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

MA 513/MUM/2019

• Counselvise Citation: [2020] 111 COUNSELVISE.COM (IT) 4750 (ITAT-MUMBAI)
• Duration Of Justice: 5 month(s) 1 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 14-02-2020
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: I
• Assessment Year: 2013-2014
• Appeal Filed On: 12-09-2019
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: MICHAEL JERALD
• Keywords: Transfer pricing; International transaction
• Section: 201; 13

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL I BENCH, MUMBAI BEFORE SHRI SAKTIJIT DEY , JUDICIAL MEMBER AND SHRI RAJESH KUMAR, ACCOUNTANT MEMBER M.A. NO. 513 /MUM./2019 ( ARISING OUT OF ITA NO. 969 /MUM./201 7 ) ( ASSESSMENT YEAR : 20 13 14 ) LINK LATERS LLP , TOWER 3 27 32, INDIA BULLS FINANCE CENTRE ELPHINSTONE MILL COMPOUND SENAPATI BAPAT MARG, ELPHINSTONE (W) MUMBAI 400 013 PAN AABCL5182G . APPELLANT V/S DY. COMMISSIONER OF INCOME TAX INTERNATIONAL TRANSACTION CIRCLE 3(1)(2), MUMBAI . RESPONDENT ASSESSEE BY : SHRI SOLI E. DASTUR A/W SHRI NIRAJ SETH REVENUE BY : SHRI MICHAEL JERALD DATE OF HEARING 29 .11.2019 DATE OF ORDER 14.02.2020 O R D E R PER SAKTIJIT DEY. J.M. BY WAY OF THIS APPLICATION , THE ASSESSEE SEEKS RECTIFICATION OF THE ORDER DATED 21 ST JUNE 2019, PASSED IN ITA NO.969/MUM./2017. 2. SHRI S.E. DASTUR, LEANED SR. COUNSEL FOR THE ASSESSEE SUBMITTED , WHILE DECIDING GROUND NO.2 RAISED BY THE ASSESSEE RELATING TO EXISTENCE OF PERMANENT ESTABLISHME NT (P E) IN INDIA, THE TRIBUNAL FOLLOWING ITS 2 LINK LATERS LLP DECISION IN ASSESSEES OWN CASE FOR THE ASSESSMENT YEAR 2012 13 HAS RESTORED THE ISSUE TO THE ASSESSING OFFICER TO VERIFY ASSESSEES CLAIM THAT TH E EMPLOYEES OF THE ASSESSEE HAVE RENDERED SERVI CE IN INDIA FOR A PERIO D LESS THAN 90 DAYS IN THE RELEVANT PREVIOUS YEAR. THE LEA R NED SR. COUNSEL SUBMITTED , IN COURSE OF ASSESSMENT PROCEEDINGS, IN RESPONSE TO THE QUERY RAISED BY THE ASS ESSING OFFICER, THE ASSESSEE HAD FURNISHED THE DETAILS OF EMPLOYEES / PERSONNEL WHO HAVE RE NDERED SERVICES IN INDIA DURING THE PREVIOUS YEAR AND THE NUMBER OF DAYS FOR WHICH THEY HAVE RENDERED SERVICES IN INDIA IS 42 DAYS, HENCE, LESS THAN 90 DAYS. THEREFORE , AS PER ARTICLE 5(2)(K)(I) OF THE INDIA U.K. TAX TREATY, THERE IS NO PE IN INDIA. HE SUB MITTED , THE AFORESAID FACTUAL POSITION HAS BEEN ACCEPTED BY THE ASSESSING OFFICER AS WELL AS THE DRP AND ALSO ACCEPTED BY THE DEPARTMENTAL REPRESENTATIVE IN HIS SUBMISSIONS. HE SUBMITTED , WHEN THE FACTS RELATING TO THE STAY OF ASSESSEES EMP LOYEES / PERSON NEL IN INDIA ARE AVAILABLE ON RECORD AND ALREADY BEEN EXAMINED, THERE IS NO NEED FOR FURTHER VERIFICATION BY THE ASSESSING OFFICER. THUS, IT HAS BEEN SUBMITTED THAT INSTEAD OF RESTORING THE ISSUE, THE TRIBUNAL SHOULD HAVE DECIDED THE ISSUE FINALLY BY ALLOW ING ASSESSEES CLAIM. HAVING NOT DONE SO, THE TRIBUNAL MADE A MISTAKE IN RESTORING THE ISSUE TO THE ASSESSING OFFICER FOR VERIFYING THE ASSESSEES CLAIM. IN SUPPORT OF HIS CONTENTION, HE RELIED UPON THE D ECISION OF THE TRIBUNAL IN LINK LATERS LLP V/S DCIT, MA NO.238/MUM./2019, DATED 12 TH MARCH 2018. 3 LINK LATERS LLP 3. THE LEARNED DEPARTMENTAL REPRESENTATIVE STRONGLY OPPOSING THE CONTENTIONS RAISED ON BEHALF OF THE ASSESSEE SUBMITTED , THE TRIBUNAL HAVING CONSIDERED ALL MATERIAL FACTS , SINCE , HAS TAKEN A CONSCIOUS DECISION TO RESTORE THE ISSUE TO THE ASSESSING OFFICER FOR FACTUAL VERIFICATION, NO MISTAKE CAN BE FOUND IN THE SAID DECISION OF THE TRIBUNAL. HE SUBMITTED , IN THE GARB OF RECTIFICATION THE ASSESSEE ACTUALLY WANTS REVIEW OF THE ORDER PASSED BY THE TRIBUNAL. THEREFORE, HE SUBMITTED , THE APPLICATION FILED BY THE ASSESSEE BEING DEVOID OF MERIT SHOULD BE DISMISSED. 4. WE HAVE CONSIDERED RIVAL SUBMISSIONS AND PERUSED THE MATERIAL ON RECORD. THE ISSUE ARISING FOR CONSIDERATION BEFORE THE TRIB UNAL WAS , WHETHER IN THE YEAR UNDER CONS IDERATION THE ASSESSEE HAD A PE IN INDIA? IT IS THE CONTENTION OF THE ASSESSEE THAT DURING THE RELEVANT PREVIOUS YEAR, ASSESSEES EMPLOYEES / PERSONNEL WERE IN INDIA FOR RENDERING SERVICES FOR A PERIOD OF LESS THAN 9 0 DAYS , TO BE PRECISE, 42 DAYS. IT IS THE FURTHER CONTENTION OF THE ASSESSEE THAT THE AFORESAID FACTUAL POSITION HAS BEEN ACCEPTED BY THE ASSESSING OFFICER AND LEARNED DRP. HOWEVER, ON A PERUSAL OF RECORD WE FIND THAT THOUGH DU RING THE ASSESSMENT PROCEEDIN GS THE ASSESSEE HAD MADE SUBMISSIONS THAT IN THE RELEVANT PREVIOUS YEAR, ITS EMPLOYEES / PERSONNEL WERE IN INDIA FOR RENDERING SERVICES FOR A PERIOD O F 42 DAYS, HENCE, THERE IS NO PE AS PER ARTICLE 5(2)(K)(I) OF THE INDIA U.K. TAX 4 LINK LATERS LLP TREATY, H OWEVER, THE ASSE SSING OFFICER APPARENTLY HAS NOT ACCEPTED THE AFORESAID CONTENTION OF THE ASSESSEE. HAD THE ASSESSING OFFICER ACCEPTED THE AFORESAID CLAIM OF THE ASSESSEE, THEN HE WOULD NOT HAVE CONCLUDED THAT IN THE YEAR UNDER CONSIDERATION, T HE ASSESSEE HAD A FIXED PLAC E PE IN INDIA. THIS IS VERY MUCH EVIDENT FROM THE CONCLUDING PART OF THE ASSESSMENT ORDER. EVEN , A PE RUSAL OF THE ORDER PASSED BY LEARNED DRP WOULD REVEAL THAT EXCEPT RELYING UPON THEIR OWN DECISION IN THE ASSESSMENT YEAR 201 2 13 IN ASSESSEES OWN CASE, LE ARNED DRP HAS NOT GIVEN ANY INDEPENDENT FINDING OF THEIR OWN EITHER ON THE ISSUE OF EXISTENCE OF P E OR ANY OTHER ISSUE. SUFFICE TO SAY, NEITH ER THE ASSESSING OFFICER NOR LEARNED DRP HAVE GIVEN ANY FACTUAL FINDING ON THE ASSESSEES CLAIM THAT DURING THE PRE VIOUS YEAR RELEVANT TO THE ASSESSMENT YEAR UNDER DI SPUTE, EMPLOYEES / PERSONNEL OF THE ASSESSEE W ER E IN INDIA FOR ONLY 42 DAYS AND NOT MORE THAN 90 DAYS. WHILE DECIDING ASSESSEES GROUND RAISED ON THE ISSUE OF EXISTENCE OF PE, THE TRIBUNAL FOLLOWING ITS DECISION IN ASSESSEES OWN CASE FOR THE ASSESSMENT YEAR 2012 13 HAS ACCEPTED IN PRINCIPLE THAT THE EXPRESSION ANY 12 MONTH PERIOD AS MENTIONED IN ARTICLE 5(2)(K)(I) OF THE INDIA U.K. TAX TREATY WOULD MEAN THE PREVIOUS YEAR OR FINANCIAL YEAR AS PER SECTI O N 3 OF THE ACT. FINDING THAT ASSESSEES CLAIM REGARDING STAY OF ITS EMPLOYEES / PERSONNEL IN INDIA FOR RENDERING SERVICES FOR AN AGGREGATE PERIOD OF 42 DAYS HAS NOT BEEN FACTUALLY VERIFIED EITHER BY THE ASSESSING OFFICER OR BY LEARNED DRP, THE TRIBUNAL 5 LINK LATERS LLP WH ILE ALLOWING THE GROUND RAISED BY THE ASSESSEE HAS ISSUED A DIRECTION TO THE ASSESSING OFFICER TO FACTUALLY VERIFY ASSESSEES CLAIM REGARDING STAY OF ITS EMPLOYEES / PERSONNEL IN INDIA FOR AN AGGREGATE PERIOD OF 42 DAYS DURING THE PREVIOUS YEAR RELEVANT TO THE ASSESSMENT YEAR UNDER DISPUTE. IN OUR CONSIDERED OPINION, THERE CANNOT BE ANY MISTAKE IN THE AFORESAID DIRECTION OF THE TRIBUNAL AS ASSESSEES CLAIM , THOUGH , WAS MADE BEFORE THE REVENUE AUTHORITIES, HOWEVER, NEITH ER THE ASSESSING OFFICER NOR LEARNED D RP HAS RECORDED ANY FACTUAL FINDING REGARDING THE AFORESAID CLAIM OF THE ASSESSEE. IN THE AFORESAID FACTUAL POSITION, IT BECOMES IMPERATIVE TO FACTUALLY VERIFY ASSESSEES CLAIM REGARDING THE STAY OF ITS EMPLOYEES / PERSONNEL IN INDIA. IN CASE, ASSESSEES C LAIM REGARDING STAY OF ITS EMPLOYEES / PERSONNEL IN INDIA IS FOUND TO BE CORRECT, THEN IT HAS TO BE HELD THAT DURING THE YEAR UNDER CONSIDE RATION, THE ASSESSEE DID NOT HAVE A NY PE IN INDIA. CONSIDERED IN THE AFORESAID PERSPECTIVE, WE DO NOT FIND ANY MISTAK E , MUCH LESS , A MISTAKE APPARENT ON THE FACE OF RECORD AS ENVISAGED UNDER SECTION 254 (2) OF THE ACT. WHAT THE ASSESSEE WANTS BY FILING THIS APPLICATION IS A DECISION FROM THE TRIBUNAL IN A PARTICULAR MANNER AND TO ITS OWN LIKING. THIS CANNOT BE THE I NTENT AND PURPOSE OF SECTION 254 (2) OF THE ACT WHICH IS ONLY FOR RECTIFY ING MISTAKE APPARENT ON THE FACE OF RECORD. IN THE FACTS OF THE PRESENT CASE, THE TRIBUNAL AFTER CONSIDERING ALL RELEVANT FACTS HAS TAKEN A CONSCIOUS DECISION OF DIRECTING THE ASSESSING OFF ICER TO VERIFY ASSESSEES CLAIM REGARDING STAY OF EMPLOYEES / 6 LINK LATERS LLP PERSONNEL IN INDIA FOR RENDERING SERVICE DURING THE PREVIOUS YEAR RELEVANT TO THE ASSESSMENT YEAR UNDER DISPUTE. THAT BEING THE CASE, THERE IS NO MISTAKE IN THE DECISION OF THE TRIBUNAL. AS REGA RDS T HE DECISION OF TRIBUNAL, MUMBAI BENCH , IN CASE OF LINK LATERS LLP (SUPRA) CITED BY THE LEANED SR . COUNSEL FOR THE ASSESSEE, ON CAREFUL READING WE FOUND IT TO BE NOT APPLICABLE TO THE FACTS OF THE PRESENT CASE, AS IT HAS BEEN DECIDED ON THE BASIS OF ITS OWN PECULIAR FACTS. THE TRIBUNAL HAS RECORDED A FINDING OF FACT THAT THE DETAILS OF INCOME ATTRIBUTABLE TO SERVICES RENDERED IN INDIA AND OUTSIDE INDIA WERE FURNISHED BEFORE THE ASSESSING OFFICER AND THE ASSESSING OFFICER HAS FOUND THEM TO BE IN ORDER. HOWEVER, IN THE FACTS OF THE PRESENT CASE, THERE IS NO FINDING BY THE ASSESSING OFFICER REGARDING ASSESSEES CLAIM THAT ITS EMPLOYEES / PERSONNEL STAYED IN INDIA FOR RENDERING SERVI CES FOR A PERIOD OF 42 DAYS. THEREFORE, WE DO NOT FIND MERIT IN THE PRESENT APPLICATION FILED BY THE ASSESSEE. 5. IN THE RESULT, MISC. APPLICATION IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 14.02.2020 SD/ - RAJESH KUMAR ACCOUNTANT MEMBER SD/ - SAKTIJIT DEY JUDICIAL MEMBER MUMBAI, DATED: 14.02.2020 7 LINK LATERS LLP 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 ASSISTANT REGISTRAR ITAT, MUMBAI