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TMI Blog2013 (11) TMI 1368X X X X Extracts X X X X X X X X Extracts X X X X ..... e, it is only consultancy charges - The substance of the impugned agreement is only consultancy agreement – Decided against assessee. - I.T.A No. 337 to 339/Coch/2013 - - - Dated:- 18-10-2013 - N.R.S. Ganesan And B.R. Baskaran, JJ. For the Appellant : R. Krishna Iyer. For the Respondent : K.K. John. ORDER:- PER : N.R.S. Ganesan All the three appeals of the assessee are directed against the common order passed by the CIT(A)-III, Kochi pertaining to assessment years 2004-05 to 2006-07. Since common issue arises for consideration in all the three appeals, we heard them together and dispose of the same by this common order. 2. Shri R Krishna Iyer, the ld. representative for the assessee submitted that the assessee engage ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... m Small Scale Ind. Dev. Corpn. Ltd. v. J.D. Pharmaceuticals [2005] 13 SCC 9, the ld. representative submitted that the expression in the agreement cannot be a decisive factor. The nature of transaction is required to be determined on the basis of the substance and not by the nomenclature. Therefore, merely because it was mentioned as consultancy charges in the agreement, the real substance of marketing the product cannot be ignored. The ld. representative has also placed his reliance on the judgment of the Kerala High Court in the case of Joe Joseph v. K.C. Moideen 1996 (i) KLJ 656. 3. The ld. representative further submitted that new sub sections (3) and (4) were inserted in section 201 with effect from 01-04-2010. According to the ld. r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... se of doing marketing survey and the assessee is paying consultancy charges. The agreement nowhere states that the foreign party has to market the product of the assessee in South East Asian countries. In the absence of any enabling provision to enable the foreign party to market the assessee's product in foreign countries, the payment made by the foreign party cannot be construed as payment for marketing. According to the ld. DR, marketing survey and identifying the potential customers for the assessee's product are only consultancy services and therefore, the payment made to foreign party is taxable in India. Hence, the assessee is bound to deduct tax u/s 195 of the Act. Referring to the provisions of section 201(3) of the Act, the ld. DR ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e order of the assessing officer. 6. Now coming to the provisions of section 201(3), the legislature introduced the limitation for passing the order u/s 201 by Finance Act, 2009 with effect from 01-04-2010. In respect of the financial year before 01-04-2007 a period is prescribed saying that the order may be passed on or before 31-03-2011. Therefore, it is not a case of retrospective operation. It is only a regular operation of law. The enactment is prospective in nature. Only in respect of the earlier assessment year the legislature has fixed time limit for passing the order. Therefore, this Tribunal is of the considered opinion that it is not an act of impossibility as contended by the assessee. 7. The case laws referred to by the ass ..... X X X X Extracts X X X X X X X X Extracts X X X X
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