9911796707
TMI Blog2017 (5) TMI 708X X X X Extracts X X X X X X X X Extracts X X X X ..... incurred after setting of the business and before actual commencement of the business, hence, allowable under section 37 of the Act. This ground No. 1 of the appeal of the Revenue is rejected. Capitalization of professional charges - Held that:- We find that the learned Commissioner of Income-tax (Appeals) has analysed the party-wise list of expenses of 76,43,892 treated by the Assessing Officer as capital expenditure and concluded that only 15,27,790 was claimed by the assessee as professional charges in the profit and loss account and the balance expenses out of 76,43,892 were treated by the assessee as capital expenditure and, thus, cannot be disallowed again as the same has not been claimed as revenue expenditure. In respect of the expenses of 15,27,790, the learned Commissioner of Income-tax (Appeals) has held the same are incurred for running and operation of the assessee's business and accordingly he allowed the amount of 15,27,790 as revenue expenditure. The order of the learned Commissioner of Income-tax (Appeals) on the issue in dispute is comprehensive and well reasoned and thus no interference on our part is required - Decided against revenue TDS u/s 195 - treating the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cess to the asses see, which are of patentable nature having exclusive ownership rights. The assessee was not concerned with any of the process involved in transmission or connectivity of call data. The only concern of the assessee was transmission of call data beyond the boundaries of India to the person in the USA to whom call was made. Thus we hold that the payments made by the assessee are not in the nature of royalty either under the domestic law or relevant DTAA. No disallowance could have been made under section 40(a)(i) of the Act for non-deduction of tax on the payments to non-resident parties, namely, M/s. Kick Communication and M/s. IGTL Solutions. Accordingly, ground No. 1 of the appeal is allowed. Payments in the nature of fee for technical services (FTS) - Held that:- For service of transmission of call data from end of the Indian territory to the person in the USA to whom call is made the payment in question cannot be considered as fee for technical services (FTS) in terms of section 9(1)(vii) read with Explanation 2 of the Act. Since in the call connectivity and transmission from end of the Indian territory at Mumbai to the termination of call in the USA, no technic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iture claimed under the head 'professional charges' but had taken all such expenditure which were in the nature of professional charges and which were incurred in lieu of professional services. 3. The appellant craves leave to add, alter or amend any ground of appeal raised above at the time of the hearing." 3. The grounds of the assessee's appeal in I.T.A. No. 1927/Del/2008 for the assessment year 2002-03 are as under : "1. That on the law, facts and in the circumstances of the case, the learned Commissioner of Income-tax (Appeals) has erred in confirming the disallowance made by the learned Assessing Officer in respect of international private leased circuit (IPLC) charges paid to M/s. Kick Communication Inc. USA and connectivity charges paid to M/s. IGTL Solution Inc. USA amounting to ₹ 15,98,596 and ₹ 40,29,614 respectively on the ground that no tax was deducted at source under section 195 of the Income-tax Act, 1961 before making such payment. 1.1 On the facts and in the circumstances of the case, the Commissioner of Income-tax (Appeals) erred in upholding the action of the Assessing Officer in treating the payment of IPLC and connectiv ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... red revenue expenditure deleted by the learned Commissioner of Income-tax (Appeals), has been challenged. The facts in respect of issue in dispute are that in the computation of income, the Assessing Officer observed the claim of the deferred revenue expenditure amounting to ₹ 95,33,520. The Assessing Officer further observed that in the books of account maintained for the purpose of the Companies Act, the assessee amortised the above sum for a period of 36 months. It was contended by the assessee that the deferred revenue expenditure which was allocable to fixed asset, incurred during the pre-commencement period was capitalised and which was not applicable to the fixed asset directly or indirectly, was written off or amortised to be written off in the financial books of the company over a period of 36 months. On the other hand, the Assessing Officer was of the view : "(i) that for the allowability of an expenditure under section 37(1) of the Act, it should be wholly and exclusively incurred during the year for the purpose of business; (ii) that the expenses claimed were purely revenue in nature and incurred before the commencement of the business; (iii) that the e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iness operation on December 20, 2001 and yielded loss for the period under consideration relevant to the assessment year 2002-03 but it does not mean that deferred revenue expenditure not directly allocable to fixed assets would be treated as dead expenditure and expenditure incurred for the purpose of business of the company, be it after setting of the business but before commencement of its business operation on commercial scale, is to be construed as allowable expenditure under the Act; and (vi) that the expenditure was treated as deferred revenue expenditure in the financial books over a period of 36 months so as not to distort profit or loss for the purpose of disclosure to the shareholders of the company." 6.4 The learned Commissioner of Income-tax (Appeals) observed that the assessee-company raised a share capital and received share application money during the immediately preceding year and out of which substantial amount was incurred towards capital work-in-progress. During the immediately preceding year, an amount of ₹ 3.79 crores was also obtained by way of current liabilities and provisions for operating the call centre. According to the learned Commission ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aim over a period of three years, whereas for the purpose of Income-tax, the assessee claimed the entire expenses in the year under consideration. The Assessing Officer has not disputed the nature of the expenses as revenue. The objection of the Assessing Officer is that the business of the assessee was commenced on December 20, 2001 i.e. during the year under consideration and, therefore, any expenses which are revenue in nature and incurred prior to the commencement of the business, can either be claimed under section 35A to section 35E of the Act or cannot be allowed under the provisions of the Income-tax Act. The assessee is also agreed that on December 20, 2001 the company installed and put to commercial use 50 seats of the call centre and the remaining 92 seats were still under installation/implementation and thus business commenced on December 20, 2001. However, the contention of the assessee is that the business was already set up in the immediately preceding year and the revenue expenditure incurred after setting up of the business is allowable in terms of section 37 of the Act. The learned Commissioner of Income-tax (Appeals) relying on the case law cited in the impugned ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... il and May, 2004, the actual BPO services to the parent company were not rendered. When the said services actually were rendered or the assessee did start rendering of services to a third party, the business commenced. This, according to us, does not mean that business had not been set up by the appellant-assessee. In order to determine whether business had been set up or not, we have to look at the factual matrix of the case, especially, the nature and character of the business activity with the activities actually undertaken. The appellant-assessee had entered into an agreement with their sister concern, M/s. Agilis, to use their premises between 2000 hours to 0800 hours between April 1, 2004 and June 30, 2004. M/s. Agilis was paid on pro rata basis for water, electricity, energy and power consumption charges. Further, the appellant-assessee had to install a separate internet link from the internet service provider. The appellant-asses see had a choice to use the personal computers of M/s. Agilis or install their own. The break-up of the expenditure of ₹ 59,02,448, incurred during this period included expenses for lease line charges of ₹ 2,74,331, telephone expenses o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t paragraph is reproduced as under (page 13 of 369 ITR) : "Upon recruitment of employees, the factum that expenditure under the different heads, as noticed above, was incurred is indicative that business was set up. Training to the employees was given to ensure that when the work was undertaken and performed, there were no glitches, trouble or problems. It is not indicative of the fact that necessary infrastructure was not there and actual business could not have commenced or was not set up. Training was post set up as the employees were recruited. In the case of service industry, training and upgradation of skills of employees is a part and parcel of the business activity, a continuous process. The business as a service provider, cannot exist without the said activity being undertaken both at the very initial stage and after business has commenced. Training is done to ensure proper performance and to provide services of accept able quality or ensure zero or minimal errors. It is to ensure proper standards and optimum utilisation of human resources already employed. It helps in improving productivity, maintaining team work and strengthening bonds interse. In the present case ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t the business of the assessee was set up in the immediately preceding year. Further, in view of the decision of the Hon'ble High Court in the case of CIT v. Samsung India Electronics Ltd. the expenses incurred after set up of the business and before the actual commencement of the business are allowable. Accordingly, we hold that the expenses claimed by the assessee are revenue in nature and incurred after setting of the business and before actual commencement of the business, hence, allowable under section 37 of the Act. This ground No. 1 of the appeal of the Revenue is rejected. 7. In ground No. 2 of the appeal, the Revenue has raised that while deleting the addition of ₹ 76,43,892 on account of capitalisation of professional charges, the learned Commissioner of Income-tax (Appeals) ignored the fact that the Assessing Officer had taken all such expenditure which were in the nature of professional charges and which were incurred in view of professional services. 7.1 The facts in respect of issue in dispute are that the Assessing Officer observed that in the profit and loss account a large sum of money was paid as professional charges during the assessment year and after ob ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... act that other than the expenses of ₹ 15,27,790, all the expenses included under ₹ 76,43,892 were already treated by the assessee as capital expenditure and the expenses of ₹ 15,27,790 being revenue in nature, he deleted the addition made by the Assessing Officer in respect of the professional charges. He, accordingly, submitted that the action of the learned Commissioner of Income-tax (Appeals) was justified and required to be upheld. 7.4 We have heard the rival submissions and perused the relevant material on record. We find that the learned Commissioner of Income-tax (Appeals) has analysed the party-wise list of expenses of ₹ 76,43,892 treated by the Assessing Officer as capital expenditure and concluded that only ₹ 15,27,790 was claimed by the assessee as professional charges in the profit and loss account and the balance expenses out of ₹ 76,43,892 were treated by the assessee as capital expenditure and, thus, cannot be disallowed again as the same has not been claimed as revenue expenditure. In respect of the expenses of ₹ 15,27,790, the learned Commissioner of Income-tax (Appeals) has held the same are incurred for running and opera ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng Officer. Thus whereas the Assessing Officer has not considered payments to Unicon Consulting, S. R. Wadhwa, Leading Edge Consultants, Jerath Electronic and Allied Industries, Charan Gupta Enterprises, the counsellor, S. K. Sharma and Co. Ravi Parkash Jerath, Sushil Jeetpuria and Co., although those names appear in the accounts under professional charges, the Assessing Officer has in turn referred to payments by the appellant to Fonet Consultancy Pvt. Ltd. Nest 4 India Ltd., North Star Call Centre College, Main Stream and Shardha India. Those latter parties do not figure under professional charges as per the appellant's claim. Moreover the Assessing Officer has included an amount of ₹ 36,29,950 payable to GTL Ltd. as capital expenditure from out of the appellant's claim of professional expenditure, whereas the appellant in the schedule of professional charges refers to a payment of ₹ 9,00,000 to GTL Ltd. The result of the omission of payments to specific parties or including parties whose names do not appear in the list of professional charges, or excess allocation of expenditure against specific party in the assessment order has resulted in disallowance of &# ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ls) on the issue in dispute is comprehensive and well reasoned and thus no interference on our part is required on the finding of the learned Commissioner of Income-tax (Appeals), accordingly, we uphold the same. Ground No. 2 of the appeal of the Revenue is rejected. 8. In the result, the appeal of the Revenue is dismissed. I. T. A. No. 1927/Del/2008 for the assessment year 2002-03 9. In the ground No. 1 raised in its appeal, the assessee has challenged the finding of the learned Commissioner of Income-tax (Appeals) in upholding the action of the Assessing Officer in treating the payment of International Private Leased Circuit (IPLC) to M/s. Kick Communication Inc., USA and connectivity charges to M/s. IGTL Solution Inc. USA of ₹ 15,98,596 and ₹ 40,29,640 respectively, chargeable to tax in India as "royalty" under section 9(1)(vi) of the Act and article 12 of the Double Taxation Avoidance Agreement between the USA and India and consequent disallowance under section 40(a)(i) on the ground that no tax was deducted at source under section 195 of the Act before making such payments. In ground No. 1.1, the assessee has challenged the alternative finding of the l ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in India as the cable on which bandwidth was made available was lying outside India. 9.5 According to the Assessing Officer, the authorised representative of the assessee took the physical existence of the cable for establishing its case of services rendered outside India by a non-resident entity. However, the Assessing Officer was of the view that service was not in the physical sense but it was a service provided on a physical cable. M/s. Kick Communication was also given the responsibility of rectifying the connectivity problems. The Assessing Officer referred to paragraphs 2 and 3 of service level agreement between the assessee and M/s. Kick Communication and observed that M/s. Kick Communication was having its own dedicated network management function and the technical management team for providing services of restoration, notification to the customer of updates and current information as required, alarm handling and management, fault co-ordination management, network and service interruption, co-ordination and management, network and service reporting, preventing monitoring and maintenance, preventing field maintenance. 9.6 The Assessing Officer further referred to paragrap ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ces in the nature of maintenance fall within the definition of royalty and thus the tax was required to be deducted. Further the Assessing Officer stated that article 12 of the Double Tax Avoidance Agreement (DTAA) between India and the USA deals with royalties and fees for included services and the term "royalty" has been defined in clause 3(b) as payment of any kind received as consideration for use of, or the right to use, any industrial, commercial or scientific equipment and therefore the term royalty has been defined on similar lines as per section 9 of the Act. The Assessing Officer held that income deemed to accrue or arise in India within the meaning of section 9 and the DTAA and tax was to be deducted on this amount before making payments and therefore he disallowed the payment in terms of section 40(a)(i) of the Act for non-deduction of tax. 9.7 Regarding disallowance of payments to M/s. IGTL Solutions amounting to ₹ 40,29,614 under section 40(a)(i), the Assessing Officer observed that the assessee-company under an agreement paid to M/s. IGTL Solutions for providing connectivity facility from IPLC leased line to local PSTN network (basic telephoning netw ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r establishing each service interconnection and shall bear the cost of the service interconnection, has the responsibility of installation, testing, operation of and cost associated with the facility, services and equipment at the Miami co-location other than those specifically to be provided by Kick Communication and shall include any co-ordination with VSNL at Mumbai, and T-1 at the US end. In the event that the appellant believes that a condition has occurred effecting service, the appellant would immediately contact Kick Communication's designated network operating centre to open a report and thereafter Kick Communication which takes steps to determine the indicated on the report. In terms of clause 14 of the agreement, the recitals thereof are said to be confidential and no disclosure thereof will be made to any third party. In terms of service level agreement dated August 9, 2001, it has been stated that Kick Communications would commit for 99.5 per cent. service availability guarantee. That it has its own dedicated network management function located in New York managed 365 days x 24 hours x 7 days a week. Kick Communication's technical management team shall provide ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nectivity are in working condition. In accordance with clause 10 of the agreement, the recitals and the information contained in the agreement have been treated as confidential." 9.9.1 In the light of the facts of the case, the learned Commissioner of Income-tax (Appeals) held that the decisions relied upon by the assessee were either not applicable over the facts of the case or distinguishable. 9.9.2 The learned Commissioner of Income-tax (Appeals) relied on the decision of the Tribunal in the case of Asia Satellite Telecommunications Company Ltd. v. Deputy CIT [2003] 85 ITD 478 (Delhi), wherein it was held that lease rent payments by TV channels for using transponder capacity so as to enable the cable operators to catch their program to the assessee was in the nature of royalty as contemplated under section 9(1)(vi)(c) of the Act. 9.9.2 The learned Commissioner of Income-tax (Appeals) concurred with the finding of the Assessing Officer that the payments made to the two parties were in the nature of royalty with the findings as under : ". . . In the case of the appellant, the IPLC process of Kick Communications was made available under a non-assignable and confident ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t to TDS under section 194J. Fees for technical services for the purposes of TDS under section 194J is as per the definition given in Explanation 2 to section 9(1)(vii). Going by the citation above and aligning to the facts under appeal, the appellant has paid for connectivity charges to non-residents. The appellant is a resident. The charges were not payable with respect of services utilised in the business by the appellant outside India. The amount was also not paid for the purpose of making or earning any income from any source outside India. Article 12 of the DTAA between India and the USA provides that fees for included services arising in any Contracting State and paid to a residents of other Contracting State may also be taxed in the Contracting State in which it arises according to the laws of that State at the rate prescribed in article 12(2). Article 12(4) defines the words 'fees for included services'. As per this clause, the payments for rendering technical services, or consultancy services, if such services make available technical knowledge, experience, skill, know-how or processes, or consist of development and transfer of technical plan or technical design c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the DTAA between the USA and India. (iii) The payments made for bandwidth charges for completion of the international leg of the call to non-resident companies was neither royalty nor fee for technical services as held by the Authority for Advance Rulings in the case of Cable and Wireless Networks India Private Ltd., In re [2009] 315 ITR 72 (AAR) (AAR No. 786 of 2008). The special leave petition filed by the Revenue against the decision of the Authority for Advance Rulings was dismissed in SLP No. 6392 of 2010. In support of the contention, the assessee also relied on the decision of the Authority for Advance Rulings in the case of Dell International Services (India) P. Ltd., In re reported in [2008] 305 ITR 37 (AAR). (iv) In the case of Cable and Wireless Networks India Private Ltd. [2009] 315 ITR 72 (AAR) (AAR No. 786 of 2008) the assessee- company proposed to enter into an agreement with another group company namely M/s. Cable and Wireless UK with a view to provide end-to-end international long distance telecommunication services to its Indian customers and M/s. Cables and Wireless UK was required to provide the international leg of the service using its international infr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the interconnecting telecom operators and therefore the payment of interconnectivity charges made to the foreign telecom operators do not fall within the ambit of royalty under section 9(1)(vi) of the Act as well as the term 'royalty' under the DTAA. Further it is held that the change in domestic law cannot be read into the treaties as long as there is no change in the wording of the treaties. In the case of the assessee also the payment has been made for connecting the domestic leg of the call with the international leg of the call. (vii) That retrospective amendment in law cannot have retrospective effect to the TDS provisions or lead to disallowance under section 40(a)(i) of the Act. In support of the contention, he relied on the decision of the Tribunal, Delhi Bench in the case of Business India Television International Ltd. v. Asst. CIT reported in [2007] 11 SOT 486 (Delhi) and other decisions listed in the compilation of case law. (viii) The Hon'ble Supreme Court in the case of GE India Technology Centre (P) Ltd. v. CIT reported in [2010] 327 ITR 456 (SC) held that the payer is bound to deduct tax at source only if the income is assessable in India. If income is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... analysis of the agreements with both the non-resident parties by the learned Commissioner of Income-tax (Appeals), we find that M/s. Kick Communication was not only responsible for providing smooth transmission of call data, it was also responsible for managing the faults arising in the transmission of calls and providing all information to the assessee in respect of the transmission of call data. Similarly, M/s. IGTL Solutions was responsible for smooth transmission and management of call data from the entry point in the USA to the person to whom the call was made. The lower authorities have not raised any issue of rendering service by the non- resident parties through any permanent establishments in India. The Assessing Officer held that there was certainly a business connection between the assessee and the non-resident parties and the payments were made for using facilities of non-resident parties by the assessee from India. He further held that the payments made for services rendered by the above two non-resident parties was in the nature of royalty as the assessee was having the right to use of bandwidth and technical services in the nature of maintenance in terms of Explanati ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s are limited to the purchase of goods or merchandise for the non- resident; or (b) has no such authority, but habitually maintains in India a stock of goods or merchandise from which he regularly delivers goods or merchandise on behalf of the non-resident; or (c) habitually secures orders in India, mainly or wholly for the non-resident or for that non-resident and other non-residents controlling, controlled by, or subject to the same common control, as that non-resident : Provided that such business connection shall not include any business activity carried out through a broker, general commission agent or any other agent having an independent status, if such broker, general commission agent or any other agent having an independent status is acting in the ordinary course of his business : Provided further that where such broker, general commission agent or any other agent works mainly or wholly on behalf of a non- resident (hereafter in this proviso referred to as the principal non-res ident) or on behalf of such non-resident and other non-residents which are controlled by the principal non-resident or have a control ling interest in the principal non-resident or are subje ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sident are made at arm's length and at prices which would be normally chargeable to other customers, (c) the non-resident exercises no control over the business of the resident and sales are made by the latter on his own account, or (d) the payment to the non-resident is made on delivery of documents and is not dependent in any way of the sales to be effected by the resident. It can be inferred that the transactions are on the basis of principal to principal. (ii) A question may arise in the above type of cases whether there is any liability of the non-resident under section 5(1) of the Income-tax Act, 1961, on the basis of receipt of sale proceeds including the profits in India. If the non-resident makes over the shipping documents to a bank in his own country which discounts the documents and sends them for collection to the bankers in India, who present the sight or usance draft to the resident importer and deliver the documents to him against payment or acceptance by the latter, the non-resident will not be liable to tax on the profit arising out of the sales on receipt basis. Even if the shipping documents are not discounted in the foreign country, but are handed o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ition is that the first two steps are not carried out in India and the entire thrust of the Revenue is limited to the third step and the argument is that the relaying of the programmes in India amounted to the operations carried out in India. Whether this argument is sustainable ? Answer is emphatic no ! Merely because the footprint area includes India and the programmers by ultimate consumers/viewers are watching the programmes in India, even when they are uplinked and relayed outside India, would not mean that the appellant is carrying out its business operations in India. The Tribunal has rightly emphasised the expressions 'operations' and 'carried out in India' occurring in Explanation (a) to hold that these expression signify that it was necessary to establish that any part of the appellant's operations were carried out in India. No machinery or computer, etc. is installed by the appellant in India through which the programmes are reaching India. The process of amplifying and relaying the programmes is performed in the satellite which is not situated in the Indian airspace. Even the tracking, telemetering and control (TTC) operations are also performed outs ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a patent, invention, model, design, secret formula or process or trade mark or similar property; (iii) the use of any patent, invention, model, design, secret formula or process or trade mark or similar property; (iv) the imparting of any information concerning technical, industrial, commercial or scientific knowledge, experience or skill; (iva) the use or right to use, any industrial, commercial or scientific equipment but not including the amounts referred to in section 44BB; (v) the transfer of all or any rights (including the granting of a licence) in respect of any copyright, literary, artistic or scientific work including films or video tapes for use in connection with television or tapes for use in connection with radio broadcasting, but not including consideration for the sale, distribution or exhibition of cinematographic films; or (vi) the rendering of any services in connection with the activities referred to in sub-clauses (i) to (iv), (iva) and (v)." 10.1 The Assessing Officer has invoked clause (iva) of the Explanation according to which consideration for the use or right to use any industrial, commercial or scientific equipment falls under the royalt ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d Commissioner of Income-tax (Appeals) has referred to consideration for use of the process of transmission of data as royalty. In our opinion, in Explanation 2, the process referred, is the patentable process and the consideration received for allowing use of such patentable process for manufacturing or any other use has been termed as royalty. For earning royalty, the person should have exclusive rights in respect of the process embedded. But in the case of the assessee, we do not find any mention in the agreement for the use of any process, which is of a patentable nature or under exclusive rights of the non-resident party. Further, we also find from the agreements with the Kick Communication that no information concerning technical, industrial, commercial or scientific knowledge, experience or a skill has been imparted to the assessee by the non-resident party. All the services mentioned in the service level agreement are to effect the service of transmission of data and its effective management so as to ensure 99.50 per cent. service availability guarantee as agreed between the parties. In our opinion clause (iii) and clause (iv) of Explanation 2 are not applicable over the fa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lms or work on film, tape or other means of reproduction for use in connection with radio or television broadcasting, any patent, trade mark, design or model, plan, secret formula or process, or for information concerning industrial, commercial or scientific experience, including gains derived from the alienation of any such right or property which are contingent on the productivity, use, or disposition thereof; and (b) payments of any kind received as consideration for the use of, or the right to use, any industrial, commercial, or scientific equipment, other than payments derived by an enterprise described in paragraph 1 of article 8 (Shipping and Air Transport) from activities described in paragraph 2(c) or 3 of article 8." 10.11 The learned Assessing Officer has held consideration received for use of or right to use any industrial, commercial or scientific equipment as royalty. The learned Commissioner of Income-tax (Appeals) has held consideration for use or right to use of process or information as royalty. As we have already held that in the facts of the case only services of trans mission of call and connectivity from the end of the Indian Territory to the person to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gory, the rights are purchased which enable the use of those rights, while in the second category, no purchase is involved, only right to use has been granted. Ownership denotes the relationship between a person and an object forming the subject-matter of his ownership. It consists of a bundle of rights, all of which are rights in rem, being good against the entire world and not merely against a specific person and such rights are indeterminate in duration and residuary in character as held by the Supreme Court in the case of Swadesh Ranjan Sinha v. Haradeb Banerjee, AIR 1992 SC 1590. When rights in respect of a property are transferred and not the rights in the property, there is no transfer of the rights in rem which may be good against the world but not against the transferor. In that case, the transferee does not have the rights which are indeterminate in duration and residuary in character. Lump sum consideration is not decisive of the matter. That sum may be agreed for the transfer of one right, two rights and so on all the rights but not the ownership. Thus, the definition of the term 'royalty' in respect of the copyright, literary, artistic or scientific work, paten ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing IBM unit record machine computer. The assessee received vouchers and statements of accounts from its customers and converted them into balance-sheets, stock accounts, sales analyses etc. They were printed as per the requirement of the customers. The Karnataka High Court held that in all these activities, the assessee had to play an active role by co-ordinating the activities and collecting the information. Such activities amounted to processing of goods. In the case of N. V. Philips v. CIT (No. 1) [1988] 172 ITR 521 (Cal), the assessee received the amount for providing specialised knowledge of manufacturing particular commodity which included working methods, manufacturing process including indications, instructions, specifications, standards and formulae, method of analysis and quality control. It was held that the payment for the user of such specialised knowledge, though not protected by a patent, was assessable as royalty. In the case of DCM Ltd. v. ITO [1989] 29 ITD 123 (Delhi), the issue related to transfer of comprehensive technical information know-how and supply of equipment. It was held that the collaboration agreement dealing with the dispatch of one or more of its e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pellant has launched its satellites in the orbit footprint on which it is extended over four continents including Asia and, thus, covers India. (d) The agreement signed with the customers which are television channels, the appellant provides facility of transponder capacity available on its satellite to enable these television channels to relay their signals. These customers have their own relaying facilities, which are situated outside India. From this facility, the signals are beamed in space where they are received by a transponder located in the appellant's satellite. The transponder receives the signal and on account of the distance these signals have to travel, they are required to be amplified. After amplification frequency of signals are downlinked to facilitate the transmission of signals. This is how the signals are received over various parts of the earth spanning numerous countries including India. (e) The outcome, thus, would entirely depend upon the question as to whether any 'process' is used by the television channels and also whether a 'secret process' is required to bring within the ambit of Explanation 2. Once we keep in mind the aforesa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ough data commands issued from the ground station (INLUS). Undeniably, the applicant will not be able to operate the transponder in space but it will be transmitting/uplinking the augmented data to the navigation transponder. Access to the transponder's space capacity is established through the applicant's operations at the ground station (INLUS) pursuant to which the transponder transmits signals/data received from INLUS from the geostationary orbits. The Inmarsat satellite carries many transponders out of which the transponder for navigation purposes will provide the satellite based augmentation system signals in space at two frequencies i.e. 1575.42 MHz (L1) and 1176.45 MHz (L5) which are accessed for the GAGAN project undertaken by the applicant. It is also seen that the navigation transponder which uplinks and downlinks the data is a passive transponder unlike the communication transponder. It will be relevant to know the connotation of the term "trans ponder". In McGraw Hill's Dictionary of Scientific and Technical Terms, the meaning given is a "transmitter-receiver capable of accepting the challenge of an interrogator and automatically trans mitt ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erage area. In response to a query, the applicant specifically clarified that the transponder does not perform any operation with reference to the data uplinked and downlinked and "there is no on-board data storage".' It is worthwhile to note that the contention of the Department that there was use of transponder by the applicant was specifically rejected in the following terms (page 68) : 'It is contended by the Revenue that in substance, there is use of equipment i.e. transponder by the applicant. The exclusive capacity of specific transponder is kept entirely at the disposal of the applicant. The use of the transponder is ensured when it responds to the directions sent through the ground station. Such directions, it is stated, are akin to the operation of television by remote control apparatus. We find it difficult to accept this contention. The fact that the transponder automatically responds to the data commands sent from the ground station network and retransmits the same data over a wider footprint area covered by the Inmarsat satellite does not mean that the control and operation of transponder is with the applicant. Undoubtedly, the applicant does not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Authority for Advance Rulings discussed the issue and held that the transponder and the process therein are actually utilised for the satellite user for rendering the services to the customer and further that it cannot be said that the transponder or process employed therein are used by the customer. It needs to be emphasised that a satellite is not a mere carrier, nor is the transponder something which is distinct and separable from the satellite as such. It was explained that the transponder is in fact an inseverable part of the satellite and cannot function without the continuous support of various systems and components of the satellite, including in particular : (a) Electrical power generation by solar arrays and storage battery of the satellite, which is common to and supports multiple trans ponders on board the satellite. (b) Common input antenna for receiving signals from the customers' ground stations, which are shared by multiple transponders. (c) Common output antenna for retransmitting signals back to the footprint area on earth, which are shared by multiple transponders. (d) Satellite positioning system, including position adjusting thrusters and the fuel ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d results. The transponder is part of the satellite, which is fixed in the satellite and is neither moving in itself nor assisting the satellite to and the transponder, namely, a part of it, playing howsoever important role, cannot be termed as equipment.' Even after stating so, the Tribunal did not take the aforesaid view to its logical conclusion, viz., the process carried on in the trans ponder in receiving signals and retransmitting the same, is an inseparable part of the process of the satellite and that process is utilised only by the appellant who is in control thereof. Whether it is done with or without amplification of the signal would not make any difference, in such a scenario. We are inclined to agree with the argument of the learned senior counsel for the appellant that in the present case, control of the satellite or the transponder always remains with the appellant. We may also observe at this stage that the terms 'lease of transponder capacity', 'lessor', 'lessee' and 'rental' used in the agreement would not be the determinative factors. It is the substance of the agreement which is to be seen. When we go through the various c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n. Can it be said that right to use of the lorry has been transferred by the carrier to the customer ? The answer is obviously in the negative, as there is no transfer of the "use of the lorry" for the following reasons : (i) The lorry is never in the control, let alone effective control of the customer; (ii) the carrier decides how, when and where the lorry moves to the destination, and continues to be in effective control of the lorry; (iii) the carrier can at any point (of time or place) transfer the consignment in the lorry to another lorry; or the carrier may unload the consignment en-route in any of his godowns, to be picked up later by some other lorry assigned by the carrier for further transportation and delivery at destination. (ii) On the other hand, let us consider the case of a customer (say a factory) entering into a contract with the transport operator, under which the transport operator has to provide a lorry to the customer, between the hours 8 a.m. to 8 p.m. at the customer's factory for its use, at a fixed hire per day or hire per k.m. subject to an assured minimum, for a period of one month or one week or even one day; and under the contract, the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... appellant was to develop, design, engineer, procure equipment, materials and supplies to erect and construct storage tanks including marine facility (jetty and island breakwater) for transmission and supply of LNG to purchasers, to test and commission the facilities, etc. The contract involved : (i) offshore supply, (ii) offshore services, (iii) onshore supply, (iv) onshore services, and (v) construction and erection. The price for offshore supply and offshore services was payable in US dollars, that for onshore supply and onshore services and construction and erection partly in US dollars and partly in Indian rupees. The payment for offshore supply of equipment and materials supplied from outside India was received by the appellant by credit to a bank account in Tokyo and the property in the goods passed to Petronet on the high seas outside India. Though the appellant unloaded the goods, cleared them from customs and transported them to the site, it was for and on behalf of Petronet and the expenditure including the customs duty was reimbursed to it. The price of offshore services for design and engineering including detailed engineering in relation to the supplies, services and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... verseas office of the enterprise) would be within the meaning of the phrase 'directly or indirectly attributable to that permanent establishment' and, therefore, so much of the amount received or receivable by the appellant as was directly or indirectly attributable to the permanent establishment as postulated in paragraph 6 of the protocol would be taxable in India. The price of the offshore services would be deemed to accrue or arise under section9(1)(vii) of the Income-tax Act, 1961. And inasmuch as fees for technical services were specifically provided in article 12 of the Convention, they would not fall under article 7. Therefore, the price of the offshore services was taxable in India under the Act as well as the Convention. (iii) That, however, in view of section 115A(1)(b)(B) of the Act and article 12(2) of the Convention, tax was payable at the fixed rate of 20 per cent. of the gross amount of fees for technical services and the applicant would not be able to claim any deduction from the gross amount. In that case, the appellant approached the Supreme Court challenging the aforesaid judgment of the Authority for Advance Rulings. The Supreme Court reversed the d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion 9, whereupon the question of seeking assessment of such income in India on the basis of the Double Taxation Treaty would arise. Paragraph 6 of the protocol to the Convention was not applicable, because, for the profits to be 'attributable directly or indirectly', the permanent establishment must be involved in the activity giving rise to the profits. . . . (vi) That where different severable parts of a composite contract were performed in different places, as in this case, the principle of apportionment could be applied to determine which fiscal jurisdiction could tax that particular part of the transaction. This principle helped to determine where the territorial jurisdiction of a particular State lay and to determine its capacity to tax on event. Applying it to composite transactions which had some operations in one territory and some in the other, was essential to determine the taxability of various operations. Therefore, the concepts of profits of business connection and permanent establishment should not be mixed up. Whereas business connection was relevant for the purpose of application of section 9, the concept of permanent establishment was relevant for asses ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ment were owned and used by the non-resident parties only and therefore it cannot be said that the consideration paid was for use of equipment by the assessee. Similarly the non-resident parties have not provided use of any process to the asses see, which are of patentable nature having exclusive ownership rights. The assessee was not concerned with any of the process involved in transmission or connectivity of call data. The only concern of the assessee was transmission of call data beyond the boundaries of India to the person in the USA to whom call was made. 10.15 Identical issue came up before the Delhi Bench of the Tribunal in the case of Bharti Airtel Ltd. v. ITO (TDS) [2016] 47 ITR (Trib) 418 (Delhi), wherein also the issue whether payment towards call interconnectivity charges for call transmission on foreign network was amounted to royalty or not. The findings of the Tribunal are reproduced as under (page 441) : "11.4 Thus, the essence of the agreement is that each party to the contract shall connect to network of other party at port locations. It is not a case of lease or licence of network of foreign operator in favour of the appellant. Once two networks are inte ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on hire basis under a contract from non-resident Verizon Communications. This is a vital fact which makes all the difference. When an Indian company takes leased line on hire, then it can be said that it had 'used' it. In the present appeal under consideration, the appellant has neither been leased nor been given on hire network of foreign operator, then it cannot be said that the appellant has 'used' the network belonging to foreign operator. Therefore, reliance of the Assessing Officer on the said case law is misplaced. 11.5 It is seen from proposed Explanations 5 and 6 and Mem randum of explanation that the meaning of the word 'process' has been widened, the 'process' need not be secret and situs of control and possession of right, property or information has been rendered irrelevant. However, all these changes do not affect the definition of royalty as per the Double Taxation Avoidance Agreement. In article 13(3)(a) of the Indo-UK Tax Treaty, the word employed is 'use or right to use' in contradistinction to the word 'use' in domestic law. The meaning attached to the phrase 'use or right to use' has been explained in var ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng change in the definition of the term "royalty" in the DTAA between India and the USA. Accordingly, we are of the opinion that under the DTAA, the restricted meaning of the term royalty shall continue to operate despite the amendment in law. 10.17 As far as the assessee is concerned, in case of difference between provisions of the Act and an agreement under section 90 i.e. (DTAA), the provisions of the agreement shall prevail over the provisions of the Act. 10.18 In view of our discussion above, we hold that the payments made by the assessee are not in the nature of royalty either under the domestic law or relevant DTAA. 11. Further, in the case of the instant assessee, it has been argued by the learned counsel that even if it is assumed that the payment was in the nature of royalty after the retrospective amendment in the Act, the assessee cannot be held in default for not deducting tax on those payments. In support of the contention, the learned counsel has relied on the decision of the Delhi Bench of the Tribunal in the case of Business India Televisions International Limited v. Asst. CIT [2007] 11 SOT 486 (Delhi). We agree with the contention of the argument of l ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (Appeals) has alleged that the non-resident parties have rendered services of transmission of call beyond the Indian territory, which are technical services. We find that the Hon'ble Delhi High Court in the case of CIT v. Bharti Cellular Ltd. [2009] 319 ITR 139 (Delhi); [2008] 175 Taxman 573 (Delhi) as held that technical services must be rendered by human element and it does not include any service provided by machine or robots. The call connectivity and transmission services have been held as not involving human element by the Tribunal in the case of Bharti Airtel Ltd. v. ITO (TDS) (supra). In the instant case, the Revenue has not brought forwarded any evidences that human element was involved in call transmission services through dedicated bandwidth. The identical issue was before the Authority for Advance Rulings in the case of Cable and Wireless Networks India (P) Ltd., In re [2009] 315 ITR 72 (AAR) The facts of the case has been submitted by the learned counsel in his submission. The assessee-company proposed to enter into an agreement with M/s. Cable and Wireless, UK with a view to provide end-to-end international long distance telecommunication services to its Indian custom ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Delhi Bench has decided the identical issue of payment made for carrying calls from outside India and terminating such calls in India. The relevant part of the decision is reproduced as under (page 454) : "A perusal of the above extracted paragraphs leads to the following conclusions : 'The assessee, as part of its ILD telecom services business, is responsible for providing services to its subscribers in respect of calls originated/terminated outside India. Thus, for the provisions of ILD services, the assessee is required to obtain the services of FTOs for provision of carriage connectivity services over the last leg by the communication channel i.e. the lack of communication channel where the assessee does not have a licence/capacity to provide connectivity services. Thus, the ILD business is the provisions of connectivity to the subscribers for international portion of the call, which may or may not originate domestically. The local connectivity within India is provided by the access providers and the national long distance operators (NLD operators) and the International connectivity by the ILD operators interconnection with FTO, who provide the last mile connectiv ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t is sandwiched. A managerial service would be one which pertains to or has the characteristic of a manager. It is obvious that the expression "manager" and consequently "managerial service" has a definite human element attached to it. To put it bluntly, a machine cannot be a manager. The service of consultancy also necessarily entails human intervention. The consultant, who provides consultancy service, has to be a human being. A machine cannot be regarded as a consultant. From the above discussion, it is apparent that both the words "managerial" and "consultancy" involve a human element. And, both, managerial service and consultancy service, are provided by humans. Consequently, applying the rule of noscitur a sociis, the word "technical" as appearing in Explanation 2 to section 9(1)(vii) would also have to be construed as involving a human element. But, the facility provided by MTNL/other companies for interconnect/port access is one which is provided automatically by machines. It is independently provided by the use of technology and that too, sophisticated technology, but that does not mean that MTNL/other companies which provi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 9;technical service' would have reference to only technical service rendered by a human. • MTNL or other companies do not provide any assistance to the assessee in managing, operating, setting up their infrastructure and networks. • No doubt, such a facility is 'technical' in the sense that it involves sophisticated technology and may even be construed as 'communication service' but while interpreting the entire expression 'technical service', the individual meanings of the words 'technical' and 'service' have to be shed and only the meaning of the whole expression 'technical services' has to be seen. • The services rendered qua interconnection/port access do not involve any human interface and, therefore, the same cannot be regarded as 'technical services' as contemplated under section 194J.' The phraseology of fees for technical services covers only such technical services provided for fees. There should be a direct co-relation between the services which are on technical nature and the consideration received in lieu of rendering the services. The services can be said to be of technical nature i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... certain "capacity". On what basis such "capacity" is allotted and what happens if a situation arises where a service provider's "allotted capacity" gets exhausted and it wants, on an urgent basis, "additional capacity" ? Whether at that stage, any human intervention is involved is required to be examined, which again needs a technical data. We are only highlighting these facts to emphasise that these types of matters cannot be decided without any technical assistance available on record. There is one more aspect that requires to be gone into. It is the contention of respondent No. 1 herein that interconnect agreement between, let us say, M/s. Bharti Cellular Limited and BSNL in these cases is based on obligations and counter obligations, which is called a "revenue sharing contract". According to respondent No. 1, section194J of the Act is not attracted in the case of "revenue sharing contract". According to respondent No. 1, in such contracts there is only sharing of revenue and, therefore, payments by revenue sharing cannot constitute 'fees' under section 194J of the Act. This submission is not accepted by t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d 'technical services' have got to be read in the narrower sense by applying the rule of noscitur a sociis, particularly, because the words 'technical services' in section 9(1)(vii) read with Explanation 2 comes in between the words 'managerial and consultancy services'. Hence, there should be involvement/presence of human element for coming to a conclusion that 'technical services' can be said to have been rendered in terms of Explanation 2 to section 9(1)(vii) of the Act. In our view the Hon'ble Supreme Court of India has approved the proposition laid down by the Hon'ble High Court, that this is a service and that it would be FTS as defined under section 9(1)(vii) if there is human interference in such communication service. Hence the issue to be considered is narrow and based on evidence collected by the Revenue post the Hon'ble Supreme Court judgment. All other issues are no more res integra. This aspect as to whether a human element is involved in such interconnect services or not, has been examined by different Benches of the Tribunal based on the evidence collected by the Assessing Officer in the above stated set aside proceedings. The facts ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion of technical experts by the Assistant Commissioner of Income-tax TDS, New Delhi, in the case of Bharti Cellular Ltd.; thereafter cross-examination made by M/s. Bharti Cellular Ltd. also the opinion of the Hon'ble the then Chief Justice of India Mr. S. H. Kapadia dated September 3, 2013, and also various judgments given by the Income-tax Appellate Tribunal, Ahmedabad Bench, in the case of Canara Bank v. ITO [2008] 305 ITR (AT) 189 (Ahd) on MICR and the Pune Bench decision in iGate Computer Systems Ltd. v. Deputy CIT (TDS) [2015] 5 ITR (Trib)-OL 50 (Pune) on data link services. We find that for installation/setting up/repairing/servicing/maintenance capacity augmentation requires human intervention but after completing this process mere interconnection between the operators is automatic and does not require any human intervention. The term interconnecting user charges (IUC) also signifies charges for connecting two entities. The co-ordinate Bench also considered the Hon'ble Supreme Court decision in the case of CIT v. Bharti Cellular Ltd. [2011] 330 ITR 239 (SC) and in the case of iGate Computer Systems Ltd. and held that data link transfer does not require any human intervention ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ration for providing roaming services, human intervention is not required. Once human intervention is not required as found by the apex court, the service provided by the other service provider cannot be considered to be a technical service. It is common knowledge that, when one of the subscribers in the assessee's circle travels to the jurisdiction of another circle, the call gets connected automatically without any human intervention. It is due to configuration of software system in the respective service provider's place. In fact, the sub-divisional engineer of BSNL has explained as follows in response to question No. 23 : "Regarding roaming services as explained to question No. 21. Regarding interconnectivity, initial human intervention is required for establishing the physical connectivity and also for doing the required configuration. Once it is working fine, no intervention is required. In case of any faults human intervention is required for taking necessary corrective actions." In view of the above, once configuration was made, no human intervention is required for connecting roaming calls. The subscriber can make and receive calls, access and receive ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ndia in its order when the case was remanded to the Assessing Officer is to find out as to whether 'during traffic of calls, is there was any manual intervention ?'. There is no reference to the issues of set up, installation or operation maintenance or repair of network as explained by the learned Commissioner of Income-tax (Appeals). These decisions of the various Benches of the Income-tax Appellate Tribunal, when read with the judgment of the Hon'ble Delhi High Court as well as the Hon'ble Supreme Court, would settle this matter in favour of the assessee. But as a number of other decisions have been relied upon, we examine the same. The Hon'ble Madras High Court in the case of Skycell Communications Ltd. v. Deputy CIT [2001] 251 ITR 53 (Mad) has held that call charges received from the telecom operators from firms and companies subscribing to cellular mobile services provided by them do not come within the definition of technical services under section 194J read with section 9(1)(vii) Explanation 2, as it is a mere collection of fee for use of standard facility provided to all those willing to pay for it. Applying the proposition laid down in this case law to the facts ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of voice and for availing service of inter-communication, port access for which no human intervention was necessary-Payment cannot be characterised as "fee for technical services"-Thus, assessee cannot be held to be in default for non-deduction of tax at source from payment of telecommunication charges in terms of section 194J-Revenue's ground dismissed.' The Bangalore Income-tax Appellate Tribunal in the case of Wipro Ltd. v. ITO [2003] 80 TTJ (Bang) 191 held as follows : 'Income deemed to accrue or arise in India-Fees for technical services/royalty-Payment for transmission of data and software through uplink and downlink services-Assessee engaged, interalia, in the business of development of software providing online software services through customer based circuits with the help of VSNL and foreign telecom companies outside India-As per the agreements with such telecom companies assessee is to use the standard facility having standard pricing patterns-There is nothing to show that assessee was provided with any technology or technical services- Therefore, the amounts paid by the assessee-company to non-resident telecom companies for downlinking and tra ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rms of the judgment of the Hon'ble Karnataka High Court in the case of CIT v. De Beers India Minerals Pvt. Ltd. [2012] 346 ITR 467 (Karn) the payment cannot be treated as fees for technical services under the Double Taxation Avoidance Agreement as there is no imparting as contemplated in the Treaties. Similar are the propositions on the issue of 'make available' in the decisions in the case of Mahindra and Mahindra Ltd. v. Deputy CIT [2009] 313 ITR (AT) 263 (Mum) [SB]; Raymond Ltd. v. Deputy CIT [2003] 86 ITD 791 (Mumbai); Cable and Wireless Networks India P. Ltd., In re [2009] 315 ITR 72 (AAR)." 20. We find that in the DTAA between India and the USA the make available clause is in existence. Article 12(4) of the treaty is reproduced as under ([1991] 187 ITR (St.) 102, 116) : "For purposes of this article, 'fees for included services' means payments of any kind to any person in consideration for the rendering of any technical or consultancy services (including through the provision of services of technical or other personnel) if such services : (a) are ancillary and subsidiary to the application or enjoyment of the right, property or information for w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ax was deducted at source under section 195 of the Income-tax Act, 1961 before making such payments. 1.1 Upholding the action of the Assessing Officer in treating the payment of telecommunication charges, IPLC charges and connectivity charges as chargeable to tax in India under section 9(1)(vii) read with article 12(2) and 12(4) of the DTAA between the USA and India. 2. That all the above grounds and sub-grounds have to be read conjunctively and also independent of each other. 3. That the above ground(s) of appeal are to be considered separately and without prejudice to one another. 4. That the appellant-assessee craves, leave to add, alter, amend, substitute, withdraw or forgo any of the ground(s) of appeal before or at the time of hearing. 5. That the order of the learned Commissioner of Income-tax (Appeals) is bad in law and wrong on facts of the case and is in violation of the principles of natural justice without providing reasonable opportunity to the appellant-assessee to meet the merits of its case." 28. We find that the issues involved in the instant assessment year is identical to the issues involved in I.T.A. No. 1927/Del/2008, hence, accordingly, followi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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