KPMG, V. DCIT RG 11(2),

MA 8/MUM/2013

• Counselvise Citation: [2013] 124 COUNSELVISE.COM (IT) 0667 (ITAT-MUMBAI)
• Duration Of Justice: 5 month(s) 4 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 12-06-2013
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: L
• Assessment Year: 2003-2004
• Appeal Filed On: 07-01-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Rule of consistency

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL IN THE INCOME TAX APPELLATE TRIBUNAL IN THE INCOME TAX APPELLATE TRIBUNAL IN THE INCOME TAX APPELLATE TRIBUNAL L LL L BENCH, BENCH, BENCH, BENCH, MUMBAI MUMBAI MUMBAI MUMBAI , ! ! ! ! ' , . BEFORE BEFORE BEFORE BEFORE SHRI SHRI SHRI SHRI . SANJAY ARORA SANJAY ARORA SANJAY ARORA SANJAY ARORA, AM , AM , AM , AM & & & & SHRI SHRI SHRI SHRI VIJAY PAL VIJAY PAL VIJAY PAL VIJAY PAL RAO, JM RAO, JM RAO, JM RAO, JM '' '' '' '' # # # #: :: :/ // /MISCELLANEOUS APPLICATIONS MISCELLANEOUS APPLICATIONS MISCELLANEOUS APPLICATIONS MISCELLANEOUS APPLICATIONS 8 8 8 8 TO TO TO TO 11/MUM/2013 11/MUM/2013 11/MUM/2013 11/MUM/2013 ARISING OUT OF ITA NO ARISING OUT OF ITA NO ARISING OUT OF ITA NO ARISING OUT OF ITA NOS SS S.3303 .3303 .3303 .3303,4266,6286,&1952 ,4266,6286,&1952 ,4266,6286,&1952 ,4266,6286,&1952/MUM/2008 /MUM/2008 /MUM/2008 /MUM/2008 ( (( ( I# I# I# I# J J J J / ASSESSMENT YEAR : ASSESSMENT YEAR : ASSESSMENT YEAR : ASSESSMENT YEAR :2003 2003 2003 2003- -- -04 0404 04,2000 ,2000 ,2000 ,2000- -- -01 & 2002 01 & 2002 01 & 2002 01 & 2002- -- -03 0303 03) )) ) M/S KPMG LODHA EXCELUS, 1 ST FLOOR APOLLO MILLS COMPOUND, N. M. JOSHI, MAHALAKSHMI MUMBAI-400011 # # # # / VS. THE JT. COMMISSIONER OF INCOME TAX, RANGE 11(2) MUMBAI !K ./ L ./ PAN/GIR NO. :AAAFK1415H ( KM / APPLICANT APPLICANT APPLICANT APPLICANT) .. ( NOKM / RESPONDENT RESPONDENT RESPONDENT RESPONDENT) KM KM KM KM P P P P / APPICANT BY : SHRI PRASHANT MAHESHWARI & SHIR SHEETAL JAIN NOKM NOKM NOKM NOKM Q QQ Q P P P P /RESPONDENT BY : RAJARSHI DWIVEDY # # # # Q QQ Q R R R R / DT. OF HEARING : 7 TH JUNE 2013 SJ SJ SJ SJ Q QQ QR R R R / DT.OFPRONOUNCEMENT: 12 TH JUNE 2013 T / O R D E R PER : ' , . . / VIJAY PAL RAO, JM THESE MISCELLANEOUS APPLICATIONS BY THE ASSESSEE A RE DIRECTED AGAINST THE ORDER DATED 25.1.2012 OF THIS TRIBUNAL WHEREBY THE APPEALS OF THE ASSESSEE FOR THE ASSESSMENT YEAR 2000-01 TO 200 3-04 AS WELL AS THE CROSS APPEAL OF THE REVENUE FOR THE ASSESSMENT YEAR 2003-04 WERE DISPOSED. 2. THE ONLY GRIEVANCES IN THESE MISCELLANEOUS APPLI CATIONS HAS BEEN RAISED BY THE ASSESSEE IS THAT THE ISSUE OF DISALLO WANCE U/S 40(A)(I) IN RESPECT OF THE PAYMENTS MAILED TO KMPG INTERNATIONA L HAS BEEN REMITTED MA NOS. 8 TO 11/MUM/2013 . 2 BACK TO THE FILE OF THE ASSESSING OFFICER FOR DE-NO VO ADJUDICATING INSTEAD OF TO THE RECORD OF THE CIT(A) AS IT WAS REMITTED BY T HIS TRIBUNAL IN ITA NO. 1959 & 1823/M/2007 FOR THE ASSESSMENT YEAR 2001-02 AS WELL AS ASSESSMENT YEAR 1999-2000. 3. WE HAVE HEARD THE LD. AR AS WELL AS LD. DR AND C AREFULLY PERUSE THE IMPUGNED ORDER OF THIS TRIBUNAL. THE TRIBUNAL WHILE DECIDING THE SOLE EFFECTIVE GROUND RAISED IN THESE APPEALS REGARDING DISALLOWANCE U/S 14(A)(I) OF INCOME TAX ACT HAS REMITTED THE ISSUE T O THE RECORD OF THE ASSESSING OFFICER BY FOLLOWING THE DECISION OF THIS TRIBUNAL IN THE ASSESSEES OWN CASE FOR THE ASSESSMENT YEAR 1999-20 00 AND 2000-01 IN PARAGRAPH 5-11 AS UNDER: 5. BEFORE US, BOTH THE LEARNED REPRESENTATIVES SUB MITTED THAT SIMILAR ISSUE HAS COME UP BEFORE THE MUMBAI L BEN CH OF THE TRIBUNAL IN ASSESSEES OWN CASE FOR ASSESSMENT YEA RS 20001-02, AS WELL AS 1999-2000, 2001-02, AND THAT THE APPEALS SHOULD BE RESTORED TO THE FILE OF COMMISSIONER (APPEALS) TO A DJUDICATE THE ISSUE OF CHARGEABILITY OF INCOME OF PAYMENTS MADE T O KMPG INTERNATIONAL. THE TRIBUNAL IN ITA NO.1959 AND 1823 /MUM./ 2007, AT PARAS-9 AND 10 / PAGE-7, HELD AS FOLLOWS:- 9. THE HAS RAISED LEGAL ARGUMENT THAT THE PAYMENT MADE TO M/S KPMG INTERNATIONAL IS NOT CHARGEABLE UNDER T HE PROVISIONS OF THE ACT, FOR THE REASON THAT M/S KPMG INTERNATIONAL IS A MUTUAL ORGANIZATION AND THE ASSE SSEE IS A MEMBER OF SUCH MUTUAL ORGANIZATION. THIS ARGUMENT H AS NOT BEEN ADJUDICATED UPON BY THE FIRST APPELLATE AU THORITY FOR THE REASONS GIVEN AT PARA 5.5 AT PAGE 15 OF HIS ORDER, WHICH IS ALREADY EXTRACTED BY US HEREIN ABOVE. IN O UR CONSIDERED VIEW THE FIRST APPELLATE AUTHORITY WAS I N ERROR IN NOT ADJUDICATING THE ISSUE. THE ASSESSEE HAS A RIGH T TO ARGUE THAT, THE AMOUNT PAID BY IT TO M/S KPMG INTERNATIONAL DOES NOT GIVE RISE TO ANY INCOME CHAR GEABLE TO TAX IN INDIA AND THUS THE AGES DEDUCT ANY TAX AT SOURCE. THE ISSUE WHETHER THE ASSESSEE CAN TAKE SUCH AN ARGUMENT HAS ATTAINED FINALITY BY THE DECISION OF T HE MA NOS. 8 TO 11/MUM/2013 . 3 HONBLE SUPREME OF INDIA IN THE CASE OF G.E. INDIA TECHNOLOGY CENTRE PVT. LTD. V/S CIT AND OTHERS, CIV IL APPEAL NO.7541-7542 OF 2010 JUDGMENT DATED 9TH SEPTEMBER 2010. IN VIEW OF THE ABOVE, WE ARE OF THE OPINION, THAT THE FIRST APPELLATE AUTHORITY SHOULD HAVE ADJUDICATED O N THE GROUND WHETHER THE PAYMENT MADE BY THE ASSESSEE IS CHARGEABLE TO TAX UNDER THE ACT. THE APPREHENSION O F THE LEARNED DR, THAT THE DECISION ON THIS MATTER WOULD HAVE RAMIFICATION IN THE OTHER CASES AND ALSO THE ARGUME NT THAT, THE ISSUE WHETHER M/S. KPMG INTERNATIONAL IS A MUTU AL CONCERN OR NOT, CANNOT BE DECIDED IN THIS CASE, IS DEVOID OF MERIT. THE ASSESSEE IS A MEMBER OF KPMG INTERNATION AL AND IT IS FOR THE ASSESSEE TO SATISFY THE ADJUDICAT OR, WITH ALL POSSIBLE EVIDENCES, THAT M/S. KPMG INTERNATIONAL IS A MUTUAL CONCERN. WHEN THE ASSESSEE IS MAKING A CLAIM IT IS FOR THE ASSESSEE TO PROVE ITS CASE. THUS, WE REJECT THIS ARGUMENT OF THE LEARNED DR. 10. IN VIEW OF THE ABOVE DISCUSSION, WE SET ASIDE B OTH THE APPEALS TO THE FILE OF CIT(APPEALS) WITH A DIRECTION TO ADJ UDICATE THE ISSUE RAISED BY THE ASSESSEE ON THE CHARGEABILITY TO INCO ME TAX OF PAYMENTS MADE TO M/S. KPMG INTERNATIONAL. 6. THE AFORESAID FINDINGS OF THE TRIBUNAL WAS SUBSE QUENTLY FOLLOWED BY A CO-ORDINATE BENCH OF THE TRIBUNAL IN ITA NO.4605/MUM./2005, AND OTHER APPEALS, ORDER DATED 3 1ST JANUARY 2011. 7. CONSISTENT WITH THE VIEW TAKEN THEREIN, WE SET A SIDE THE IMPUGNED ORDERS PASSED BY THE COMMISSIONER (APPEALS ) AND RESTORE THE ISSUE TO THE FILE OF THE ASSESSING OFFI CER FOR DENOVO ADJUDICATION IN ACCORDANCE WITH LAW. THUS, THE GROU ND RAISED IN THESE APPEALS IS ALLOWED FOR STATISTICAL PURPOSES. 8. IN THE RESULT, BOTH THE APPEALS ARE ALLOWED FOR STATISTICAL PURPOSES. 9. WE NOW PROCEED TO DISPOSE OFF THE CROSS APPEALS IN ITA NO.3303/MUM./2008 (PREFERRED BY THE REVENUE), AND I TA NO.4266/MUM./2008 (PREFERRED BY THE ASSESSEE), FOR ASSESSMENT YEAR 2003-04, WHICH ARE DIRECTED AGAINST THE IMPUGN ED ORDER DATED 14TH MARCH 2008, PASSED BY THE COMMISSIONER ( APPEALS)-XI, MUMBAI. 10. BEFORE US, BOTH THE LEARNED REPRESENTATIVES SUB MITTED BEFORE US THAT THE TRIBUNAL SHOULD TAKE A CONSISTENT VIEW AND RESTORE THE ISSUE BACK TO THE FILE OF COMMISSIONER (APPEALS) FO R DENOVO ADJUDICATION IN LINE WITH THE DECISION RENDERED BY THE TRIBUNAL IN ASSESSEES OWN CASE FOR ASSESSMENT YEAR 2000-01 AND 2002-03, AS THE SAME ISSUE ARISES IN THESE CROSS APPEALS ALS O. MA NOS. 8 TO 11/MUM/2013 . 4 11. AFTER HEARING BOTH THE LEARNED REPRESENTATIVES, WE SET ASIDE THE IMPUGNED ORDER PASSED BY THE COMMISSIONER (APPE ALS) AND RESTORE THE ISSUE TO THE FILE OF ASSESSING OFFICER FOR DENOVO ADJUDICATION IN ACCORDANCE WITH LAW. THUS, THE GROU ND RAISED IN THESE CROSS APPEALS IS ALLOWED FOR STATISTICAL PURP OSES. 4. IT IS PERTINENT TO NOTE THAT FOR THE ASSESSMENT YEAR 1999-2000 AND 2000-01, THE ISSUE WAS SET ASIDE TO THE RECORD OF T HE CIT(A) WITH THE DIRECTION TO ADJUDICATE THE SAME. SINCE, THE ISSUE OF DISALLOWANCE U/S 40(A)(I) WAS SET ASIDE TO THE RECORD OF THE CIT(A) FOR THE ASSESSMENT YEAR 1999-2000 AND 2001-02 AND THEREFORE, TO MAINTAIN TH E RULE OF CONSISTENCY, THE IDENTICAL ISSUE FOR THE ASSESSMENT YEAR UNDER CONSIDERATION OUGHT TO HAVE BEEN SET ASIDE TO THE R ECORD OF THE CIT(A) AND NOT TO THE RECORD OF THE ASSESSING OFFICER. EVEN OT HERWISE, TO AVOID ANY CONFLICTING FINDINGS BY THE DIFFERENT AUTHORITIES, THE ISSUE IS OTHERWISE REQUIRED TO BE SET ASIDE TO ONE AUTHORITY I.E. CIT( A). 5. IN VIEW OF THESE FACTS AND CIRCUMSTANCES, WE FIN D THAT AN APPARENT MISTAKE HAS CREPT ON RECORD WHICH REQUIRES TO BE RE CTIFIED. ACCORDINGLY, WE MODIFIED THE IMPUGNED ORDER DATED 25.1.2012 AND THE ISSUE OF DISALLOWANCE U/S 40(A)(I) IS ACCORDINGLY SET ASIDE TO THE RECORD OF THE CIT(A) INSTEAD OF ASSESSING OFFICER. THE PARAGRAPH 11 OF THE IMPUGNED ORDER MAY BE READ AS UNDER: 11. AFTER HEARING BOTH THE LEARNED REPRESENTATIVES , WE SET ASIDE THE IMPUGNED ORDER PASSED BY THE COMMISSIONER (APPE ALS) AND RESTORE THE ISSUE TO THE FILE OF CIT(A) FOR DE-NOVO ADJUDICATION IN MA NOS. 8 TO 11/MUM/2013 . 5 ACCORDANCE WITH LAW. THUS, THE GROUND RAISED IN THE SE CROSS APPEALS IS ALLOWED FOR STATISTICAL PURPOSES. 6. IN THE RESULT, MISCELLANEOUS APPLICATIONS FILED BY THE ASSESSEE ARE ALLOWED. U RV I# UR Q '' '' '' '' # # # # !R W Q R XY ORDER PRONOUNCED IN THE OPEN COURT ON THIS DAY OF 12 TH JUNE 2013 T Q SJ Z [ #V 12 TH # 2013 Q \ SD/- SD/- ( ! ! ! ! ) ( SANJAY ARORA) ACCOUNTANT MEMBER ' ' ' ' ( I I I I ! ! ! ! ) (VIJAY PAL RAO ) JUDICIAL MEMBER PLACE: MUMBAI : DATED: 12 TH JUNE 2013 SUBODH COPY FORWARDED TO: 1 APPELLANT 2 RESPONDENT 3 CIT 4 CIT(A) 5 DR /TRUE COPY/ BY ORDER