Shri Shakambari Weavers Co-operative Society Ltd , Bagalkot V. Income Tax Officer Ward-1, Bagalkot

SA 42/BANG/2019

• Counselvise Citation: [2019] 117 COUNSELVISE.COM (IT) 6226 (ITAT-BANGALORE)
• Duration Of Justice: 2 month(s) 23 day(s)
• Appeal Type: Income Tax (Transfer Pricing) Appeal
• Pronouncement Date: 01-05-2019
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2009-2010
• Appeal Filed On: 08-02-2019
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: PERCY PARDHIWALLA
• Assessee Lawyers: DHANDAPANI JCIT DR BENGALURU
• Keywords: Business income; Double taxation relief; Permanent establishment; Reassessment proceedings; Set aside
• Section: 195; 15

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH : BANGALORE BEFORE SHRI N.V. VASUDEVAN, VICE PRESIDENT AND SHRI B.R BASKARAN, ACCOUNTANT MEMBER MP NO.259/BANG/2018 [IN IT(IT)A NO.2845/BANG/2017] ASSESSMENT YEAR : 2007-08 THE DY. COMMISSIONER OF INCOME-TAX INTERNATIONAL TAXATION, CIRCLE-1(1), BENGALURU VS. M/S GOOGLE IRELAND LTD., GORDON HOUSE, BARROW STREET, IRELAND C/O SRBC & ASSOCIATE 18, OVAL OFFICE, ILABS CENTER HITECH CITY, MADHAPUR, HYDERABAD-500 081. APPELLANT RESPONDENT APPLICANT BY : SHRI DHANDAPANI, JCIT (DR, BENGALURU) RESPONDENT BY : SHRI PERCY PARDHIWALLA, SR. ADVOCATE DATE OF HEARING : 15.02.2019 DATE OF PRONOUNCEMENT : 20.02.2019 O R D E R PER N.V. VASUDEVAN, VICE PRESIDENT THIS IS A PETITION FILED BY THE REVENUE U/S.254(2) OF THE INCOME TAX ACT, 1961 (ACT) ALLEGING THAT THERE ARE CERTAIN APP ARENT ERRORS IN THE ORDER OF THE TRIBUNAL WHICH SHOULD BE RECTIFIED. 2. IN THE ABOVE APPEAL THE QUESTION THAT AROSE FOR CONSIDERATION WAS AS TO WHETHER THE SUM OF RS.93,66,27,879 RECEIVED B Y THE ASSESSEE FROM GOOGLE INDIA PRIVATE LIMITED (GIPL) AND RS.51,08,74 ,532 RECEIVED FROM PAGE 2 OF 9 M. P NO.259/B/2018 OTHER ADVERTISERS TOWARDS SALE OF ONLINE AD SPACE IN INIDA UNDER ADWORD PROGRAM IS CHARGEABLE TO TAX AS 'ROYALTY' UNDER THE ACT AND THE DOUBLE TAXATION AVOIDANCE AGREEMENT (DTAA). IN GR.NO.15 & 16 THE ASSESSEE HAD ALSO CHALLENGED THE ACTION OF THE REVENUE AUTHO RITIES IN BRINGING TO TAX A SUM OF RS.51,08,74,532 FROM OTHER ADVERTISERS/DIR ECT ADVERTISERS TOWARDS SALE OF ONLINE ADVERTISEMENT SPACE UNDER AD WORDS PROGRAM WAS IN THE NATURE OF ROYALTY. THE ASSESSEE HAD ALSO CH ALLENGED VALIDITY OF INITIATION OF REASSESSMENT PROCEEDINGS U/S.147 OF T HE ACT. 3. THE ABOVE APPEAL BEING ITA NO.2845/BANG/2017 BEI NG APPEAL BY GIL FOR AY 2007-08 WAS HEARD ALONG WITH OTHER APPEA LS FILED BY GIPL FOR AY 2008-09 TO 2015-16. IN THE ASSESSMENT OF GIPL T HE PAYMENTS MADE TOWARDS SALE OF ONLINE ADVERTISEMENT SPACE UNDER AD WORDS PROGRAM WAS HELD TO BE IN THE NATURE OF ROYALTY CHARGEABLE TO T AX IN INDIA AS ROYALTY AND SINCE GIPL DID NOT DEDUCT TAX AT SOURCE ON SUCH PAYMENT, THE SUMS SO PAID WERE DISALLOWED U/S.40(A)(IA) OF THE ACT AN D ADDED TO THE TOTAL INCOME OF THE ASSESSEE. 4. BY A COMMON ORDER DATED 11.5.2018, THE APPEALS O F THE ASSESSEE ON THE ABOVE POINTS WAS DISMISSED BY THE TRIBUNAL. 5. IN THIS PETITION, THE REVENUE HAS CONTENDED THAT THE TRIBUNAL ACCEPTED THE STAND OF THE REVENUE THAT PAYMENT BY G IPL TO GIL CONSTITUTED ROYALTY CHARGEABLE TO TAX IN INDIA IN PARAGRAPH-190 OF ITS ORDER WHICH READS AS FOLLOWS: 190 . SO FAR AS ASSESSMENT ON MERIT IS CONCERNED, WE FI ND THAT REVENUE HAS ASSESSED THE APPELLANT ON BUSINESS PROF IT RECEIVED BY IT AFTER TREATING THE GIPL AS ITS PERMANENT ESTABLISHM ENT IN INDIA. THE ISSUE OF CHARACTERIZATION OF THE PAYMENT MADE BY TH E GIPL TO GIL HAS ALREADY BEEN ADJUDICATED BY US IN THE APPEALS FILED BY GIPL AND WE HAVE TAKEN A VIEW THAT THE PAYMENTS MADE BY GIPL TO GIL UNDER THE GOOGLE ADWORD DISTRIBUTION AGREEMENT IS PAYMENT OF ROYALTY, THEREFORE THE RECEIPTS IN THE HANDS OF GIL CANNOT B E TREATED TO BE BUSINESS PROFIT IN THE HANDS OF THE GIL. THE GIL AN D GIPL WERE PAGE 3 OF 9 M. P NO.259/B/2018 DEALING ON PRINCIPAL TO PRINCIPAL BASIS. THEREFORE, GIPL CANNOT BE CALLED TO BE THE PERMANENT ESTABLISHMENT OF THE GIL . IN THE LIGHT OF THESE FACTS, WE ARE OF THE VIEW THAT REVENUE HAS WR ONGLY ASSESSED THE GIL FOR BUSINESS PROFIT RECEIVED BY IT UNDER ADWORD DISTRIBUTION AGREEMENT. MOREOVER, DURING THE COURSE OF HEARING, THE LEARNED STANDING COUNSEL HAS CANDIDLY ADMITTED THAT NOW THE REVENUE'S STAND IS VERY CLEAR THAT THE PAYMENT MADE BY THE GIPL TO GIL IS IN THE NATURE OF ROYALTY AND NOT THE BUSINESS PROFIT RECEI VED BY THE GIL. THEREFORE, WE ARE OF THE CONSIDERED OPINION THAT AS SESSMENT OF BUSINESS PROFIT IN THE HANDS OF GIL AFTER TREATING THE GIPL AS PERMANENT ESTABLISHMENT OF THE GIL IS NOT PROPER. E VEN IF THE ROYALTY IS TO BE PAID BY THE GIPL TO GIL THE TAX IS TO DEDU CTED ON ITS PAYMENT AND BENEFIT OF THE SAME WILL BE GIVEN TO GIL WHILE COMPLETING THE ASSESSMENT IN ITS HANDS. THEREFORE, WE SET ASIDE TH E ORDER OF CIT(A) AND RESTORE THE MATTER TO THE AO WITH A DIRECTION T O REFRAME THE ASSESSMENT IN THE LIGHT OF THE OBSERVATIONS OF THE TRIBUNAL IN THE FOREGOING PARAS AND ALSO IN ACCORDANCE WITH LAW. AC CORDINGLY, THIS APPEAL IS PARTLY ALLOWED FOR STATISTICAL PURPOSES. 6. IT IS THE PLEA OF THE REVENUE IN THIS PETITION T HAT THE ASSESSMENT WAS NEVER MADE BY THE REVENUE BY TREATING THE RECEIPTS FROM SALE OF ONLINE ADVERTISEMENT SPACE UNDER ADWORDS PROGRAM AS BUSINE SS PROFITS BY TREATING GIPL AS PERMANENT ESTABLISHMENT (PE) OF GI L IN INDIA BUT WAS AN ASSESSMENT MADE ON THE BASIS THAT THE RECEIPTS WERE IN THE NATURE OF ROYALTY AND THEREFORE THE MISTAKE IN THE ORDER OF T HE TRIBUNAL IN PARAGRAPH- 190 ON THE ASSUMPTION THAT THE REVENUE ASSESSED THE RECEIPTS IN THE HANDS OF GIL AS BUSINESS PROFITS SHOULD BE RECTIFIE D SUITABLY. 7. THE LEARNED DR REITERATED THE STAND OF THE REVEN UE AS CONTAINED IN THE M.P. THE LEARNED COUNSEL FOR THE ASSESSEE BROU GHT TO OUR NOTICE THAT IN THE APPEAL BY GIPL THE STAND TAKEN BY GIPL WAS T HAT THE PAYMENTS MADE BY IT TO GIL WERE IN THE NATURE OF BUSINESS PR OFITS AND NOT ROYALTY. SINCE GIL DID NOT HAVE A PE IN INDIA, THE SAME IS N OT TAXABLE IN INDIA. GIPL IN SUPPORT OF SUCH CONTENTION HAS RELIED ON DE CISIONS OF VARIOUS BENCHES OF TRIBUNAL IN THE CASE OF ITO VS. RIGHT FL ORIST PVT.LTD. (2013) 25 ITR (TRI.)639 (KOL), PINSTROM TECHNOLOGY LTD. VS. I TO (2012)54 SOT 78 (MUM.-TRIB) AND YAHOO INDIA PVT.LTD. VS. CIT 140 TT J 195 (MUM.-TRIB) . THE PAGE 4 OF 9 M. P NO.259/B/2018 TRIBUNAL HOWEVER REJECTED THE CLAIM OF GIPL BY OBSE RVING THAT THE FACTS OF GIPLS CASE AND THAT OF THE DECISIONS RELIED BY GIP L WERE DIFFERENT IN PARAGRAPHS-116 & 117 OF ITS ORDER WHICH READS THUS: 116 . IN ALL THESE CASES, THE ASSESSEE WAS EITHER AN ADVE RTISER OR ACT ON BEHALF OF SOME OTHER ADVERTISER AND HAS PURC HASED SPACE FROM THE OWNER OF SEARCH ENGINE TO DISPLAY ITS ADVE RTISEMENTS ONLINE. THEREFORE, THE PAYMENT MADE BY THE ASSESSEE TO THE OWNER OF THE SEARCH ENGINE WAS CONSIDERED TO BE BUS INESS RECEIPT / BUSINESS PROFIT IN THE HANDS OF THE OWNER OF SEARCH ENGINE WHO IS NON-RESIDENT AND IN THE ABSENCE OF PE RMANENT ESTABLISHMENT (PE) IN INDIA, THE BUSINESS PROFITS / BUSINESS RECEIPTS RECEIVED BY THEM WERE NOT CHARGEABLE TO TA X IN INDIA. BUT IN THE INSTANT CASE, APPELLANT HAS NOT PURCHASE D THE ADVERTISEMENT SPACE FOR PUTTING ITS ADVERTISEMENT O NLINE FROM THE GIL. THE ASSESSEE HAS BEEN DULY APPOINTED A DIS TRIBUTOR UNDER THE GOOGLE ADWORD DISTRIBUTION AGREEMENT TO D ISTRIBUTE AND SELL THE ADVERTISEMENT SPACE OBTAINED FROM THE GIL UNDER THE DISTRIBUTION AGREEMENT. UNDER THE DISTRIBUTION AGREEMENT, APPELLANT WAS UNDER OBLIGATION TO PROVIDE PRE-SALE AND AFTER SALE SERVICES WITH THE HELP OF ITES DIVISION. WHILE PROV IDING AFTER SALES SERVICES / TECHNICAL SERVICES, THE ASSESSEE H AD ACCESS TO THE INTELLECTUAL PROPERTY RIGHTS AND TOOLS AND INFORMAT IVES, DERIVATIVE WORKS OWNED BY THE GIL. IN THE INSTANT C ASE, ASSESSEE IS NOT A SIMPLICITER BUYER OF ADWORD SPACE FOR PUTT ING THE ADVERTISEMENT EITHER FOR HIMSELF OR FOR OTHERS WHIC H WAS THE POSITION IN THE AFORESAID CASES REFERRED TO BY THE ASSESSEE. THEREFORE, WE ARE OF THE VIEW THAT THE FACTS OF THE CASE REFERRED TO BY THE ASSESSEE I.E., PINSTORM TECHNOLOGIES LTD. , RIGHT FLORIST AND YAHOO INDIA LTD., ARE DIFFERENT THAN THE FACTS OF THE INSTANT CASE. THUS THE RATIO LAID DOWN IN THOSE CASES WOULD NOT BE APPLICABLE TO THE PRESENT FACTS OF THE CASE. 117 . THE LEARNED COUNSEL FOR THE ASSESSEE HAS ALSO EMP HATICALLY ARGUED THAT THE ISSUE INVOLVED IN THESE APPEALS IS SQUARELY COVERED BY THE AFORESAID JUDGMENTS IN THE CASE OF R IGHT FLORIST, PINSTORM TECHNOLOGIES LTD., YAHOO INDIA LTD., THERE FORE, ISSUE MAY BE DECIDED FOLLOWING THE RATIO LAID DOWN IN THE AFORESAID CASES. IF THE TRIBUNAL TAKES A VIEW CONTRARY TO THE VIEW TAKEN IN THE AFORESAID CASES, THE MATTER MAY BE REFERRED TO LARGER BENCH. IN PAGE 5 OF 9 M. P NO.259/B/2018 THIS REGARD, WE HAVE CAREFULLY PERUSED THE FACTS OF THE AFORESAID CASES AND WE FIND THE FACTS OF THOSE CASES ARE DIFF ERENT AND THEREFORE THE RATIO LAID DOWN THEREIN CANNOT BE FOL LOWED IN THE INSTANT CASE. HENCE WE DO NOT FIND ANY MERIT IN THE CONTENTION OF THE ASSESSEE FOR MAKING A REFERENCE TO LARGER BENCH IF CONTRARY VIEW IS REQUIRED TO BE TAKEN. WE THEREFORE REJECT T HESE CONTENTIONS OF THE ASSESSEE. 8. HE ALSO DREW OUR ATTENTION TO THE FACT THAT IN T HE ASSESSMENT OF GIL THERE WERE TWO PAYMENTS, ONE RECEIVED THROUGH GIPL AND OTHER THROUGH OTHER ADVERTISERS DIRECTLY. HE DREW OUR ATTENTION TO GR.NO.15 & 16 OF THE GROUNDS OF APPEAL IN THE APPEAL FILED BY GIL, WHICH READS THUS:- 15. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE A ND IN LAW, THE LD. AO/ HON'BLE DRP ERRED IN HOLDING THAT THE INCOME FROM OTHER ADVERTISERS AMOUNTING TO INR 510,874,532 IN INDIA TOWARDS SALE OF ONLINE AD SPACE IS CHARGEABLE TO TAX AS 'ROYALTY' UNDER THE ACT AND TH E DTAA AND WITHOUT FOLLOWING THE DECISIONS BY THE HON'BLE KOLKATA TRIBUNAL IN THE CASE OF ITO VS. RIG HT FLORISTS (P.) LTD. (154 TTJ 142) AND HON'BLE MUMBAI TRIBUNAL IN THE CASE OF PINSTO RM TECHNOLOGIES VS ITO (54 SOT 78) SQUARELY APPLICABLE TO THE FACTS OF THE PRESENT CASE. 16. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE A ND IN LAW, THE LD. AO HAS ERRED IN HOLDING THAT THE PAYME NT RECEIVED FROM DIRECT ADVERTISERS PERTAINS TO THE USE OR RIGHT TO USE OF COPYRIGHT IN THE COMPUTER PROGRAMME AND THEREFORE, TAXABLE AS ROYALTY IN INDIA. 9. HIS SUBMISSION WAS THAT THE DECISION OF THE TRIB UNAL IS THAT GIPL IS A DISTRIBUTOR OF ADVERTISEMENT SPACE OF ADWORD PROG RAM FOR GIL AND WAS BOUND TO PROVIDE PRE SALE AND AFTER SALE SERVICES W ITH THE HELP OF ITES DIVISION AND IN DOING SO IT HAD ACCESS TO INTELLECT UAL PROPERTY RIGHTS AND TOOLS AND INFORMATIVES, DERIVATIVE WORKS OWNED BY G IL. THE TRIBUNAL HAS PAGE 6 OF 9 M. P NO.259/B/2018 RULED THAT GIPL IS NOT A SIMPLICITER BUYER OF ADWOR D SPACE FOR THE ADVERTISEMENT EITHER FOR ITSELF OR FOR OTHERS WHICH WAS THE POSITION IN THE CASES CITED BY GIPL. ACCORDING TO HIM THEREFORE IT IS IMPLICIT FROM A READING OF THE DECISION OF THE TRIBUNAL IN PARAGRAP HS 116 & 117 OF ITS ORDER THAT THE PAYMENTS RECEIVED DIRECTLY FROM OTHER ADVE RTISERS WERE IN THE NATURE OF BUSINESS RECEIPTS AND CHARGEABLE TO TAX O NLY IF GIL HAD A PE IN INDIA. ACCORDING TO HIM IT IS IN THE LIGHT OF THE A BOVE CONCLUSIONS IN PARAGRAPH-116 & 117 OF ITS ORDER THAT THE TRIBUNAL HAS GIVEN THE DIRECTIONS IN PARAGRAPH 190 OF ITS ORDER REMANDING THE ISSUE T O THE AO FOR REFRAMING THE ASSESSMENT. HIS SUBMISSION WAS THAT, IN THE LI GHT OF THE CIRCUMSTANCES POINTED OUT BY HIM AS ABOVE, THE DIRE CTIONS IN PARAGRAPH 190 OF THE TRIBUNALS ORDER IS A CONSCIOUS DECISION TO REMAND THE ISSUE AND REFRAME THE ASSESSMENT OF GIL AFRESH IN THE LIG HT OF ITS OBSERVATIONS IN PARAGRAPH 116 & 117 OF ITS ORDER HOLDING THAT PAYME NTS RECEIVED DIRECTLY FROM ADVERTISERS WERE IN THE NATURE OF BUSINESS PRO FITS. HE THEREFORE SUBMITTED THAT THERE IS NO ERROR MUCH LESS AN ERROR APPARENT ON THE FACE OF THE RECORD, CALLING FOR INTERFERENCE U/S.254(2) OF THE ACT. 10. WE HAVE CAREFULLY CONSIDERED THE RIVAL SUBMISSI ONS. THE SCOPE OF PROCEEDINGS U/S.254(2) OF THE ACT ARE VERY LIMITED. THE POWER OF THE TRIBUNAL UNDER S. 254(2) IS CONFINED TO RECTIFYING ANY MISTAKE APPARENT FROM THE RECORD. THE TRIBUNAL DOES NOT HAVE INHEREN T POWER OF RECTIFICATION OR REVIEW OR REVISION. UNLESS THERE IS MISTAKE APPA RENT FROM THE RECORD IN THE SENSE OF PATENT, OBVIOUS, CLEAR ERROR OR MISTAK E, THE TRIBUNAL CANNOT RECALL ITS PREVIOUS ORDER. IF THE ERROR OR MISTAKE IS ONE WHICH COULD BE ESTABLISHED ONLY BY LONG-DRAWN ARGUMENTS OR BY WAY OF PROCESS OF INVESTIGATION AND RESEARCH, IT IS NOT A MISTAKE APP ARENT FROM THE RECORD. 11. THE TRIBUNAL PASSED A COMMON ORDER IN 15 APPEAL S. 14 OF THE AFORESAID APPEALS RELATE TO GIPL. OUT OF THE 14 AP PEALS RELATING TO GIPL, 8 APPEALS WERE BY GIPL RELATING TO AY 2008-09 TO 20 15-16, 5 APPEALS PAGE 7 OF 9 M. P NO.259/B/2018 WERE BY THE REVENUE BEING CROSS APPEALS RELATING TO AY 2008-09 TO 2011- 12 & 2013-14 AND ONE APPEAL WAS BY THE REVENUE FOR AY 2010-11 BEING APPEAL ARISING OUT OF PROCEEDINGS U/S.154 OF THE AC T. GILS ONLY APPEAL FOR AY 2008-09 WAS HEARD ALONG WITH THE OTHER 14 APPEAL S RELATING TO GIPL. GIL RECEIVED PAYMENTS ON SALE OF ONLINE ADVERTISEME NT SPACE UNDER ADWORDS PROGRAM FROM TWO SOURCES VIZ., (1) FROM GIP L AND (2) DIRECT ADVERTISERS. IN THE APPEALS OF GIPL, THE NATURE OF PAYMENT RECEIVED BY GIL FROM OTHER ADVERTISERS/DIRECT ADVERTISERS TOWAR DS SALE OF ONLINE ADVERTISEMENT SPACE UNDER ADWORDS PROGRAM WAS NOT I N ISSUE AT ALL. IN THE PROCEEDINGS IN THE CASE OF GIPL THE DISPUTE WAS ONLY WITH REGARD TO NON- DEDUCTION OF TAX AT SOURCE ON PAYMENTS BY GIPL TO GIL TOWARDS SALE OF ONLINE ADVERTISEMENT SPACE UNDER THE ADWORDS PRO GRAM BY GIPL AND CONSEQUENT DISALLOWANCE TO BE MADE U/S.40(A)(IA) OF THE ACT. WHILE DECIDING THE APPEAL OF GIL, THE TRIBUNAL HAS FOLLOW ED ITS DECISION RENDERED IN THE CASE OF GIPL THAT PAYMENTS MADE BY GIPL TO G IL TOWARDS SALE OF ONLINE ADVERTISEMENT SPACE UNDER ADWORDS PROGRAM WA S IN THE NATURE OF ROYALTY CHARGEABLE TO TAX IN INDIA AS ROYALTY AND SINCE GIPL DID NOT DEDUCT TAX AT SOURCE ON SUCH PAYMENT, THE SUMS SO P AID WERE DISALLOWED U/S.40(A)(IA) OF THE ACT AND ADDED TO THE TOTAL INC OME OF THE ASSESSEE. THIS CONCLUSION WAS REITERATED WHILE DECIDING THE A PPEAL OF GIL. AS FAR AS RECEIPTS BY GIL DIRECTLY FROM ADVERTISERS UNDER THE ADWORDS PROGRAM IS CONCERNED THE TRIBUNAL HAS NOT GIVEN ANY SPECIFIC C ONCLUSION. EVEN THE AO AND THE CIT(A) HAVE PROCEEDED ON THE BASIS THAT THE CONCLUSIONS IN RESPECT OF PAYMENTS BY GIPL TO GIL WILL EQUALLY APP LY TO DIRECT ADVERTISERS ALSO. 12. WE MUST HOWEVER MAKE IT CLEAR THAT IT WAS NEVE R THE CASE OF THE AO OR THE DRP/CIT(A) THAT RECEIPTS FROM SALE OF ADVERT ISEMENTS UNDER THE ADWORD PROGRAM WAS BUSINESS PROFITS OF GIL AND THAT IT WAS TAXABLE IN THE HANDS OF GIL BECAUSE GIPL CONSTITUTED PE OF GIL IN INDIA. THE CASE OF PAGE 8 OF 9 M. P NO.259/B/2018 THE REVENUE HAS ALWAYS BEEN THAT THE SAID RECEIPTS WERE IN THE NATURE OF ROYALTY. IT WAS THE CASE OF GIL THAT THE RECEIPTS WERE NOT IN THE NATURE OF ROYALTY AND WERE IN THE NATURE OF BUSINESS PROFITS OF GIL AND SINCE GIL DID NOT HAVE A PE IN INDIA, THE SAID RECEIPTS ARE NOT C HARGEABLE TO TAX IN INDIA. TO THIS EXTENT IT CAN BE SAID THAT THERE APPEARS TO BE A MISTAKE IN THE ORDER OF THE TRIBUNAL IN PARAGRAPH 190 OF THE ORDER. 13. IT IS THE PLEA OF THE ASSESSEE THAT GOING BY T HE OBSERVATIONS IN PARAGRAPH 116 OF ITS ORDER WHICH IS TO THE EFFECT T HAT GIPL ACTED AS DISTRIBUTOR OF ADVERTISEMENT SPACE WHEREAS THE FACT S IN THE CASES CITED ON BEHALF OF ASSESSEES WERE ALL CASES WHERE THE ADVER TISEMENTS WERE DIRECTLY PLACED BY ADVERTISERS OR PERSONS WHO PURCH ASED SPACE FROM OWNER OF SEARCH ENGINE PROVIDING ONLINE ADVERTISEME NT SPACE, IT APPEARS THAT THE TRIBUNAL HAS ACCEPTED THAT IF ADVERTISEMEN TS WERE DIRECTLY PLACED BY ADVERTISERS OR PERSONS WHO PURCHASE SPACE FROM O WNER OF SEARCH ENGINE PROVIDING ONLINE ADVERTISEMENT SPACE, RECEIP TS FROM PROVIDING SUCH ADVERTISEMENT SPACE WOULD BE IN THE NATURE OF BUSIN ESS PROFITS. SINCE GIL DID NOT HAVE PE IN INDIA NOR WAS GIPL REGARDED AS C ONSTITUTING PE OF GIL IN INDIA, THE SAID RECEIPTS FROM DIRECT ADVERTISEME NT CANNOT BE BROUGHT TO TAX IN INDIA. IT IS FOR THIS REASON THAT THE TRIBU NAL HAS REMANDED THE CASE TO THE AO FOR FRESH ASSESSMENT IN PARAGRAPH 190 OF ITS ORDER. THIS IS THE INTERPRETATION OF THE TRIBUNALS ORDER BY THE ASSES SEE. 14. THE APPEALS WERE NOT HEARD BY EITHER OF US. WE ARE THEREFORE UNABLE TO FATHOM AS TO WHY THE TRIBUNAL REMANDED TH E CASE TO THE AO TO REFRAME ASSESSMENT IN THE LIGHT OF THE DIRECTIONS C ONTAINED IN THE ORDER. WE ARE OF THE VIEW THAT IN THE GIVEN FACTS AND CIRC UMSTANCES OF THE CASE, THE ISSUE SOUGHT TO BE AGITATED IN THIS MP BEFORE T HE TRIBUNAL IS HIGHLY DEBATABLE AND TWO VIEWS ARE POSSIBLE ON THE ISSUE. IN SUCH CIRCUMSTANCES, WE ARE OF THE VIEW THAT IT WOULD NOT BE APPROPRIATE TO EXERCISE POWERS U/S.254(2) OF THE ACT AS THE ORDER DOES NOT SUFFER FROM PAGE 9 OF 9 M. P NO.259/B/2018 ANY MISTAKE APPARENT ON THE FACE OF THE RECORD. WE MAKE IT CLEAR THAT NONE OF THE OBSERVATIONS IN THIS ORDER SHOULD INFLU ENCE THE MIND OF THE PARTIES IN THEIR INTERPRETATION OF THE ORDER. 15. IN THE RESULT, THE MISCELLANEOUS PETITION IS DI SMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 20 TH FEBRUARY, 2019. SD/- (B.R BASKARAN) SD/- ( N.V. VASUDEVAN) ACCOUNTANT MEMBER VICE PRESIDENT BANGALORE, DATED, THE 20 TH FEBRUARY, 2019. / VMS / COPY TO: 1. THE APPLICANT 2. THE RESPONDENT 3. THE CIT 4. THE CIT(A) 5. THE DR, ITAT, BANGALORE. 6. GUARD FILE BY ORDER ASST. REGISTR AR, ITAT, BANGALORE