9911796707
TMI Blog2013 (12) TMI 301X X X X Extracts X X X X X X X X Extracts X X X X ..... .J. Pardiwalla. ORDER:- PER : Rajendra Assessing Officer (AO) as well as the assessee-company has filed Appeal/Cross-Objection against the order dt. 16-06-2009 of the CIT(A)-III, Mumbai. Grounds of Appeal filed by the AO reads as under: On the facts and in the circumstances of the case and in law, the learned CIT(A) has erred in allowing relief to the assessee to the extent impugned in the grounds enumerated below:- 1. The Ld. CIT(A) erred in deleting the addition of Rs.47,56,655/- being surveyor fee paid to ABS group of companies on which TDS was not deducted for which A.O. had rightly invoked the provisions of Sec. 40(a)(ia). 2. The Ld. CIT(A) erred in deleting the addition of Rs. 44,61,705/- made by the A.O. by disallowing expenses U/s.37(1) as the assessee could not prove the genuiness of the transactions. 3. The Ld. CIT(A) erred in deleting the addition of Rs. 23,73,681/- which was shown as payable to the creditors viz: ABS group of companies towards inspection services which were non verifiable and unconfirmed. 4. For these and other grounds that may be urged at the time of hearing, the decision of the CIT(A) may be set aside and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 94 Lakhs) and Surveyor Fee paid to ABS Group of Companies (Rs. 44.61 Lakhs). He further observed that the assessee had paid the Surveyor charges/fees in foreign currency amounting to Rs. 27.27 Lakhs. AO was of the opinion that payments to Group companies was covered under provisions of Section 195 of the Act. He made a specific query to the assessee-company as to why the TDS was not deducted on reimbursement and payments made to the group concerns? As per the AO, assessee did not offer any explanation for Rs. 47.56 Lakhs (44.61 Lakhs + 2.94 Lakhs). He further directed the assessee to submit details of transactions with group/associate concerns with justification. As per the AO, assessee did not submit any details in this regard or any justification/reasonableness of any payment made to the group concerns that were covered u/s. 40A(2)(b) of the Act. After considering the Para 18 of the Tax Audit Report, he held that assessee did not furnish the name and addresses, amounts paid/payable to the persons covered under the provisions of Section 40A(2)(b) of the Act, that the assessee did not furnish the nature of service availed/basis of determination of amount payable/reasonableness of a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion of TDS, that AO himself had mentioned the justification of the expenses incurred by the assessee-company, that AO had totally missed the linkage between the expenses incurred and nature of activities carried out by the assessee-company. Finally, he deleted the dis-allowance made by the AO u/s. 37(1) of the Act. 3.2 With regard to non-deducting TDS and invoking of Section 40(a)(ia) of the Act, FAA held that issue on deductibility of TDS was not looked into by the AO. AO had not gone through the provisions of Double Taxation Avoidance Agreement (DTAA) of the countries concerned. Analyzing the provisions of DTAA with United States of America, he held that the nature of services obtained by the assessee-company from ABS Group of Companies was quality assurance, that ABS Group of Companies was surveying on behalf of the appellant - the quality/specification of the machinery, that such services were in the nature of technical services in terms of Article 12 of the INDO-US Treaty. Relying upon the order of the ITAT, Delhi delivered in the case of NQA Quality Systems Registrar Ltd. v. Dy. CIT [2005] 2 SOT 249 and Authority for Advance Rulings (AAR) Intertek Testing Services India (P. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed for Rs. 47.56 Lakhs, out of Rs. 47.56 Lakhs, Rs. 2.94 Lakhs were claimed by the assessee as reimbursement and balance Rs. 44.61 Lakhs were claimed as 'Surveyor Fee' to group companies. 5. Authorised Representative (AR) admitted that AO had not given any finding that income was chargeable, that assessee was not making available any data and knowledge etc., that it was giving effect back to the customers, that provisions of TDS were not applicable in the case of the company. He supported the order of the FAA. He relied upon the cases of Guy Carpenter Co. Ltd., [ 20 Taxmann.com 807(Delhi] delivered by the High Court of Delhi, De Beers India Minerals P. Ltd., [21 Taxmann.com 214 (Kar)] delivered by High Court of Karnataka, NQA Quality Systems Registrar Ltd., [2 SOT 249 (Delhi)] (supra) AAR Nos. 886 to 911, 913 to924, 927, 929 and 930 of 2010 in the case of XYZ delivered by AAR on 19-03-2012 6. After hearing the rival submissions and perusing the material available on record, we are of the opinion that the mater needs further verification. The taxability of the amount-in-question has not been properly examined by the AO. FAA has also not dealt the subject in proper perspective. W ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
