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TMI Blog2014 (5) TMI 886X X X X Extracts X X X X X X X X Extracts X X X X ..... spect of same assessment year, which is not permissible in the eyes of law. - Decided partly in favor of assessee. - I .T.A. No.6562/MUM/2009, I .T.A. No.219/MUM/2010, I .T.A. No.6888/MUM/2011, I .T.A. No.6889/MUM/2011, I .T.A. No.8892/MUM/2010 - - - Dated:- 7-3-2014 - SHRI I.P. BANSAL AND RAJENDRA, JJ. S/ShriKanchan Kaushal Dhanesh Bafna for the Appellant Shri Ajay Shrivastava for the Respondent ORDER I.P. Bansal, JM ITA No.6562/Mum/2009 219/Mum/2010 are cross appeals directed against order passed by Ld. CIT(A)-10, Mumbai dated 29/10/2009 for assessment year 2006-07. ITA No.6888/Mum/2011 is an appeal filed by the assessee against assessment order dated 11/8/2011 for assessment year 2006-07 passed under section 144C(13) r.w.s. 143(3) r.w.s. 147 of the Income Tax act, 1961 (the Act). ITA No.8892/Mum/2010 and ITA No.6889/Mum/2011 are also appeals field by the assessee against assessment orders dated 27/10/2010 and 10/8/2011 passed under section 144C(13) r.w.s. 143(3) of the Act for assessment years 2007-08 and 2008-09 respectively. 2. In ITA No.6888/Mum/2011 6889/Mum/2011 the assessee has also filed additional grounds. The grounds of appeal in a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... applying a higher rate of tax i.e. 20% (excluding surcharge and cess) as per section in 115A(1)(b)(A) of the Act to the payments made by SCB India to the assessee, disregarding the revised rate of tax applicable for agreements entered into after June 1, 2005, i.e. 10% (excluding surcharge and cess). In doing so, the Learned AO failed to take cognizance of the fact that the assessee started rendering services to SCB India from Hongkong only from August 2005. 1.4 Without prejudice to above Ground No. 1.3, the Learned AO and the DRP erred in denying the benefit of the rate prescribed under section 11 5A of the Act. In doing so, the Learned AO and the DRP held that SCB India is a non resident company and does not fall within the ambit of the term 'Indian concern' as per the provisions of section 115A of the Act and accordingly, the provisions of section 115A of the Act do not apply to the payments made by SCB India. 2. On the facts and in the circumstances of the case and in law, the Learned AO erred in levying interest under section 234B of the Act without appreciating that the entire income of the assessee is subject to deduction of tax at source and hence, the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ejudice to Ground Nos. 1.1 to 1.2, on the facts and in the circumstances of the case and in law, while calculating the tax liability of the Appellant, the learned AD has erred in adopting chargeable income as Gross receipts instead of net receipts received by the Appellant (i.e. After deducting the expenses attributable to Gross receipts). The Appellant humbly prays that the learned AD be directed to compute the chargeable income of the Appellant by adopting net receipts instead of Gross receipts. Grounds of Appeal in ITA No.No.8892/M/2010(Assessee's Appeal) : 1.1 On the facts and in the circumstances of the case and in law, the Additional Director of Income-tax, Range 1, Mumbai ('the Learned AO') and the Dispute Resolution Panel ('the DRP') erred in holding the sum of Rs.20,08,93,494 as Royalty' and 'Fees for Technical Services' under Section 9(1)(vi) and 9(1)(vii) of the Income tax Act, 1961 ( the Act ). 1.2 Without prejudice to above Ground No. 1.1, the Learned AO and the DRP erred in applying a higher rate of tax i.e. 20% (excluding surcharge and cess) as per section in 115A(1)(b)(A) of the Act to the payments made by SCB India to t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (vi) of the Act as well as under Article 12(3) of the DTAA prevailing between India and Singapore instead of in the nature of business profit. However, the receipts of the assessee in the years under consideration are from Hongkong and India does not have any DTAA with Hongkong, therefore, the taxability or otherwise of the receipts of the assessee in its hand in India is required to be examined under the domestic provisions which also have been amended by the Finance Act, 2012 by way of insertion of explanations 4, 5 5 to section 9(1)(vi) of the Act. Therefore, though the orders rendered by the Tribunal may be helpful to some extent but the issues raised in the present appeals are required has to be examined in the light of amended provisions of section 9(1)(vi) which have not been examined either by the AO, DRP or by the Tribunal. Thus the main issue which involved in all these appeals is regarding the taxability or otherwise of the receipts of the assessee in the light of the aforementioned amended provisions. The aforementioned amendment is applicable from retrospective effect i.e. from 1/6/1976. Since the said retrospective amendment has been brought by the Finance Act, 2012 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssment Year Draft Assessment Order DRP's/CIT(A)'s Order Final Assessment order. 2006-07 NA October 29, 2009 (CIT(A) order) Dec.18, 2008 2007-08 Dec.12, 2009 Sept. 23, 2010 (DRP directions) Oct.27, 2010 2008-09 Dec.23, 2010 June 30, 2011 (DRP directions) Aug.2011 5.2 On the above mentioned facts it was submitted by Ld. AR that as the matter has to be examined afresh in the light of aforementioned retrospective amendment, it would serve the interest of justice if the appeals except ITA No.6888/Mum/2011 are restored back to the file of AO. Ld. AR has also filed a letter and referring to the above facts it is pleaded in the letter that the matter should be restored back to the file of AO. The relevant portion of the said letter is reproduced below: 4.1 The Ld. AO while passing the order for AY 2006-07 followed his predecessor's order in the case of ATOS Singapore to hold that the payme ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tax applicable will become infructuous. Ld. DR further submitted that the other issue raised by the assessee in ITA No.6888/Mum/2011 is regarding interest levied under section 234B of the Act. According to Ld. DR the said issue is consequential to the assessed income which has also to be considered by the AO while examining the liability of the assessee and assessee will be having right to file objections against such levy which will be decided by the AO as per law. To such submission of Ld. DR, Ld. AR submitted that the issue regarding levy of interest under section 234B though is consequential but its levy can be challenged by the assessee as per law if the matter is restored back to the file of AO. 6. We have heard both the parties and their contentions have carefully been considered. From the above discussion is clear that the liability or otherwise of the assessee regarding its receipts has to be re-adjudicated in the light of aforementioned retrospective amendment. The orders passed in the assessee's case by the AO, DRP and ITAT are prior to the aforementioned amendment in the Statute. Therefore, we are of the opinion that it would serve the interest of justice if all ..... X X X X Extracts X X X X X X X X Extracts X X X X
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