. PS/PS 6 /7/2018 DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE DICTATING MEMBER FOR PRONOUNCEMENT 6 /7/2018 DATE ON WHICH THE FAIR ORDER COMES BACK TO THE SR. PS/PS 6/7/2018 DATE ON WHICH THE FINAL ORDER IS UPLOADED ON THE WEBSITE OF ITAT DATE ON WHICH THE FILE GOES TO THE BENCH CLERK DATE ON WHICH THE FILE GOES TO THE HEAD CLERK THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT REGISTRAR FOR SIGNATURE ON THE ORDER DATE OF DISPATCH OF THE ORDER 7 ITA NO. 7701/DEL/2017. HILTON INTERNATIONAL LLC.