LINKLATERS, V. DDIT (IT) 4(1),

MA 392/MUM/2014

• Counselvise Citation: [2015] 124 COUNSELVISE.COM (IT) 2832 (ITAT-MUMBAI)
• Duration Of Justice: 4 month(s) 19 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 20-02-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: L
• Assessment Year: 1997-1998
• Appeal Filed On: 01-10-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: NEENA SINGH
• Assessee Lawyers: S E DASTUR
• Keywords: Permanent establishment
• Section: 154

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL L BENCH, M UMBAI BEFORE HONBLE S/SHRI B.R.BASKARAN (AM) AND VIVEK VARMA,( JM) . . , , MISC.APPLICATION NO.392/MUM/2014 ARISING OUT OF I.T.A. NO.1711/MUM/2004 ( / ASSESSMENT YEAR :1997-98) LINKLATERS & PAINES (NOW LINKLATERS), C/O C C CHOKSHI AND CO., PLOT NO.12, DR.ANNIE BESANT ROAD, OPP. SHIVSAGAR ESTATE, WORLI, MUMBAI-400018 / VS. DIRECTOR OF INCOME TAX (INTL.TAX) 4(1), MUMBAI ( / APPLICANT) .. ( / RESPONDENT) ! ./ '# ! ./ PAN/GIRNO.: 39-044-CX-1480 $ / APPELLANT BY : SHRI S E DASTUR AND SHRI NIRAJ SHETH % $ /RESPONDENT BY : SHRI NEENA SINGH PANDEY & ' % () / DATE OF HEARING : 2.1.2015 *+ % () /DATE OF PRONOUNCEMENT : 20..2.2015 / O R D E R PER B.R.BASKARAN, ACCOUNTANT MEMBER: THE ASSESSEE HAS MOVED THIS MISCELLANEOUS APPLICAT ION SEEKING RECTIFICATION OF THE ORDER DATED 08-08-2014 PASSED IN THE HANDS OF THE ASSESSEE IN ITA NO. 1711/MUM/2004 IN RESPECT OF THE APPEAL FILED BY THE REVENUE FOR ASSESSMENT YEAR 1997-98. 2. THE LD COUNSEL APPEARING FOR THE ASSESSEE SUBMIT TED THAT THE AO HAD TAKEN THE VIEW THAT EVEN WHERE ONLY A PART OF T HE SERVICES WERE PERFORMED IN INDIA, THE ENTIRE INCOME WAS TAXABLE I N INDIA. HOWEVER, THE LD CIT(A) HELD THAT THAT ONLY THE INCOME IN RESPECT OF SERVICES RENDERED IN INDIA IS ATTRIBUTABLE TO THE PERMANENT ESTABLISHMEN T AND THAT PORTION ALONE MA NO. 392/MUM/2014 2 IS TAXABLE IN INDIA. AGAINST THE SAID DECISION OF LD CIT(A), THE REVENUE PREFERRED THE ABOVE SAID APPEAL BEFORE THE TRIBUNAL . THE LD COUNSEL SAID THAT THE IDENTICAL ISSUE WAS CONSIDERED BY THE CO-O RDINATE BENCH OF TRIBUNAL IN THE ASSESSEES OWN CASE IN AY 1995-96 A ND IT WAS DECIDED AGAINST THE ASSESSEE. THIS FACT WAS BROUGHT TO THE NOTICE OF THE BENCH AT THE TIME OF HEARING. SUBSEQUENT TO THE DATE OF THE ORDER PASSED BY THE TRIBUNAL IN THE ASSESSEES CASE FOR AY 1995-96, THE SPECIAL BENCH OF THE TRIBUNAL ALSO CONSIDERED AN IDENTICAL ISSUE IN THE CASE OF ADIT VS. CLIFFORD CHANCE (143 ITD 1) AND IT WAS DECIDED IN FAVOUR OF THE ASSESSEE. THE LD COUNSEL SUBMITTED THAT THE DECISION OF SPECIAL BENC H WAS SPECIFICALLY POINTED OUT TO THE BENCH BOTH AT THE TIME OF ARGUME NTS AND ALSO IN THE NOTES GIVEN TO THE BENCH. HOWEVER, WHILE PASSING T HE ORDER, THE TRIBUNAL HAS FOLLOWED THE DECISION RENDERED IN AY 1995-96 IN PARAGRAPH 6 OF ITS ORDER AND DID NOT CONSIDER THE DECISION OF THE SPEC IAL BENCH REFERRED ABOVE. HE FURTHER SUBMITTED THAT THE BENCH HEARD THE APPEAL FILED BY THE REVENUE FOR 1996-97 AGAINST THE ORDER PASSED BY LD CIT(A) U/S 154 OF THE ACT AND IN THE ORDER PASSED IN RESPECT OF THE SAME, THE TRIBUNAL HAS REFERRED TO THE DECISION OF THE SPECIAL BENCH. ACC ORDINGLY HE SUBMITTED THAT A MISTAKE APPARENT FROM THE RECORD HAS OCCURRE D IN THE IMPUGNED OF THE ORDER OF THE TRIBUNAL IN NOT FOLLOWING THE BIND ING DECISION OF THE SPECIAL BENCH, REFERRED ABOVE. 3. WE HAVE HEARD LD D.R AND ALSO PERUSED THE RE CORD. ADMITTEDLY, THE LD A.R HAD PLACED RELIANCE ON THE DECISION RENDERED BY THE SPECIAL BENCH IN THE CASE OF CLIFFORD CHANCE (SUPRA) AT THE TIME OF HEARING. THERE SHOULD NOT BE ANY DISPUTE THAT THE DECISION RENDERED BY TH E SPECIAL BENCH SHOULD BE PREFERRED OVER TO THE DECISION OF THE DIVISION B ENCH. HENCE, THE IMPUGNED ORDER OF THE TRIBUNAL SUFFERS FROM THE MIS TAKE APPARENT FROM RECORD IN NOT FOLLOWING THE DECISION OF SPECIAL BEN CH AND HENCE THE SAME REQUIRES TO BE CORRECTED. THE ISSUE REGARDING THE QUANTUM OF INCOME ATTRIBUTABLE TO PERMANENT ESTABLISHMENT IS DISCUSSE D IN PARAGRAPH 12 OF MA NO. 392/MUM/2014 3 THE ORDER. IN VIEW OF THE DISCUSSIONS MADE SUPRA, WE ORDER THE EXISTING PARAGRAPH 12 OF THE ORDER OF THE TRIBUNAL DATED 8.8 .2004 PASSED IN ITA NO.1711/MUM/2004 RELATING TO AY 1997-98 SHALL BE DE LETED AND IN THAT PLACE FOLLOWING PARAGRAPH SHALL BE INSERTED. 12. WE SHALL NOW TAKE UP THE APPEAL FILED BY THE REVENUE. THE GROUNDS NUMBERED AS 1 & 4 RELATE TO THE ASSESSMENT OR PROFESSIONAL RECEIPTS. THOUGH THE ASSESSING OFFICER HAS ASSESSE D THE ENTIRE PROFESSIONAL RECEIPTS AS THE INCOME OF THE ASSESSEE , WE NOTICE THAT THE LD CIT(A) HAS HELD THAT, ONLY THAT PORTION OF T HE INCOME RELATING TO THE SERVICES PERFORMED IN INDIA ALONE IS ASSESSA BLE UNDER THE ACT. BOTH THE PARTIES ADMITTED THAT THE TRIBUNAL HAS CON SIDERED IDENTICAL ISSUE IN AY 1995-96 AND HAS HELD THAT THE ENTIRE PR OFITS DIRECTLY OR INDIRECTLY ATTRIBUTABLE TO THE PERMANENT ESTABLISHM ENT IS ASSESSABLE AND ACCORDINGLY UPHELD THE ORDER OF THE ASSESSING O FFICER IN THAT YEAR. HOWEVER, THE LD A.R SUBMITTED THAT THE SPECI AL BENCH OF TRIBUNAL HAS CONSIDERED AN IDENTICAL ISSUE IN THE C ASE OF CIT VS. CLIFFORD CHANCE (143 ITD 1), WHEREIN THE ISSUE HAS BEEN DECIDED IN FAVOUR OF THE ASSESSEE. ACCORDINGLY HE SUBMITTED T HAT THE ORDER OF THE LD CIT(A) ON THIS ISSUE SHOULD BE UPHELD. WE A GREE WITH THE CONTENTIONS OF LD A.R. SINCE THE DECISION OF SPECI AL BENCH IS BINDING ON US, WE DIRECT THE ASSESSING OFFICER TO ASSESS TH E INCOME IN ACCORDANCE WITH THE DECISION RENDERED BY THE SPECIA L BENCH IN THE ABOVE CITED CASE. ACCORDINGLY, WE REJECT THE GROUN D URGED BY THE REVENUE ON THIS ISSUE 4. IN THE RESULT, THE MISCELLANEOUS APPLICATION FILED BY THE ASSESSEE IS ALLOWED. THE ABOVE ORDER WAS PRONOUNCED IN THE OPEN COURT ON 20TH FEB, 2015. *+ & , - ! . 20TH FEB, 2015 + % /' 0 SD SD ( / VIVEK VARMA) ( . . , / B.R. BASKARAN ) /JUDICIAL MEMBER / ACCOUNTANT MEMBER & !' MUMBAI:20TH FEB,2014. . . ./ SRL , SR. PS MA NO. 392/MUM/2014 4 !'#$% &%'# / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. & ?( ( ) / THE CIT(A)- CONCERNED 4. & ?( / CIT CONCERNED 5. 6. @/ ( A , ) A , & !' / DR, ITAT, MUMBAI CONCERNED /B C' / GUARD FILE. D & / BY ORDER, TRUE COPY E !' (ASSTT. REGISTRAR) ) A , & !' /ITAT, MUMBAI