LINKLATERS LLP, MUMBAI V. DCIT (IT) 3(1)(2), MUMBAI

ITA 969/MUM/2017

• Counselvise Citation: [2019] 117 COUNSELVISE.COM (IT) 1870 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 4 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-06-2019
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: L
• Assessment Year: misc
• Appeal Filed On: 10-02-2017
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: JASBIR CHA UHAN
• Assessee Lawyers: SOLI E DASTUR
• Keywords: Double taxation relief; Opportunity of being heard; Services rendered outside India; Permanent establishment; Corroborative evidences
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL I BENCH , MUMBAI BEFORE SHRI SAKTIJIT DEY , JUDICIAL MEMBER AND SHRI RAJESH KUMAR , ACCOUNTANT MEMBER IT A NO. 969 /MUM./2017 ( ASSESSMENT YEAR : 20 1 3 14 ) LINKLATERS LLP TOWER 3, 27 32, INDIABULLS FINANCE CENTRE, ELPHINSTONE MILL COMPOUND SENAPATI BAPAT MARG, ELPHINSTONE (W) MUMBAI 400 013 PAN AABCL5182G . APP ELL ANT V/S DY. COMMISSIONER OF INCOME TAX (I.T.) CIRCLE 3 ( 1 )(2), MUMBAI . RESPONDENT ASSESSEE BY : SHRI SOLI E. DASTUR, SR. ADV. & SHRI NIRAJ SHETH REVENUE BY : SHRI JASBIR CHAUHAN & SHRI GANESH BARE DATE OF HEARING 05 .0 4 .2019 DATE OF ORDER 21.06.2019 O R D E R PER SAKTIJIT DEY. J.M. A FORESAID APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE FINAL ASSESSMENT ORDER DATED 9 TH DECEMBER 2016, PASSED UNDER SECTION 143(3) R/W SECTION 144C(13) OF THE ACT PERTAINING TO THE ASSESSMENT YEAR 2013 14, IN PURSUANCE TO THE DIRECTIONS OF THE DISPUTE RESOLUTION PANEL (DRP) I (WZ), MUMBAI. 2 LINKLATERS LLP 2 . GROUND NO.1 BEING GENERAL IN NATURE DOES NOT REQUIRE ADJUDICATION. 3 . AT THE OUTSET, SHRI SOLI E. DASTUR, LEARNED SR. COUNSEL APPEARING FOR THE ASSESSEE REQUESTED TO TAKE UP GROUNDS NO.2, 13 TO 15 AND 24 WHICH , ACCORDING TO HIM , ARE OTHERWISE COVERED IN FAVOUR OF THE ASSESSEE BY THE DECISION S OF THE TRIBUNAL IN ASSESSEES OWN CASE. HE SUBMITTED, ONCE THESE GROUNDS ARE DECIDED, REST OF THE GROUNDS WILL BECOME REDUNDANT. 4 . IN VIEW OF THE AFORESAID SUBMISSIONS OF LEARNED SR. COUNSEL FOR THE ASSESSEE, WE PROCEED TO DEAL WITH THE AFORESAID GROUNDS. 5 . GROUND NO.2, IS ON THE ISSUE OF EXISTENCE OF PERMANENT ESTABLISHMENT ( P E) OF THE ASSESSEE IN INDIA. 6 . THE ASSESSEE IS A LIMITED LIABILITY PARTNERSHIP AND IS A TA X RESIDENT OF UNITED KINGDOM (U K). THE ASSESSEE OFFERS LEGAL CONSULTANCY SERVICES TO ITS CLIENTS ALL OVER THE WORLD INCLUDING INDIA. FOR THE IMPUGNED ASSESSMENT YEAR, THE ASSESSEE FILED ITS RETURN OF INCOME ON 30 TH SEPTEMBER 2013, DECLARING TOTAL INCOME OF ` 25,77,672. DURING THE ASSE SSMENT PROCEEDINGS, THE ASSESSING OFFICER CALLED UPON THE ASSESSEE TO FURNISH THE DETAILS OF PROFESSIONAL FEES EARNED DURING THE YEAR. AFTER PERUSING THE DETAILS, THE ASSESSING 3 LINKLATERS LLP OFFICER NOTICED THAT THE ASSESSEE HAS RECEIVED THE FOLLOWING RECEIPTS DURING TH E YEAR. 1 . INCOME IN RESPECT OF SERVICES RENDERED IN INDIA ` 2,10,00,443 2 . INCOME IN RESPECT OF SERVICES RENDERED OUTSIDE INDIA ` 1,62,22,410 3 . TOWARDS DISBURSEMENT ` 4,60,624 TOTAL: ` 3,76,83,477 7 . AFTER VERIFYING THE DETAILS, THE ASSESSING OFFICER WAS OF THE VIEW THAT THE ENTIRE AMOUNT RECEIVED BY THE ASSESSEE WOULD BE DEEMED TO BE THE INCOME WHICH ACCRUED OR AROSE IN INDIA , SINCE , SUCH INCOME IS ON ACCOUNT OF INDIA SPECIFIC PROJECT S . THE ASSESSING OFFICER OBSERVED , EVEN THE INCOME IN RESPECT OF SERVICE S RENDERED OUTSIDE INDIA WOULD ALSO BE TAXABLE SINCE THE SERVICES THOUGH RENDERED OUTSIDE INDIA BUT WERE UTILIZED IN INDIA. THUS, THE ASSESSING OFFICER CONCLUDED THAT THE INCOME RECEIVED IS TAXABLE AS FEES FOR TECHNICAL SERVICES BOTH UNDER THE PROVISIONS O F THE ACT AS WELL AS THE INDIA UK DOUBLE TAXATION AVOIDANCE AGREEMENT (DTAA) . FURTHER, THE ASSESSING OFFICER AL SO HELD THAT THE ASSESSEE HAD PE IN INDIA THROUGH WHICH IT RENDERED SERVICES. ACCORDINGLY, HE TREATED THE RECEIPT OF ` 3,76,83,477, AS INCOME OF THE ASSESSEE AND AFTER ALLOWING EXPENDITURE ESTIMATED @ 5%, HE DETERMINED THE NET INCOME AT ` 3,57,99,303. THOUGH, THE ASSESSEE RAISED OBJECTIONS AGAINST THE DRAFT ASSESSMENT ORDER, HOWEVER, LEARNED 4 LINKLATERS LLP DRP REJECTED THE OBJECTIONS OF THE ASSESSEE AND IN TERMS OF THE DIRECTIONS OF LEARNED DRP, THE DRAFT ASSESSMENT ORDER WAS FINALIZED. 8 . THE LEARNED SR. COUNSEL FOR THE ASSESSEE SUBMITTED , DURING THE PREVIOUS YEAR RELEVANT TO THE ASSESSMENT YEAR UNDER DISPUTE , THE ASSESSEE DID NOT HAVE A PE IN INDIA IN TERMS OF AR T ICLE 5(2)(K)(I) OF THE INDIA UK TAX TREATY, AS ITS EMPLOYEES/ PERSONNEL DID NOT STAY IN INDIA EXCEEDING A PERIOD OF 90 DAYS DURING THE RELEVANT PREVIOUS YEAR . THE LEARNED SR. COUNSEL SUBMITTED , THOUGH, THE AFORESAID FACT WAS BROUGHT TO THE NOTICE OF THE ASS ESSING OFFICER AND THE DRP THROUGH SUPPORTING EVIDENCES, HOWEVER, THEY DID NOT ALLOW ASSESSEES CLAIM. THE LEARNED SR. COUNSEL SUBMITTED , THE EXPRESSION ANY TWELVE MONTHS PERIOD AS USED IN AR TICLE 5(2)(K)(I) OF THE INDIA UK TAX TREATY HAS TO BE CONSTRUED AS PREVIOUS YEAR RELEVANT TO THE ASSESSMENT YEAR UNDER CONSIDERATION. HE SUBMITTED , THE AFORESAID RATIO HAS BEEN LAID DOWN BY THE TRIBUNAL WHILE DECIDING ASSESSEES APPEAL FOR THE ASSESSMENT YEAR 2012 13 IN ITA NO.1540/MUM./2016. THE LEARNED SR. COUNSEL S UBMITTED , DURING THE PREVIOUS YEAR, THE TOTAL NUMBER OF DAYS SPENT BY ASSESSEES EMPLOYEES IN INDIA WAS 42 DAYS. THEREFORE , IN TERMS OF ARTICLE 5(2)(K)(I) OF THE INDIA UK TAX TREATY, THE ASSESSEE DID NOT HAVE ANY PE IN INDIA DURING THE YEAR. 9 . SHRI JASBIR CHAUHAN, THE LEARNED DEPARTMENTAL REPRESENTATIVE SUBMITTED , THE EXPRESSION ANY TWELVE MONTH PERIOD AS USED IN 5 LINKLATERS LLP AR TICLE 5(2)(K)(I) OF THE INDIA UK TAX TREATY WOULD NOT MEAN THE PREVIOUS YEAR AS DEFINED IN SECTION 3 OF THE ACT. THE LEARNED DEPARTMENTAL REPR ESENTATIVE SUBMITTED , HAD IT BEEN THE CASE, THE N, LIKE ARTICLE 15 OF THE INDIA UK TAX TREATY, FISCAL YEAR WHICH HAS BEEN DEFINED TO BE THE PREVIOUS YEAR WOULD HAVE BEEN USED IN AR TICLE 5(2)(K)(I) OF THE INDIA UK TAX TREATY . THUS, HE SUBMITTED , THE MEANING ASCRIBED TO FISCAL YEAR CANNOT BE ASCRIBED TO THE TERM ANY TWELVE MONTHS PERIOD . 10 . WE HAVE CONSIDERED RIVAL SUBMISSIONS AND PERUSED THE MATERIAL ON RECORD. THOUGH, THE LEARNED DEPARTMENTAL REPRESENTATIVE HAS MADE AN ATTEMPT TO MAKE OUT A CASE BY INTERPR ETING THE EXPRESSION ANY TWELVE MO N THS PERIOD AS USED IN ARTICLE 5(2)(K)(I) OF THE INDIA U.K. TAX TREATY IN A DIFFERENT MANNER, HOWEVER, WE ARE NOT IMPRESSED WITH THE SAME. IN OUR CONSIDERED OPINION, THE ISSUE IS SQUARELY COVERED BY THE DECISION OF THE C O ORDINATE BENCH IN ASSESSEES OWN CASE FOR THE ASSESSMENT YEAR 2012 13 IN ITA NO.1540/MUM./2016, DATED 29 TH AUGUST 2018. WHILE DEALING WITH THE AFORESAID ISSUE, THE TRIBUNAL HAS HELD AS UNDER: 14. WE HAVE CONSIDERED RIVAL SUBMISSIONS AND PERUSED MATERIALS ON RECORD. UNDISPUTEDLY, THE ISSUE RAISED IN THIS GROUND WAS NEVER AGITATED BY THE ASSESSEE EITHER BEFORE THE ASSESSING OFFICER OR BEFORE THE DRP. THUS, THIS GROUND RAISED BY THE ASSESSEE HAS T O BE TREATED AS AN ADDITIONAL GROUND. HOWEVER, CONSIDERING THE FACT THAT THE ISSUE RAISED IN THIS GROUND IS A PURELY LEGAL ISSUE, SINCE, IT INVOLVES INTERPRETATION OF ARTICLE 5(2)(K)(I) OF THE INDIA UK DTAA, WE ARE INCLINED TO ADMIT THIS 6 LINKLATERS LLP GROUND. REVERTING BACK TO THE ISSUE RAISED IN THIS GROUND, IT IS OBSERVED THAT THE ASSESSING OFFICER REFERRING TO ARTICLE 5(2)(K)(I)OF THE INDIA UK DTAA HAS CONCLUDED THAT THE ASSESSEE HAD A PE IN INDIA, SINCE, ITS EMPLOYEES OR PERSONNEL HAVE RENDERED SERVICES IN INDIA FOR A PERIOD OF 90 DAYS OR MORE WITHIN ANY 12 MONTH PERIOD. NOTABLY, THE EXPRESSION ANY 12 MONTH PERIOD AS USED IN ARTICLE 5(2)(K)(I) OF THE INDIA UK DTAA HAS NOT BEEN DEFINED ANYWHERE IN THE DTAA. THEREFORE, WE HAVE TO FIND THE MEANING OF THE SAID EXPRESSIO N BY TAKING AID OF THE PROVISIONS OF THE INCOME TAX ACT, 1961, SINCE, THE INCOME IS SOUGHT TO BE TAXED IN INDIA. SECTION 5 OF THE ACT WHICH DEFINES SCOPE OF TOTAL INCOME REFERS TO THE TOTAL INCOME OF ANY PREVIOUS YEAR OF A PERSON WHO IS A RESIDENT. SIMILAR LY, SECTION 6 OF THE ACT POSTULATES THAT AN INDIVIDUAL OR A HUF OR A COMPANY OR ANY OTHER PERSON CAN BE CONSIDERED TO BE A RESIDENT IN INDIA IN ANY PREVIOUS YEAR IF IT SATISFIES THE CONDITION MENTIONED THEREIN. THUS, FOR THE PURPOSE OF BEING CONSIDERED AS A RESIDENT IN INDIA A REFERENCE HAS BEEN MADE TO THE PREVIOUS YEAR. SECTION 4 OF THE ACT, WHICH IS THE CHARGING SECTION, MANDATES THAT A PERSON SHALL BE CHARGED TO INCOME TAX IN RESPECT OF THE TOTAL INCOME OF THE PREVIOUS YEAR. THE EXPRESSION PREVIOUS YEA R HAS BEEN DEFINED UNDER SECTION 3 OF THE ACT TO MEAN THE FINANCIAL YEAR IMMEDIATELY PRECEDING THE ASSESSMENT YEAR. THUS, AS PER THE PROVISIONS OF DOMESTIC LAW, THE 12 MONTH PERIOD WOULD MEAN THE PREVIOUS YEAR OR THE FINANCIAL YEAR WHICH IS THE UNIT FOR W HICH THE INCOME OF A PERSON IS TAXABLE. IF THE PROVISIONS OF ARTICLE 5(2)(K)(I)OF THE INDIA UK DTAA IS READ HARMONIOUSLY WITH THE PROVISIONS OF THE ACT REFERRED TO ABOVE, IT WILL BE FAIR AND REASONABLE TO CONCLUDE THAT THE EXPRESSION ANY 12 MONTH PERIOD MENTIONED IN ARTICLE 5(2)(K)(I)OF THE INDIA U.K. DTAA HAS TO BE CONSTRUED TO MEAN THE PREVIOUS YEAR OR FINANCIAL YEAR AS PER SECTION 3 OF THE ACT, SINCE, THE INCOME IS SOUGHT TO BE TAXED IN INDIA. THEREFORE, IT HAS TO BE SEEN WHETHER THE EMPLOYEES OR PERSO NNEL OF THE ASSESSEE HAVE RENDERED SERVICES IN INDIA FOR A PERIOD AGGREGATING TO 90 DAYS OR MORE IN FINANCIAL YEAR 2011 12 TO CONSTITUTE A PE. AS PER THE CHART SUBMITTED BY THE ASSESSEE AT PAGE 37 OF THE PAPER BOOK, IT IS CLAIMED THAT THE EMPLOYEES AND PER SONNEL OF THE ASSESSEE WERE SITUATED IN INDIA FOR RENDERING SERVICES FOR A PERIOD AGGREGATING TO 77 DAYS. SINCE, THE AFORESAID FACTUAL ASPECT HAS NOT BEEN VERIFIED BY THE DEPARTMENTAL AUTHORITIES AS THE ASSESSEE DID NOT RAISE THIS ISSUE BEFORE THEM, WE ARE INCLINED TO RESTORE THE ISSUE TO THE ASSESSING OFFICER FOR ADJUDICATION KEEPING IN VIEW OF OUR OBSERVATIONS HEREIN ABOVE AND ONLY AFTER DUE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. THIS GROUND IS ALLOWED FOR STATISTICAL PURPOSES. 7 LINKLATERS LLP 11 . FACTS BEING IDENTICA L, WE DO NOT FIND ANY REASON TO DEVIATE FROM THE AFORESAID DECISION OF THE CO ORDINATE BENCH. THEREFORE, RESPECTFULLY FOLLOWING THE DECISION CITED SUPRA, WE DIRECT THE ASSESSING OFFICER TO VERIFY AS TO WHETHER THE EMPLOYEES / PERSONNEL OF THE ASSESSEE WERE S ITUATED IN INDIA FOR RENDERING SERVICES FOR A PERIOD NOT EXCEEDING NINETY DAYS DURING THE PREVIOUS YEAR RELEVANT TO THE ASSESSMENT YEAR UNDER DISPUTE AND IF IT IS FOUND TO BE SO, THEN, IT HAS TO BE HELD THA T THE ASSESSEE DID NOT HAVE A PE IN INDIA DURING T HE YEAR UNDER CONSIDERATION. THIS GROUND IS ALLOWED SUBJECT TO FACTUAL VERIFICATION AS INDICATED ABOVE. 12 . IN GROUNDS NO.13 TO 15, THE ASSESSEE HAS CHALLENGED THE DENIAL OF INDIA U.K. TAX TREATY BENEFIT. 13 . THE ASSESSING OFFICER DENIED BENEFIT TO THE ASSESSEE UNDER THE I NDIA UK TAX TREATY ON THE GROUND THAT INCOME OF T HE ASSESSEE IS NOT TAXABLE IN UK , HENCE , IT CANNO T BE TREATED AS A RESIDENT OF UK UN DER ARTICLE 4(1) OF THE INDIA UK TAX TREATY. 14 . THE LEARNED SR. COUNSEL FOR THE ASSESSEE SUBMITTED , IDENTICAL ISSU E AROSE IN ASSESSEES OWN CASE FOR THE ASSESSMENT YEAR 2012 13 AND THE TRIBUNAL WHILE DECIDING THE ISSUE HAS H ELD THAT BENEFIT UNDER INDIA UK TAX TREATY IS AVAILABLE TO THE ASSESSEE. 8 LINKLATERS LLP 15 . THE LEARNED DEPARTMENTAL REPRESENTATIVE , THOUGH , AGREED THAT THE ISSUE HAS BEEN DECIDED IN FAVOUR OF THE ASSESSEE BY THE TRIBUNAL IN ASSESSMENT YEAR 2012 13, HOWEVER, HE RELIED UPON THE OBSERVATIONS OF THE ASSESSING OFFICER AND LEARNED DRP 16 . HAVING CONSIDERED RIVAL SUBMISSIONS IT IS NOTICED THAT IDENTICA L ISSUE CAME UP FOR CONSIDERATION BEFORE THE TRIBUNAL IN ASSESSEES OWN CASE FOR THE ASSESSMENT YEAR 2012 13 IN THE ORDER CITED SUPRA. W HILE DECIDING THE ISSUE, THE TRIBUNAL HAS HELD AS UNDER: 8. WE HAVE CONSIDERED RIVAL SUBMISSIONS AND PERUSED MATERIALS ON RECORD. UNDISPUTEDLY, THE ASSESSING OFFICER RELYING UPON HIS OBSERVATIONS IN THE PRECEDING ASSESSMENT YEAR HELD THAT THE ASSESSEE IS NOT ENTITLED TO THE BENEFIT OF INDIA UK DTAA AS IT IS NOT REQUIRED TO PAY TAX IN UK. FURTHER, THE ASSESSING OF FICER ALSO HELD THAT THE INCOME RECEIVED BY THE ASSESSEE IS OTHERWISE TAXABLE AS FTS BOTH UNDER SECTION 9(1)(VII) OF THE ACT AS WELL AS UNDER THE DTAA. HOWEVER, THE TRIBUNAL, WHILE DECIDING THE ISSUE OFAPPLICABILITY OF INDIA UK DTAA TO THE ASSESSEE IN ASSE SSEES OWN CASE FOR ASSESSMENT YEAR 2011 12, HAS HELD IN THE FOLLOWING MANNER: 10. SIMILARLY, IN OTHER YEARS, THE TRIBUNAL HAS FOLLOWED ITS EARLIER ORDER ANDHELD THAT M/S. LINKLATERS IS ELIGIBLE FOR THE BENEFITS OF INDIA - UK DTAA SOLONG AS ENTIRE PROFITS OF THE PARTNERSHIP FIRM ARE TAXED IN UK, WHETHER INTHE TAXABLE INCOME IS DETERMINED IN RELATION TO PERSONAL CHARACTERISTICS OFTHE PARTNERS OR IN THE HANDS OF THE FIRM DIRECTLY. IN THE YEAR BEFORE US,THERE IS NO DISPUTE ON FACTS THAT ULTIMATELY TAX HAS BEE N PAID EITHER BY THESAID FIRM OR BY ITS PARTNERS IN UK. NO DISTINCTION HAS BEEN POINTED OUT BYTHE LD. CIT - DR ON FACTS OR LAW. UNDER THESE CIRCUMSTANCES, RESPECTFULLYFOLLOWING THE ORDERS OF THE TRIBUNAL IN LINKLATERSS CASE FOR EARLIER YEARS,WE HOLD THAT TH E ASSESSEE IS ENTITLED TO CLAIM BENEFITS OF INDIA UK - DTAA.THEREFORE, GROUNDS 8 TO 8.4 ARE ALLOWED. 9. THUS, IN VIEW OF THE AFORESAID DECISION OF THE CO ORDINATE BENCH IN ASSESSEES OWN CASE, WE HOLD THAT THE ASSESSEE IS 9 LINKLATERS LLP ENTITLED TO CLAIM BENEFIT UNDER I NDIA UK DTAA. AS REGARDS THE NATURE OF INCOME RECEIVED BY THE ASSESSEE, WHETHER IS FTS? AND ITS TAXABILITY UNDER THE ACT IN INDIA, THE CO ORDINATE BENCH WHILE DECIDING THE ISSUE IN ASSESSEES OWN CASE FOR ASSESSMENT YEAR 2011 12 IN THE ORDER REFERRED TO AB OVE, HAS ULTIMATELY CONCLUDED AS UNDER: 32. THUS, IN VIEW OF THE FACTS BROUGHT BEFORE US, AND IN VIEW OF THE LEGALPOSITION AS EXPLAINED IN MANY JUDGEMENTS AS DISCUSSED ABOVE, WE ARE NOTIN A POSITION TO AGREE WITH THE VIEW TAKEN BY THE REVENUE AND THUS H OLDTHAT THE INCOME OF THE ASSESSEE WOULD NOT FALL IN THE CATEGORY OF FEE FORTECHNICAL SERVICES AS ENVISAGED IN ARTICLE 13 OF INDIA - UK DTAA. FURTHER,SINCE THIS AMOUNT IS NOT TAXABLE UNDER DTAA AS FTS, IT CANNOT BE BROUGHTTO TAX AS FTS AS PER PROVISIONS OF SECTION 9 OF THE INCOME TAX ACT, 1961, INVIEW OF SECTION 90(2) OF THE ACT, AS DISCUSSED ABOVE. THUS, WITH THESEOBSERVATIONS, GROUNDS 9 TO 9.6 ARE ALLOWED. 10. FACTS BEING IDENTICAL, FOLLOWING THE AFORESAID DECISION OF THE CO ORDINATE BENCH, WE HOLD THA T THE INCOME RECEIVED BY THE ASSESSEE NOT BEING IN THE NATURE OF FTS AS ENVISAGED UNDER ARTICLE 13 OF THE INDIA UK DTAA, CANNOT BE BROUGHT TO TAX BY APPLYING THE PROVISIONS OF SECTION 9(1)(VII) OF THE ACT, SINCE, THE ASSESSEE IS ENTITLED TO CLAIM THE BENE FIT OF INDIA UK DTAA. IN VIEW OF THE AFORESAID, GROUNDS NO.6 AND 7 ARE ALLOWED AND THE ISSUES RAISED IN GROUND NO.5 HAVING BECOME REDUNDANT WILL NOT REQUIRE ADJUDICATION. 17 . FACTS BEING IDENTICAL, FOLLOWING THE AFORESAID DECISION OF THE CO ORDINATE BENCH, WE DECIDE THE ISSUE IN FAVOUR OF THE ASSESSEE. 18 . GROUND NO.24, THE ASSESSEE HAS CHALLENGED THE APPLICABILITY OF ARTICLE 15 OF THE INDIA U.K. TAX TREATY . 19 . THE LEARNED SR. COUNSEL FOR THE ASSESSEE SUBMITTED , THE DEPARTMENTAL AUTHORITIES ARE COMPLETELY WRONG I N APPLYING ARTICLE 15 OF THE INDIA UK TAX TREATY TO THE PRESENT ASSESSEE AS IT IS APPLICABLE 10 LINKLATERS LLP ONLY TO SERVICE S RENDERED BY AN INDIVIDUAL. THE LEARNED SR. COUNSEL FOR THE ASSESSEE SUBMITTED , THIS VIEW HAS BEEN EXPRESSED BY THE TRIBUNAL WHILE DECIDING IDENTIC AL ISSUE IN ASSESSEES OWN CASE IN ASSESSMENT YEAR 2011 12. THUS, HE SUBMITTED , THE ISSUE IS COVERED BY THE DECISION OF THE TRIBUNAL. 20 . THE LEARNED DEPARTMENTAL REPRESENTATIVE , THOUGH , AGREED THAT THE ISSUE IS COVERED BY THE DECISION OF THE TRIBUNAL IN ASSESSEES OWN CASE, HOWEVER, HE RELIED UPON THE OBSERVATIONS OF THE ASSESSING OFFICER AND LEARNED DRP. 21 . WE HAVE CONSIDERED RIVAL SUBMISSIONS AND PERUSED THE MATERIAL ON RECORD. AS COULD BE SEEN, IDENTICAL ISSUE AROSE IN ASSESSEES OWN CASE IN ASSESSMENT YEAR 2011 12. WHILE DECIDING THE ISSUE IN ITA NO. 1540/MUM./2016, DATED 29 TH AUGUST 2018, THE TRIBUNAL, FOLLOWING ITS EARLIER ORDER HELD THAT ASSESSEES INCOME WOULD NOT BE TAXABLE UNDER ARTICLE 15 OF INDIA U K TAX TREATY AS IT IS APPLICABLE TO THE SERVICE RENDERED BY AN INDIVIDUAL. THE OBSERVATIONS OF THE CO ORDINATE BENCH IN THIS REGARD ARE EXTRACTED HEREUNDER FOR BETTER APPRECIATION. 23. HAVING CONSIDERED RIVAL SUBMISSIONS, WE FIND THAT WHILE DECIDING IDENTICAL ISSUE IN ASSESSEES OWN CASE FOR ASSESSMENT YEAR 2011 12, THE TRIBUNAL HAS HELD AS UNDER: 35. WE HAVE GONE THROUGH THE ORDERS PASSED BY THE LOWER AUTHORITIES AND ALSO ARTICLE 15 OF INDIA - UK DTAA. IT IS NOTED BY US THAT ARTI CLE 15 OF DTAA DEALS WITH TAXABILITY OF INDEPENDENT PERSONAL SERVICES. THIS ARTICLE STARTS WITH THE WORDS INCOME DERIVED BY AN INDIVIDUAL.......IN RESPECT OF 11 LINKLATERS LLP PROFESSIONAL SERVICES OR OTHER INDEPENDENT ACTIVITIES OF SIMILAR CHARACTER........IT IS NOTED BY US THAT ARTICLE 15 SHALL BE APPLICABLE FOR DETERMINING TAXABLE INCOME IN THE HANDS OF INDIVIDUAL AND NOT OTHER PERSONS. THE ASSESSEE IS CERTAINLY NOT AN INDIVIDUAL. THUS THIS ARTICLE CANNOT BE MADE APPLICABLE ON THE ASSESSEE BEING NOT AN INDIVIDUAL. SIMIL AR ISSUE HAD COME UP BEFORE THE TRIBUNAL IN THE AFORESAID CASE OF M/S LINKLATERS (FOR AY 1995 - 96) WHEREIN THE TRIBUNAL HELD AT PARA 106 OF THE ORDER THAT ARTICLE 15 SHALL BE APPLICABLE ONLY WHEN SERVICES ARE RENDERED BY AN INDIVIDUAL. THUS, RESPECTFULLY FO LLOWING THE ORDER OF THE TRIBUNAL IT IS HELD THAT IMPUGNED AMOUNT OF FEE RECEIVED BY THE ASSESSEE WOULD NOT BE LIABLE TO BE TAXED UNDER ARTICLE 15 OF INDIA - UK DTAA. THUS, GROUNDS 10 TO10.5 ARE ALLOWED IN FAVOUR OF THE ASSESSEE. 24. FACTS BEING IDENTICAL, RESPECTFULLY FOLLOWING THE AFORESAID DECISION OF THE CO ORDINATE BENCH, WE HOLD THAT THE INCOME RECEIVED BY THE ASSESSEE WILL NOT BE TAXABLE UNDER ARTICLE 15 OF INDIA UK DTAA. THIS GROUND IS ALLOWED. 22 . FACTS BEING IDENTICAL , RESPECTFULLY FOLLOWING THE AF ORESAID DECISION OF THE TRIBUNAL, WE HOLD THAT INCOME RECEIVED BY THE ASSESSEE WILL NOT BE TAXABLE UNDER ARTICLE 15 OF THE INDIA UK TAX TREATY. THIS GROUND IS ALLOWED. 23 . IN ANY CASE OF THE MATTER, IN THE FOR E GOING PARAGRAPH S , WE HAVE HELD THAT THE AMOUNT RECEIVED BY THE ASSESSEE CANNOT BE TREATED AS FEE FOR TECHNICAL SERVICES. THAT BEING THE CASE, IT CAN ONLY BE TREATED AS BUSINESS PROFIT OF THE ASSESSEE. HOWEVER, SINCE WE HAVE HELD THAT THE ASSESSEE DID NOT HAVE ANY PE IN IN DIA DURING THE YEAR UNDER CONSIDERATION, THE BUSINESS PROFIT CANNOT BE BROUGHT TO TAX IN INDIA. IN VIEW OF OUR DECISION HEREIN ABOVE, THE OTHER GROUNDS RAISED BY THE ASSESSEE HAVE BECOME REDUNDANT, HENCE, DISMISSED AS NOT PRESSED. 12 LINKLATERS LLP 24 . IN THE RESULT, APPEAL IS PARTLY ALLOWED. ORDER PRONOUNCED IN THE OPEN C OURT ON 21.06.2019 SD/ - RAJESH KUMAR ACCOUNTANT MEMBER SD/ - SAKTIJIT DEY JUDICIAL MEMBER MUMBAI, DATED: 21.06.2019 COPY OF THE ORDER FORWARDED TO : ( 1 ) THE ASSESSEE; ( 2 ) THE REVENUE; ( 3 ) THE CIT(A); ( 4 ) THE CIT, MUMBAI CITY CONCERNED; ( 5 ) THE DR, ITAT, MUMBAI; ( 6 ) GUARD FILE . TRUE COPY BY ORDER PRADEEP J. CHOWDHURY SR. PRIVATE SECRETARY (ASSTT. REGISTRAR) ITAT, MUMBAI