Oil Spill Response Limited, United Kingdom V. DCIT Circle 2(1), CHENNAI

ITTPA 32/CHNY/2018

• Counselvise Citation: [2021] 108 COUNSELVISE.COM (IT) 3812 (ITAT-CHENNAI)
• Duration Of Justice: 2 year(s) 8 month(s) 15 day(s)
• Appeal Type: Income Tax (Transfer Pricing) Appeal
• Pronouncement Date: 29-04-2021
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: D
• Assessment Year: 2015-2016
• Appeal Filed On: 13-08-2018
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Assessee Lawyers: RAGHUNATHAN PARTHASARATHY
• Keywords: Business income; Double taxation relief; Permanent establishment; Capital Gains
• Section: 28; 2; 234B; 195; 201; 44BB; 43; 48; 13

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL D BENCH, CHENNAI . , , , BEFORE SHRI DUVVURU RL REDDY, JUDICIAL MEMBER AND SHRI S. JAYARAMAN, ACCOUNTANT MEMBER /. I.T.(TP) A. NO: 32/CHNY/2018 / ASSESSMENT YEAR : 2015-16 OIL SPILL RESPONSE LIMITED, C/O BDO INDIA LLP, THE RUBY, LEVEL 9, NORTH-WEST WING, SENAPATI BAPAT MARG, DADAR (WES), MUMBAI 400 028. [PAN: AABCO 3219K] VS. DEPUTY COMMISSIONER OF INCOME TAX, CIRCLE 2(1), INTERNATIONAL TAXATION, CHENNAI. ( / APPELLANT) ( / RESPONDENT) '( / APPELLANT BY : SHRI. RAGHUNATHAN PARTHASARATHY +,'( / RESPONDENT BY : MS. R. ANITA, JCIT ( /DATE OF HEARING : 11.02.2021 ( /DATE OF PRONOUNCEMENT : 29.04.2021 / O R D E R PER S. JAYARAMAN, ACCOUNTANT MEMBER: THE ASSESSEE FILED THIS APPEAL AGAINST THE ORDE R OF THE COMMISSIONER OF INCOME TAX (APPEALS)- 16, CHENNAI IN ITA NO. 76/CI T(A)-16/AY 2015-16 DATED 04.06.2018 FOR THE ASSESSMENT YEAR 2015-16. :-2-: IT(TP)A NO.32/CHNY/2018 2. M/S. OIL SPILLS RESPONSE LIMITED, THE ASSESSEE, A NON-RESIDENT COMPANY INCORPORATED IN UK, IS ENGAGED IN RESPONDING TO OI L SPILLS ON A WORLDWIDE BASIS, ASSISTING AND ADVISING ON OIL SPILL PREPAREDNESS AN D IT DOES NOT HAVE ANY OFFICE OR A PLACE OF BUSINESS IN INDIA. IT FILED ITS RETURN FOR THE ASSESSMENT YEAR 2015-16, ADMITTING AN INCOME, IE TRAINING FEES RECEIVED FROM ITS CLIENTS/MEMBERS IN INDIA AT RS. 35,62,700/-. THE AO FOUND THAT THE ASSESSEE HAS NOT ADMITTED MEMBERSHIP FEE RECEIVED FROM ONGC LTD., CAIRN INDIA LTD. AND RELIANCE INDUSTRIES LTD AT RS. 56,597,102/-, AND EXPLAINED T HAT THE MEMBERSHIP FEES RECEIVED IS IN THE NATURE OF SUBSCRIPTION CHARGES A ND NOT IN THE NATURE OF ROYALTY SINCE IT WAS NOT PAID FOR USE OR RIGHT TO USE ANY I NFORMATION OR EQUIPMENT . THE ASSESSEE WOULD BE ENTITLED TO A SEPARATE CALL OUT FEES WHICH MAY ARISE ONLY AFTER AN OCCURRENCE OF OIL SPILL. SINCE, NO SERVICES WERE SOUGHT BY THE PARTICIPANTS DURING THE YEAR, THE ASSESSEE HAS NOT RENDERED AN Y SERVICES ETC. THE AO EXAMINED THESE TRANSACTIONS IN THE LIGHT OF VARIOU S CLAUSES OF THE AGREEMENT BETWEEN THE ASSESSEE AND THE PARTICIPANTS, WITH TH E PROVISIONS OF THE INCOME TAX ACT 1961 R.W. THE PROVISIONS OF DOUBLE TAXATION AVOIDANCE AGREEMENT (DTAA) BETWEEN INDIA AND THE UK AND WHEN HE PROPOS ED TO ASSESS THE INCOME AS ROYALTY, THE ASSESSEE SUBMITTED THAT IF ITS EXPL ANATIONS ARE NOT ACCEPTED, AN ALTERNATE CLAIM BE CONSIDERED U/S. 44BB. THEREAFTE R, THE AO EXAMINED THE ARTICLE 5 OF INDIA-UK DTAA, EXPLANATION 2 TO SECTIO N 9(1)(VI) AND SECTION 44BB AND HELD THAT THE IMPUGNED RECEIPTS ARE FALLING WI THIN THE SCOPE OF ; ROYALTY AS PER INDIA-UK DTAA , HOWEVER, IT WAS EXCLUDED UNDER CLAUSE (IVA) OF THE EXPLANATION 2 OF SECTION 9(1)(VI) AS IT IS FALLING WITHIN THE SCOPE OF SPECIAL :-3-: IT(TP)A NO.32/CHNY/2018 PROVISIONS OF SECTION 44BB. THEREFORE, THE A O HEL D THAT THESE RECEIPTS ARE TO BE ASSESSED U/S. 44BB AND ACCORDINGLY CHARGED 10% OF T HE AMOUNT RECEIVED BY THE ASSESSEE AS AN INCOME AND COMPLETED THE ASSESSMENT. WHILE DOING SO, HE CHARGED INTEREST U/S. 234B ALSO. AGGRIEVED, THE AS SESSEE FILED AN APPEAL BEFORE THE CIT(A). THE LD. CIT(A) DISMISSED THE APPEAL. AGGRIEVED AGAINST THAT ORDER, THE ASSESSEE FILED THIS APPEAL. 3. THE CASE WAS HEARD THROUGH VIDEO CONFERENCING. THE LD. AR SUBMITTED THAT THE ASSESSEE FILED AN APPEAL WITH A DELAY OF 3 DAYS. THE LD. AR SUBMITTED THAT FOR FILING THE APPEAL, THE ASSESSEE HAS TO PAY FILING FEES OF RS. 10,000/- ALONG WITH THE MEMORANDUM OF APPEAL. SINCE, THE ASSESSEE BEING A FOREIGN COMPANY DID NOT HAVE A BANK ACCOUNT IN INDIA. THEREFORE, T HE ASSESSEE HAD TO APPROACH A LOCAL BANK TO ASSIST IT IN MAKING THE TAX PAYMENT. DUE TO SUCH REASONS THERE WAS A DELAY IN RECEIVING REMITTANCE OF FUNDS FROM ASSES SEES ACCOUNT WITH A FOREIGN BANK IN UK INTO THE LOCAL BANK IN INDIA WHICH CAUSE D THE IMPUGNED DELAY. SINCE, THE DELAY IS BEYOND THE CONTROL OF THE ASSESSEE, IN THE INTERESTS OF JUSTICE AND FAIR PLAY, HE PLEADED THAT THE DELAY IN FILING THE APPEA L MAY BE CONDONED. 4. WE HEARD THE RIVAL PARTIES AND CONDONE THE DELAY . 5. THE LD. AR SUBMITTED THAT THE AO ERRED IN TREATI NG THE MEMBERSHIP/SUBSCRIPTION FEES RECEIVED FROM MEMBERS IN INDIA AS AN INCOME TAXABLE IN INDIA UNDER THE DTAA BETWEEN INDIA AND U K, THE LD. AO ERRED IN :-4-: IT(TP)A NO.32/CHNY/2018 HOLDING THAT THE MEMBERSHIP FEES ARE IN THE NATURE OF ROYALTY AS PER SECTION 9(1)(VI) R.W. ARTICLE 13 OF THE DTAA, HELD THAT THE SERVICES RENDERED BY THE ASSESSEE ARE SERVICES IN CONNECTION WITH OR PROVISI ON OF EQUIPMENT ON HIRE FOR USE, IN THE PROSPECTING FOR, OR EXTRACTION OR PRODU CTION OF MINERAL OILS, AND HENCE TAXABLE IN INDIA UNDER THE PROVISIONS OF SECTION 44 BB OF THE ACT R.W. PROVISO TO ARTICLE 5 OF THE DTAA. CONSEQUENTLY, THE 10% OF GR OSS RECEIPTS HAVE BEEN TAXED AT @ 40%. THE LD. AR SUBMITTED THAT THE CONSIDERAT ION RECEIVED IS IN THE NATURE OF SUBSCRIPTION CHARGES AND NOT IN THE NATURE OF RO YALTY, SINCE, IT WAS NOT PAID FOR THE USE OR RIGHT TO USE ANY INFORMATION OR EQUIPMEN T. INVITING OUR ATTENTION TO THE CLAUSE 4 OF THE AGREEMENT TITLED AS RIGHTS OF T HE PARTICIPANTS IN THE PAPER BOOK, THE LD. AR SUBMITTED THAT THE ASSESSEE WOULD BE ENTITLED TO SEPARATE A CALL-OUT FEES WHICH MAY ARISE ONLY AFTER AN OCCURRE NCE OF OIL SPILL. THEREFORE, THE MEMBERSHIP FEES IS NOT IN THE NATURE OF ROYALTY. S INCE, THE ASSESSEE IS NOT HAVING ANY BUSINESS CONNECTION IN INDIA, THE MEMBE RSHIP FEES BEING IN A NATURE OF BUSINESS INCOME SHALL NOT DEEMED TO BE ACCRUED A ND TAXABLE IN INDIA IN ABSENCE OF BUSINESS CONNECTION IN INDIA. NO BUSINE SS OPERATIONS ARE CARRIED OUT IN INDIA. MEMBERSHIP FEES BEING IN THE NATURE OF B USINESS INCOME SHALL NOT BE TAXABLE IN INDIA IN THE ABSENCE OF PE IN INDIA AS P ER DTAA BETWEEN INDIA AND UK. THE LD. AR SUBMITTED THAT THE ADDITION MADE U/S. 44 BB IS NOT CORRECT IN LAW AND HENCE PLEADED TO DELETE THE ADDITION. 6. WITH REGARD TO THE LEVY OF INTEREST U/S. 234B, T HE LD. AR SUBMITTED THAT THE ENTIRE INCOME OF THE ASSESSEE WAS SUBJECTED TO TAX WITHHOLDING U/S. 195 AND :-5-: IT(TP)A NO.32/CHNY/2018 THERE WAS NO REQUIREMENT OF THE ASSESSEE TO PAY ANY ADVANCE TAX. ALTHOUGH, THE ASSESSEE TOOK A SPECIFIC PLEA BEFORE THE LD. CIT(A ), THE LD. CIT(A) DISMISSED THE APPEAL STATING THAT THE LEVY OF INTEREST U/S. 234B IS MANDATORY. THUS, THE LD. AR PLEADED TO ALLOW THE APPEAL OF THE ASSESSEE. 7. PER CONTRA, THE LD. DR TAKING THROUGH THE ORDER OF THE LD. CIT(A) SUBMITTED THAT THE ASSESSEE IS OFFERING TWO TYPES O F MEMBERSHIPS NAMELY PARTICIPANT MEMBERSHIP AND ASSOCIATE MEMBERSHIP. T HE ASSESSEE RECEIVED PARTICIPANT MEMBERSHIP FROM ONGC LTD., CAIRN INDIA LTD. AND RELIANCE INDUSTRIES LTD., AT RS. 56,597,102/-. THIS MEMBERSHIP SUBSCRI PTIONS ENTITLED THE SUBSCRIBERS TO REQUEST THE ASSESSEE TO RENDER SERVICES TOWARDS OIL SPILL RESPONSE OPERATIONS AND PROVIDE OIL SPILL EQUIPMENT (OWNED AND MAINTAIN ED BY THE ASSESSEE), OIL SPILL SPECIALISTS (EMPLOYED BY THE ASSESSEE) AND RELATED OIL SPILL SERVICES. NON MEMBERS ARE NOT GUARANTEED A RESPONSE AND WILL BE R EQUIRED TO SIGN A NON- MEMBER AGREEMENT. COMPARED TO PARTICIPANT MEMBERS, THE RATES FOR NON- MEMBERS FOR OIL SPILL RESPONSE OPERATIONS WILL BE D OUBLE AND EVEN THE SERVICES AVAILABLE DIFFER TO THOSE OF MEMBER PARTICIPANTS. TAKING THROUGH THE ORDER OF THE LD CIT(A) VIZ PORTION OF THE RECITALS, RIGHTS OF TH E PARTICIPANTS, RESPONSE DELIVERABLES AND TECHNICAL ADVISOR, THE LD. DR SUBM ITTED THAT BY VIRTUE OF MEMBERSHIP AGREEMENT, THE OIL COMPANIES ENTITLED TO THE RIGHT TO USE THE EQUIPMENT/PERSONNEL RESOURCES/DRAWINGS/IMAGERY AND ESPECIALLY EXPERT ADVICE AND HENCE THE LD DR SUBMITTED THAT THE IMPUGNED R ECEIPTS ARE IN THE NATURE OF ROYALTY IN THE HAND OF THE ASSESSEE. :-6-: IT(TP)A NO.32/CHNY/2018 7.1 SINCE THE LD DR SUBSTANTIALLY RELIED ON THE ORD ER OF LD CIT(A) , THE RELEVANT PORTION OF THE ORDER OF THE LD CIT(A) IS E XTRACTED AS UNDER. RECITALS ..... THE COMPANY AND ITS AFFILIATE(S) HAVE MADE AV AILABLE CERTAIN EQUIPMENT, FACILITIES AND STAFF FOR DEALING WITH OIL SPILLS AT SEA, ON LAND OR ON THE SHORELINE WORLDWIDE BASIS. THE PARTICIPANT WISHES TO HAVE ACCESS TO THE EQUIPM ENT, FACILITIES AND STAFF MENTIONED RECITAL (A) TO SUPPLEMENT EXISTING AND CONTEMPLATED CLEAN-UP CAPABILITY AVAILABLE TO PARTICIPANT AND IS PREPARED TO MAKE A CONTRIBUTION TO THE TOTAL COSTS OF MAKING THE SAME AVAILABLE..... RIGHTS OF THE PARTICIPANT 4(A) .....THE PARTICIPANT SHALL BE ENTITLED, FOR TH E PURPOSES SET OUT IN SUB-CLAUSE (B) OF THIS CLAUSE 4 AND IN ACCORDANCE WITH THE TER MS HEREOF AND SUBJECT TO CLAUSE 5(A), TO CALL UPON AND HIRE SUCH OF THE EQUI PMENT WHICH AT THE TIME OF THE REQUEST TO HIRE IS TO BE FOUND AT THE BASE AND HAS NOT BEEN OTHERWISE ALLOCATED (OR SUCH LESSER AMOUNT OF EQUIPMENT AS TH E PARTICIPANT SHALL REQUEST) AND SUCH OF THE OPERATING STAFF WHO AT THE TIME OF THE REQUEST TO HIRE ARE EMPLOYED AT THE BASE AND HAVE NOT BEEN OTHERWISE AL LOCATED.....1 (B) THE EQUIPMENT AND THE STAFF MAY BE CALLED UPON AND HIRED BY THE PARTICIPANT IN EXERCISE OF THE PARTICIPANTS RIGHTS UNDER SUB-CLAUSE (A) OF THIS CLAUSE 4..... CONTROL OF OPERATIONS AND EQUIPMENT 10(A) THE RESPONSIBILITY FOR THE CONTROL OF ALL MAT TERS AT THE LOCATION OF THE CLEAN-UP OPERATION SHALL BE THAT OF THE PARTICIPANT OR THE PARTICIPANTS AFFILIATE CONCERNED...,. ALSO REFER TO THE SERVICE LEVEL AGREEMENT 3.0 RESPONSE DELIVERABLES GUARANTEED RESPONSE: THE COMPANY RETAINS SUFFICIENT TYPES AND QUANTITIES OF RESPONSE EQUIPMENT TO MEET A WIDE RANGE OF OIL SPILL SCENARIOS. DEDICATED RESOURCES: PERSONNEL :-7-: IT(TP)A NO.32/CHNY/2018 PERSONNEL ARE ON STANDBY AND AVAILABLE 24 HOURS A D AY 365 DAYS A YEAR WITH EQUIPMENT AND LOGISTICS SUPPORT TO INITIATE, MOBILI SE AND SUSTAIN A RESPONSE COMPRISING: 1 SENIOR OIL SPILL RESPONSE MANAGER 1 OIL SPILL RESPONSE MANAGER 15 OIL SPILL RESPONSE SPECIALISTS/ OIL SPILL RESP ONDERS 1 LOGISTICS SERVICE BRANCH COORDINATOR A SECOND TEAM WITH THE SAME COMPOSITION IS ALSO AVA ILABLE IN THE ENT OF THE FURTHER INCIDENT FROM ANOTHER MEMBER. TECHNICAL ADVISOR ON REQUEST AND ITS DISCRETION, THE COMPANY WILL DIS PATCH A TECHNICAL ADVISOR TO SUPPORT ANY MEMBER THAT IS RESPONDING TO AN INCIDEN T OR POTENTIAL INCIDENT. THIS RESOURCE WILL BE PROVIDED AT NO COST FOR THE INITIA L ASSESSMENT PERIOD NORMALLY OF UP TO 48 HOURS FROM ARRIVAL IN-COUNTRY ......IT IS INTENDED THAT THE TECHNICAL ADVISOR WIL L BE USED FOR, BUT NOT LIMITED TO THE FOLLOWING TASKS. ASSESS THE (POTENTIAL INCIDENT PROVIDE ADVICE ON THE MOST EFFECTIVE RESPONSE DETERMINE WHAT RESOURCE MAY BE REQUIRED ADVISE ON THE BEST METHOD OF PROVIDING THOSE RESO URCE DEDICATED RESOURCES: EQUIPMENT RESPONSE EQUIPMENT IS HOUSED IN SECURE FACILITIES, CUSTOMS CLEARED WHERE REQUIRED, READY FOR DEPLOYMENT, EQUIPMENT WILL BE M OBILISED FROM THE MOST APPROPRIATE LOCATION TO PROVIDE THE MOST TIMELY AND EFFECTIVE RESPONSE. OIL SPILL TRAJECTORY AND TRACKING 3D AND 2D MODELLING AVAILABLE ON REQUEST PROVIDING TRAJECTORY, STOCHASTIC AND BACKTRACK MODELLING SATELLITE SURVEILLANCE ACCESS TO SATELLITE IMAGERY ON A GLOBAL; BASIS THRO UGH THE AGREEMENT WITH OUR DEDICATED SATELLITE PROVIDER. OILED WILDLIFE ADVICE ACCESS TO EXPERT OILED WILDLIFE ADVICE VIA OUR CONT RACTED PROVIDER SEA ALARM FOUNDATION(SAF) FROM THE ABOVE IT IS EVIDENT THAT EVEN THOUGH ASSES SEE HAS NOT RENDERED ANY SERVICES TO ITS CLIENT DURING THE YEAR, BY VIRTUE O F THE MEMBERSHIP AGREEMENT :-8-: IT(TP)A NO.32/CHNY/2018 AND AMOUNT PAID TOWARDS THE SAME, THE OIL ENTITLED TO THE RIGHT TO USETHE EQUIPMENT/ PERSONNEL RESOURCES/ DRAWINGS/ IMAGERY A ND ESPECIALLY EXPERT ADVICE ON FREE OF COST BASIS. IN THIS REGARD IT WOULD BE PERTINENT TO NOTE THE DE FINITION OF ROYALTY AS PER INDIA UK DTAA FOR THE PURPOSE OF THIS ARTICLE, THE TERM ROYALTIE S MEANS; A) PAYMENTS OF ANY KIND RECEIVED AS A CONSIDERATION FOR THE USE OF OR THE RIGHT TO USE, ANY COPYRIGHT OF A LITERARY, ARTISTIC OR SC IENTIFIC WORK, INCLUDING CINEMATOGRAPHY FILMS OR WORK ON FILMS, TAPE OR OTHE R MEANS OF REPRODUCTION FOR USE IN CONNECTION WITH RADIO OR TELEVISION BROADCAS TING, ANY PATENT, TRADE MARK, DESIGN OR MODEL , PLAN SECRET FORMULA OR PROCESS, O R FOR INFORMATION CONCERNING INDUSTRIAL, COMMERCIAL OR SCIENTIFIC EXPERIENCE; AN D B) PAYMENTS OF ANY KIND RECEIVED AS CONSIDERATION FOR THE USE OF OR THE RIGHT TO USE, ANY INDUSTRIAL, COMMERCIAL OR SCIENTIFIC EQUIP MENT, OTHER THAN INCOME DERIVED BY AN ENTERPRISE OF A CONTRACTING STATE FRO M THE OPERATIONS OF SHIP OR AIRCRAFT IN INTERNATIONAL TRAFFIC. SINCE THE ABOVE MEMBERSHIP TEE PAYMENT RECEIVED BY THE ASSESSEE IS IN THE NATURE OF A CONSIDERATION FOR THE RIGHT TO USE DESI GN INFORMATION CONCERNING INDUSTRIAL EXPERIENCE AND INDUSTRIAL, SCIENTIFIC EQ UIPMENT, VIDE THIS OFFICE NOTICE DT 30.11.2017, ASSESSEE WAS REQUIRED TO SHOW CAUSE AS TO WHY NOT THE MEMBERSHIP FEE PAYMENTS RECEIVED BY THE ASSESSEE FR OM THE OIL COMPANY CLIENTS BE TREATED AS ROYALTY AND BROUGHT TO TAX IN INDIA. THE APPELLANTS ARGUMENTS ........THE RIGHTS OF A PARTICIPANT ON ACCOUNT OF MEMBERSHIP PAYMENT ARE TRIGGERED ONLY IN CASE OF OIL SPILL AND NOT OTHERWI SE AND THAT TOO ONLY ON PAYMENT OF SEPARATE CALL OUT FEES, SUCH INCOME FROM CALL OUT FEES ARISING SUBSEQUENTLY MAY BE SUBJECT TO TAX BASED ON ITEM OF EQUIPMENT HIRED OR MADE AVAILABLE AFTER THE OCCURRENCE OF OIL SPILL BY VIRTUE OF THE MEMBERSHIP AGREEMENT, THE PARTICIP ANTS ARE NOT GUARANTEED SUPPLY OF ANY EQUIPMENT, PERSONNEL AND SERVICES. I T WHOLLY DEPENDS ON AVAILABILITY OF EQUIPMENT, PERSONNEL AND SERVICES I N CASE OF OIL SPILL. PARTICIPANT MEMBERS ONLY GET A PREFERENCE OVER NON MEMBERS IN C ASE OF OIL SPILL AND AT LOWER RATES OVER NON MEMBER CHARGES :-9-: IT(TP)A NO.32/CHNY/2018 ANNUAL MEMBERSHIP FEE IS A SUBSCRIPTION ONLY, WHICH GIVES THEM AN ACCESS TO CONTACT OSRL IN CASE OF OIL SPILL .... OSRL RESERVE S IT RIGHT TO DECLINE TO SUPPLY PARTICIPANTS ARE REQUIRED TO PAY ANNUAL MEMBERSHIP FEES DURING THE YEAR, IRRESPECTIVE OF ANY ACTUAL OIL SPILL. IN CASE OF OI L SPILL, PARTICIPANTS ARE FURTHER REQUIRED TO PAY CHARGES AS PER AGREEMENT FOR ALL EQ UIVALENT HIRED OR MADE AVAILABLE, PERSONNEL AND SERVICES UTILISED. THE RIG HTS OF PARTICIPANTS ARE TRIGGERED ONLY UPON THE OCCURRENCE OF OIL SPILL FOR WHICH SEPARATE CHARGES ARE PAID BY EACH PARTICIPANT MEMBER WHICH IS A FACILITY SERVICE AND NOT IN NATURE OF ROYALTY.... OSRL WILL NOT ALLOCATE THESE EQUIPMENTS AND OPERATING STAFF WITHOUT RECEIVING CALL OUT FEES..... NO REPORTED OIL SPILL OCCURRENCES DURING THE FY 201 4-15 AND HENCE OSRL HAS NOT RECEIVED ANY CALL OUT FEES OTHER THAN THE MEMBE RSHIP SUBSCRIPTIONS FROM INDIAN CLIENTS... THE RIGHT TO USE INDICATES EXISTENCE OF A CONTROL, EXCLUSIVE POSSESSION/CUSTODY AND ENJOYMENT THEREOF LNJ THE USER (OR PAYER OF THE CONSIDERATION) OVER A STIPULATED PERIOD APPELLANTS RELIES DELL INTERNATIONAL SERVICES INDIA.) P LTD (2008) 30 5 ITR 37 AAR ISRO SATELLITE CENTRE (20018) 307 ITR 59 AAR FACTSET RESEARCH SYSTEMS INC (2209) 317 ITR 169 AAR STANDARD CHARTERED BANK VS DDIT (2011) 11 ITR(T 721 MUMBAI) YAHOO INDIA PVT LTD VS DCIT (2011) 140 TTJ 195 (MUM BAI) GVK OIL AND GAS LIMITED VS ADIT (2016) 158 ITD 215 (HYDTRIB) . ................................................... ................................................... .............. ................................................... ................................................... .............. .................. HOWEVER THE MEMBERSHIP AGREEMENT REVEALS THAT CONTROL OF OPERATIONS AND EQUIPMENT (F)THE RESPONSIBILITY FOR THE CONTROL OF ALL MATTER S AT THE LOCATION OF THE CLEAN-UP OPERATION SHALL BE THAT OF THE PARTICIPANT OR THE PARTICIPANTS AFFILIATE CONCERNED. (G) DURING THE PERIOD OF HIRE OF ANY EQUIPMENT HERE UNDER THE PARTICIPANT OR THE PARTICIPANTS AFFILIATE CONCERNED SHALL: (I) TAKE ALL REASONABLE STEPS NECESSARY ON ITS PART TO PROTECT AND PRESERVE SUCH EQUIPMENT IN GOOD WORKING ORDER; :-10-: IT(TP)A NO.32/CHNY/2018 (II) KEEP THE COMPANY FULLY INFORMED OF THE LOCATIO N OF THE EQUIPMENT AND OF ANY MALFUNCTIONING THEREOF OR LOSS OF OR DAMAGE THERETO; (III) NOT PART WITH POSSESSION OF THE EQUIPMENT WIT HOUT THE PRIOR CONSENT OF THE COMPANY SAVE AS REQUIRED BY LAW; (IV) PERMIT THE COMPANY OR ANY CONTRACTOR OR THE E MPLOYEES OR AGENTS OF EITHER OF THEM SUCH ACCESS TO SUCH EQUIPM ENT AS THEY MAY REASONABLY REQUEST; (V) TAKE ALL SUCH STEPS AS MAY BE NECESSARY TO KEEP SUCH EQUIPMENT FREE FROM ALL LIENS, CHARGES AND ENCUMBRANCES, AND TO PREVENT SUCH EQUIPMENT BECOMING THE PROPERTY OF ANY PERSON OTHER THAN THE COMPANY OR ANY CONTRACTOR; (VI NOT MAKE OR ALLOW TO BE MADE ANY MODIFICATION O R ALTERATION TO ANY OF SUCH EQUIPMENT OTHER THAN BY PERSONNEL PROVI DED BY THE COMPANY HEREUNDER OR WITH THE PRIOR CONSENT OF THE COMPANY ANY CONTRACTOR, AND (VII) BE RESPONSIBLE FOR COMPLYING WITH AND OBTAINI NG ANY NECESSARY PERMISSIONS UNDER ANY LAWS FOR THE TIME BEING APPLY ING IN ANY COUNTRY IN WHICH SUCH EQUIPMENT MAY HE DURING THE P ERIOD OF HIRE AND RELATING TO THE OPERATION OF SUCH EQUIPMENT OR THE WORK OF PERSONNEL PROVIDED UNDER THIS AGREEMENT AND FOR DEA LING WITH ANY CUSTOMS FORMALITIES ENTRY PERMITS OR OTHER MATTERS IN CONNECTION WITH THE USE OR RETURN OF SUCH EQUIPMENT HEREUNDER AND THE PERSONNEL PROVIDED HEREUNDER. (H) RETURN OF EQUIPMENT THE PARTICIPANT SHALL HE RESPONSIBLE FOR THE RETURN OF THE SAID EQUIPMNT TO THE BASES OR, IF AGREED BY THE COMPANY, TO A NOMINATION PORT OR AIRPORT AT THE END OF THE PERIOD OF HIRE AT A TIME AND DATE AGREED BET WEEN THE PARTIES. (I)OBLIGATIONS OF THE COMPANY THE COMPANY SHALL ARRANGE THAT SUCH EQUIPMENT SHALL BE KEPT IN GOOD WORKING ORDER AND THAT SUCH STAFF SHALL BE THOROUGHLY FAMIL IAR WITH AND KNOWLEDGEABLE OF ALL EQUIPMENT SUPPLIED HEREUNDER AND WILL OPERAT E AND MAINTAIN THE EQUIPMENT IN THE FIELD UNDER THE DIRECTION OF THE P ARTICIPANT OR THE PARTICIPANTS AFFILIATE, SUBJECT TO THE RIGHT OF THE COMPANY (J) ANNUAL FEES :-11-: IT(TP)A NO.32/CHNY/2018 CO-PARTICIPANT HOLDING THE SAME TOTAL NUMBER OF CLA SS A, B AND C ORDINARY SHARES IN THE CAPITAL OF THE COMPANY (WHERE THE CLA SS A ORDINARY SHARES ARE CALCULATED IN ACCORDANCE WITH SCHEDULE 2 ) AND SHAL L HE THE APPROPRIATE PROPORTION OF ALL FESS PAYABLE BY PERSONS ENTITLED TO CALL UPON THE EQUIPMENT AND OPERATING STAFF AT THE BASE. THE TOTAL AMOUNT R AISED BY THE COMPANY BY WAY OF FEES PURSUANT TO THIS CLAUSE 6 SHALL NOT EXC EED THE ANTICIPATED COSTS AND EXPENSES OF THE COMPANY DURING THAT PERIOD AS APPRO VED BY THE PARTICIPANTS. FROM THE ABOVE, THE FOLLOWING CONCLUSIONS EMERGE VI Z, IT IS A CASE OF GIVING THE INFRASTRUCTURE TO THE CUSTOMER ITSELF FOR BEING USED IN THE MANNER DESIRED BY TIE CUSTOMER, ASSESSEE GETS TO HAVE POSSESSION OR CONTROL OF TH E EQUIPMENT, AND HENCE IT IS A CASE OF TAKING ADVANTAGE OF THE SOPHISTICATED EQU IPMENT PROVIDED BY ANOTHER SERVICE PROVIDER. IT IS ALSO A CASE OF POSITIVE ACT OF UTILISATION, APPLICATION OR EMPLOYMENT OF EQUIPMENT FOR THE DESIRED PURPOSE. HENCE, IT IS A CASE OF ROYALTY. 7.2 INVITING OUR ATTENTION TO THE DEFINITION OF ROY ALTY AS PER INDIA-UK DTAA AGREEMENT, WHICH IS EXTRACTED, SUPRA, THE LD. DR SU BMITTED THAT THE MEMBERSHIP PAYMENT RECEIVED BY THE ASSESSEE IS THE CONSIDERATION FOR THE RIGHT TO USE, DESIGN, INFORMATION CONCERNING, INDUSTRIAL EXPERIENCE AND INDUSTRIAL/SCIENTIFIC EQUIPMENT. THEREFORE, IT IS A CASE OF ROYALTY WITHIN THE SCOPE OF INDIA-UK DTAA. WITH REFERENCE TO THE ASSESSEES PLEA, IE AS TO WHETHER THE ASSESSEE IS HAVING A PE IN INDIA, THE LD. DR INVIT ING OUR ATTENTION TO THE ARTICLE 5 OF THE INDIA-UK DTAA , WHICH IS EXTRACTED AS UNDER: ARTICLE 5 PERMANENT ESTABLISHMENT 1. FOR THE PURPOSES OF THIS CONVENTION, THE TERM PE RMANENT ESTABLISHMENT MEANS A FIXED PLACE OF BUSINESS THROU GH WHICH THE BUSINESS OF AN ENTERPRISE IS WHOLLY OR PARTLY CARRIED ON. 2. THE TERM PERMANENT ESTABLISHMENT SHALL INCLUDE E SPECIALLY: :-12-: IT(TP)A NO.32/CHNY/2018 A B C D. E. F G J. K. PROVIDED THAT FOR THE PURPOSES OF THIS PARAGRAPH AN ENTERPRISE SHALL BE DEEMED TO HAVE A PERMANENT ESTABLISHMENT IN A CONTR ACTING STATE AND TO CARRY ON BUSINESS THROUGH THAT PERMANENT ESTABLISHMENT IF IT PROVIDES SERVICES OR FACILITIES IN CONNECTION WITH, OR SUPPLIES PLANT AN D MACHINERY ON HIRE USED OR TO BE USED IN, THE PROSPECTING FOR, OR EXTRACTION OR P RODUCTION OF, MINERAL OILS IN THAT STATE. SUBMITTED THAT SINCE THE IMPUGNED PAYMENTS RECEIVED BY THE ASSESSEE IS FROM THE INDIAN OIL EXPLORATION/PRODUCTION COMPANIES TOW ARDS PROVISION OF SERVICES OF TECHNICAL OR OTHER PERSONNEL AND EQUIPMENT ON HIRE ETC, THE AO / THE LD CIT(A) ARE CORRECT IN HOLDING THAT THE ASSESSEE IS DE EMED HAVE A PERMANENT ESTABLISHMENT IN INDIA. 7.3 THE LD DR FURTHER INVITING OUR ATTENTION TO THE PROVISIONS OF EXPLANATION2 TO SECTION 9 (1) (VI) OF THE ACT AND SECTION 44BB O F THE ACT, WHICH ARE EXTRACTED BELOW, EXPLANATION 2. FOR THE PURPOSES OF THIS CLAUSE, R OYALTY MEANS CONSIDERATION INCLUDING ANY LUMP SUM CONSIDERATION BUT EXCLUDING ANY CONSIDERATION WHICH WOULD BE THE INCOME OF THE RECIPIENT CHARGEABLE UND ER THE HEAD CAPITAL GAINS ) FOR (I) THE TRANSFER OF ALL OR ANY RIGHTS (INCLUD ING THE GRANTING OF A LICENCE IN RESPECT OF A PATENT, INVENTION, MODEL, DESIGN, SECR ET FORMULA OR PROCESS OR :-13-: IT(TP)A NO.32/CHNY/2018 TRADE MARK OR SIMILAR PROPERTY; (II) THE IMPARTING OF ANY INFORMATION CONCERNING THE WORKING OF, OR THE USE OF, A PATENT, INVENTION, MODEL, DESIGN, SECRET FORMULA OR PROCESS A ARK OR SIMILAR PROPERTY; (III) THE USE OF ANY PATENT, INVENTION, MODEL, DESI GN, SECRET FORMULA OR PROCESS OR TRADE MARK OR SIMILAR PROPERTY; (IV) THE IMPARTING OF ANY INFORMATION CONCERNING TE CHNICAL, INDUSTRIAL, COMMERCIAL OR SCIENTIFIC KNOWLEDGE, EXPERIENCE OR S KILL; (IVA) THE USE OR RIGHT TO USE ANY INDUSTRIAL, COMME RCIAL OR SCIENTIFIC EQUIPMENT BUT NOT INCLUDING THE AMOUNTS REFERRED TO IN SECTIO N 44BB; THE TRANSFER OF ALL OR ANY RIGHTS (INCLUDING THE GR ANTING OF A LICENCE) IN RESPECT OF ANY COPYRIGHT, LITERARY, ARTISTIC OR SCIENTIFIC WOR K INCLUDING FILMS OR VIDEO TAPES FOR USE IN CONNECTION WITH TELEVISION OR TAPES FOR USE IN CONNECTION WITH RADIO BROADCASTING, BUT NOT INCLUDING CONSIDERATION FOR T HE SALE, DISTRIBUTION OR EXHIBITION OF CINEMATOGRAPHIC FILMS ; OR (VI) THE RENDERING OF ANY SERVICES IN CONNECTION WI TH THE ACTIVITIES REFERRED TO IN SUB-CLAUSES(1) TO (IV), (IVA) AND(V). ................................................... ................................................... .............. .................................. 44BB, (1) NOTWITHSTANDING ANYTHING TO THE CONTRARY CONTAINED IN SECTIONS 28 TO 41 AND SECTIONS 43 AND 43A, IN THE CASE OF AN ASSESSEE, BEING A NON- RESIDENT, ENGAGED IN THE BUSINESS OF PROVIDING SERV ICES OR FACILITIES IN CONNECTION WITH, OR SUPPLYING PLANT AND MACHINERY O N HIRE USED, OR TO BE USED, IN THE PROSPECTING FOR, OR EXTRACTION OR PRODUCTION OF, MINERAL OILS, A SUM EQUAL TO TEN PER CENT OF THE AGGREGATE OF THE AMOUNTS SPE CIFIED IN SUBSECTION (2) SHALL BE DEEMED TO BE THE PROFITS AND GAINS OF SUCH BUSINESS CHARGEABLE TO TAX UNDER THE HEAD PROFITS AND GAINS OF BUSINESS OR PRO FESSION: SUBMITTED THAT THOUGH THE IMPUGNED RECEIPTS ARE IN THE NATURE OF ROYALTY, HOWEVER, THEY ARE FALLING WITHIN THE SCOPE OF CL AUSE ( IV A) OF EXPLANATION 2 TO SECTION 9 (1)(VI) R.W.S. 44BB, THEREFORE, THE A O IS CORRECT IN ASSESSING THE INCOME AS AN INCOME FROM BUSINESS U/S 44BB OF THE A CT WHICH HAS BEEN RIGHTLY :-14-: IT(TP)A NO.32/CHNY/2018 UPHELD BY THE LD CIT(A). THOUGH THE ASSESSEE C HALLENGED THE ORDER OF THE LD CIT(A) AGAINST THESE FINDINGS , HOWEVER, IT HAS NOT FURNISHED ANY EVIDENCE BEFORE THIS HONBLE TRIBUNAL TO PROVE THAT THE IMPUGNED SU BSCRIPTION/MEMBERSHIP FEE RECEIVED FROM THE PARTICIPANTS, VIS., ONGC LTD., CA IRN INDIA LTD. AND RELIANCE INDUSTRIES LTD., ARE NOT IN THE BUSINESS FOR PROSP ECTING FOR, OR EXTRACTION OR PRODUCTION OF MINERAL OILS AS PER EXPLANATION U/S. 44BB OF THE ACT. THEREFORE, THE LD. DR SUPPORTED THE ORDERS OF THE A O/ THE LD. CIT (A) AND PLEADED TO DISMISS THE ASSESSEES APPEAL . 8. WE HEARD THE RIVAL SUBMISSIONS. THE ASSESSEE, A NON-RESIDENT COMPANY IS ENGAGED IN THE RESPONDING TO OIL SPILLS ON A WORLDW IDE BASIS, ASSISTING AND ADVISING ON OIL SPILL PREPAREDNESS. IT ADMITTED IN ITS RETURN THE TRAINING FEES RECEIVED FROM RELIANCE INDUSTRIES LIMITED, CAIRN IN DIA LIMITED, TO THE EXTENT OF RS. 35,62,700/-AS AN INCOME , HOWEVER, HAS NOT ADMI TTED MEMBERSHIP FEES RECEIVED FROM THE SUBSCRIBERS VIZ., ONGC LTD., CAIR N INDIA LTD. AND RELIANCE INDUSTRIES LTD., TO THE EXTENT OF RS. 5,65,97,103/- PLEADING THAT THESE RECEIPTS ARE NOT IN THE NATURE OF ROYALTY AS THEY WERE NOT PAID FOR THE USE OR RIGHT TO USE ANY INFORMATION OR EQUIPMENT ETC. THE ASSESSEE W OULD BE ENTITLED TO A SEPARATE CALL-OUT FEES WHICH MAY ARISE ONLY AFTER A N OCCURRENCE OF OIL SPILLS AND FOLLOWING A REQUEST FROM THE SUBSCRIBER IN CASE OF FIRST USE OF SPECIFIED EQUIPMENT, PERSONNEL AND SERVICES THAT ARE UTILIZED , THE SUBSCRIBERS WILL BE CHARGED AGREED SCALE OF FEES. IN THE ASSESSEES CA SE, NO INFRASTRUCTURE, NO POSSESSION OR CONTROL OF ANY EQUIPMENT WAS MADE AVA ILABLE TO ITS CUSTOMER FROM :-15-: IT(TP)A NO.32/CHNY/2018 THE RELEVANT ASSESSMENT YEAR AND THERE IS NO CASE OF ANY POSITIVE ACT OF UTILIZATION, APPLICATION OR EMPLOYMENT OF EQUIPMENT FOR DESIRED PURPOSE OF CUSTOMER. 9. ON THE OTHER HAND, THE REVENUE ON DUE ANALYSIS O F VARIOUS CLAUSE OF AGREEMENT, EXTRACTED, SUPRA, SUBMITTED THAT MEMBERS HIP/ SUBSCRIPTION ENTITLES THE SUBSCRIBERS TO REQUEST THE ASSESSEE THE SERVICE S TOWARDS OIL SPILL RESPONSE OPERATIONS AND PROVIDE OIL SPILL EQUIPMENT (OWNED AND MAINTAINED BY ASSESSEE ), OIL SPILL SPECIALISTS (EMPLOYED BY ASSESSEE) AND RE LATED OIL SPILL SERVICES IN THE EVENT OF AN OIL SPILL. THE NON MEMBERS ARE NOT GUA RANTEED A RESPONSE AND WILL BE REQUIRED TO SIGN A NON-MEMBER AGREEMENT. COMPAR ED TO PARTICIPANT MEMBERS, THE RATES FOR NON-MEMBERS FOR OIL SPILL RE SPONSE OPERATIONS WILL BE DOUBLE AND EVEN THE SERVICES AVAILABLE DIFFER TO TH OSE OF MEMBER PARTICIPANTS. IN THIS REGARD, THE REVENUE RELIED ON THE DEFINITION OF ROYALTY AS PER INDIA-UK DTAA AND SUBMITTED THAT THE PAYMENTS OF ANY KIND RECEIVED AS A CONSIDERATION FOR THE USE OF OR RIGHT TO USE, DES IGN OR MODEL, PLAN, SECRET FORMULA OR PROCESS, OR FOR INFORMATION CONCERNING INDUSTRIAL COMMERCIAL OR SCIENTIFIC EXPERIENCE ETC FALLS WITHIN ITS SCOPE. THEREFORE, THE IMPUGNED RECEIPTS FROM THE INDIAN OIL EXPLORATION/PRODUCTION COMPANIE S TOWARDS PROVISION OF SERVICES OF TECHNICAL OR OTHER PERSONNEL AND EQUIPM ENT ON HIRE ETC, ARE IN THE NATURE OF ROYALTY AND THE ASSESSEE IS DEEMED HAV E A PERMANENT ESTABLISHMENT IN INDIA AS PER INDIA-UK DTAA, HOWEVER, SINCE TH ESE RECEIPTS ARE FALLING WITHIN THE SCOPE OF CLAUSE ( IV A) OF EXPLANATION 2 TO SE CTION 9 (1)(VI) RW S44BB , :-16-: IT(TP)A NO.32/CHNY/2018 THEREFORE, THE ASSESSMENT MADE BY THE A O THAT IT IS AN INCOME FROM BUSINESS U/S 44BB OF THE ACT IS CORRECTLY SUSTAINED BY THE L D CIT(A). 10. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND FI ND MERIT IN THE SUBMISSIONS OF THE REVENUE. THE ASSESSEE EXISTS TO RESPOND TO OIL SPILLS, WHEREVER IN THE WORD THEY MAY OCCUR, BY PROVIDING P REPAREDNESS, RESPONSE AND INTERVENTION SERVICES. THE MEMBERSHIP / SUBSCRIPT IONS ENTITLES THE SUBSCRIBERS TO REQUEST THE ASSESSEE THE SERVICES TOWARDS OIL SP ILL RESPONSE OPERATIONS AND PROVIDE OIL SPILL EQUIPMENT (OWNED AND MAINTAINED B Y ASSESSEE ), OIL SPILL SPECIALISTS (EMPLOYED BY ASSESSEE) AND RELATED OI L SPILL SERVICES IN THE EVENT OF AN OIL SPILL, APART FROM OTHER SERVICES AND FACILIT IES. WE HAVE GONE THROUGH THE COPY OF THE PARTICIPANT AGREEMENT IN THE PAPER BOOK WHEREIN IN CLAUSE B, UNDER OBLIGATIONS OF THE COMPANY IS EXTRACTED AS UNDER: 3. (A) (A) IN ADDITION TO THE FOREGOING THE COMPANY SHALL, FOR SUCH REASONABLE FEES AS MAY FROM TIME TO TIME BE DETERMINED BY THE COMPA NY AND NOTIFIED IN WRITING TO THE PARTICIPANT, MAKE AVAILABLE TO THE P ARTICIPANT OR TO ANY PARTICIPANTS AFFILIATE NOMINATED BY THE PARTICIPAN T ANY OF THE FOLLOWING FACILITIES AND SERVICES TO THE EXTENT THAT IN THE C OMPANYS REASONABLE OPINION IT IS PRACTICABLE TO DO SO: (I) STORAGE FACILITIES; (II) MAINTENANCE AND TESTING FACILITIES FOR AN EVALUATIO N OF EQUIPMENT AT THE BASE; (III) TRAINING OF STAFF BOTH AT THE BASES AND/OR AT OTHER MUTUALLY AGREED LOCATIONS IN ALL ASPECTS OF PREPARING FOR AN D RESPONDING TO OIL SPILLS; AND (IV) ADVISORY AND CONSULTANCY SERVICES RELATING TO THE P LANNING OF RESPONSES TO OIL SPILLS AND THE IMPLEMENTATION OF M EASURES TO RESPOND TO OIL SPILLS. :-17-: IT(TP)A NO.32/CHNY/2018 IN PURSUANCE OF THE ABOVE PROVISION ONLY, THE AS SESSEE HAS RECEIVED THE TRAINING FEES FROM ITS PARTICIPANTS , IE THE INDIA N OIL EXPLORATION/PRODUCTION COMPANIES AND ADMITTED THEM AS AN INCOME IN ITS RE TURN ALSO. THEREFORE, THE SUBSCRIPTION FEES RECEIVED BY THE ASSESSEE FROM TH E PARTICIPANTS, WHICH CLEARLY ENTITLES THEM FOR THE RIGHT TO THE SPECIALISED SERV ICES, EQUIPMENT ETC, ARE CLEARLY FALLING WITHIN THE SCOPE OF THE DEFINITION OF ROYAL TY AS PER INDIA-UK DTAA AND THE ASSESSEE IS DEEMED TO HAVE A PERMANENT ESTABLI SHMENT IN INDIA AS PER INDIA-UK DTAA. SINCE, THE IMPUGNED PAYMENTS ARE R ECEIVED FROM THE INDIA OIL EXPLORATION/PRODUCTION COMPANIES, THEY ARE FALLING WITHIN THE SCOPE OF CLAUSE (IVA) OF EXPLANATION 2 TO SECTION 9(1)(VI) R.W.S. 4 4BB AND THEREFORE, WE DO NOT FIND ANY REASON TO INTERFERE WITH THE ORDER OF THE LD. CIT(A). THE CORRESPONDING GROUNDS OF THE ASSESSEE FAIL. 11. WITH REGARD TO THE LEVY OF INTEREST U/S. 234B, THE LD. AR SUBMITTED THAT THE ENTIRE INCOME OF THE ASSESSEE WAS SUBJECTED TO TAX WITHHOLDING U/S. 195 AND THERE WAS NO REQUIREMENT OF THE ASSESSEE TO PAY ANY ADVANCE TAX. ALTHOUGH, THE ASSESSEE TOOK A SPECIFIC PLEA BEFORE THE LD. CIT( A), THE LD. CIT(A) DISMISSED THE APPEAL STATING THAT THE LEVY OF INTEREST U/S. 2 34B IS MANDATORY. IT APPEARS THAT THE AO HAS NOT DISCUSSED THIS ISSUE IN THE ASSESSMENT ORDER. THEREFORE, WE DEEM IT TO FIT TO REMIT THIS ISSUE FOR A FRESH E XAMINATION TO THE A O. :-18-: IT(TP)A NO.32/CHNY/2018 12. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS TREATED AS PARTLY ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED ON 29 TH APRIL, 2021 AT CHENNAI. SD/- ( . ' ) (DUVVURU RL REDDY) $% /JUDICIAL MEMBER SD/- ( ) (S. JAYARAMAN) % /ACCOUNTANT MEMBER /CHENNAI, 1 /DATED: 29 TH APRIL , 2021 JPV (+3454 /COPY TO: 1. ' / APPELLANT 2. +,' /RESPONDENT 3. 6 ) ( /CIT(A) 4. 6 /CIT 5. 4+ /DR 6. 9 /GF