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TMI Blog2018 (12) TMI 752X X X X Extracts X X X X X X X X Extracts X X X X ..... nuineness was upon assessee and the same, on factual matrix has remained un-discharged to a great extent. Since the revenue has agitated the relief provided by Ld. CIT(A) in violation of Rule-46A, we deem it proper to set aside the findings of appellate authority and restore the matter back to the file of Ld. AO for readjudication as per law. The assessee is directed to substantiate its stand with requisite documentary evidences and demonstrate the fulfillment of primary ingredients of Section 68. The allowance of interest payment is consequential in nature which would be adjudicated as per the stand taken by revenue against loan creditors. Resultantly, the grounds urged by revenue as well as by assessee, in this regard, stands allowed for statistical purposes. Quantum addition u/s 40A(3) - CIT-A deleted the addition - Held that:- Not a valid ground to delete the addition without verification of factual matrix. The complete onus to substantiate the arguments advanced by the assessee rested upon him and Ld. CIT(A) erred in shifting the onus of the same on Ld. AO. Therefore, the matter stands remitted back to the file of Ld. AO for verification of submissions made by the assessee bef ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... S on payment for training fees, royalty and survey fees ignoring the decision of Hon'ble ITAT, Mumbai in the case of satellite Television Asia Region Ltd. vs. DCIT (2006) 99 ITD 914 (MUM),which holds that section 195 of the IT Act lays emphasis on chargeability rather than source of payment." 2. On the facts and in the circumstances of the case and in law, the Ld.CIT(A) has erred in deleting the addition of ₹ 2,34,75,000/- out of total addition of ₹ 2,56,75,000/- made u/s 68 and corresponding interest of ₹ 73,725/- out of total interest of ₹ 10,60,900/- by accepting the fresh evidences in contravention of Rule 46A and directing AO to collect evidences directly from the lenders without appreciating the fact that sufficient opportunity was given during assessment proceedings and the loan confirmations produced by the assessee during the course of assessment proceedings before the AO were having various fundamental omission/ mistakes such as incomplete address and without PA /signature of the lenders and the assessee in spite of sufficient opportunities failed to rectify the same and establish the genuineness loans and credit worthiness of the loane ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... statutory provisions of Section 5 & Section 9, and after relying upon the decision of Mumbai Tribunal in the case of Satellite Television Asia Region Ltd Vs. DCIT concluded that the aforesaid income accrued / arose in India and therefore, required deduction of tax at source. Finally, not convinced with assessee's explanation, Training fees of ₹ 24.52 Lacs, Survey fees to the extent of ₹ 6.53 Lacs and Royalty Payments of ₹ 27.13 Lacs aggregating in all to ₹ 52.20 Lacs were disallowed and added to the income of the assessee. 2.2 The second addition of cash credit u/s 68 stem from the fact that the assessee obtained unsecured loans of ₹ 256.75 Lacs from as many as 106 parties and submitted partial documentary evidences to prove the identity, genuineness and creditworthiness of the same as required by law. The complete detail of these loans and documentary evidences submitted by the assessee to substantiate the same has been extracted in para-6.4 of the quantum assessment order. A perusal of the same reveal that although the assessee had provided addresses and Permanent Account Number of most of the lenders, however, loan confirmations, financial statemen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... certificate was to be obtained regarding the validity which was to be purchased from the manufacturers at a cost. Therefore, the purchase of certificate was not in the nature of fees for technical or professional services in terms of Section 9(1)(vii) and the constitute business income for the foreign supplier, not taxable in India. It was also pointed out that even otherwise the payment to each supplier, being less than threshold limit of ₹ 20,000/- as prescribed by Section 194J, did not require deduction of tax at source. The Ld. CIT(A), relying upon the stand of its predecessor in assessee's own case for AY 2008-09, deleted the additions on account of royalty payments and training fees paid by the assessee. However, regarding survey fees, it was noted that the assessee took different stand by initially submitting that the payment to each supplier was less than ₹ 20,000/- but later on claimed that the aforesaid payment were made to Government and Local Authorities and therefore, tax was not required to be deducted against the same. Therefore, Ld. CIT(A), rejecting the stand of assessee, confirmed the addition of ₹ 6.23 Lacs on account of survey fees. 3.2 Again ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . The assessee is aggrieved by confirmation of addition against cash credit and corresponding interest on those cash credit and addition on account of survey fees whereas the revenue is aggrieved by relief provided by first appellate authority against various quantum additions as made by Ld. AO. 4.1 We have heard the rival contentions and perused relevant material on record. So far as the addition on account of Training Fee & Royalty payment is concerned, both the representatives converge on the point that the issue was recurring in nature and the same has already been adjudicated in assessee's favor by the Tribunal for other AYs, the details of which could be tabulated in the following manner:- No. ITA No. Order Dated AY 1. ITA No. 1047/Mum/2013 10/02/2016 2008-09 2. ITA No. 14/Mum/2015 24/11/2016 2010-11 3. ITA No. 5001/Mum/2016 14/05/2018 2012-13 The copies of the aforesaid orders have been placed on record. All these orders are subsequent to the impugned order. Upon perusal, we find that the order for 2012-13 relies upon the orders for AY 2008-09 & 2010-11 whereas the order for 2010-11 relies upon the order for 2008-09. The grounds raised by revenu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ady noted that the complete onus to prove the fulfillment of primary ingredients of Section 68 viz. identity, creditworthiness and genuineness was upon assessee and the same, on factual matrix has remained un-discharged to a great extent. Since the revenue has agitated the relief provided by Ld. CIT(A) in violation of Rule-46A, we deem it proper to set aside the findings of appellate authority and restore the matter back to the file of Ld. AO for readjudication as per law. The assessee is directed to substantiate its stand with requisite documentary evidences and demonstrate the fulfillment of primary ingredients of Section 68. The allowance of interest payment is consequential in nature which would be adjudicated as per the stand taken by revenue against loan creditors. Resultantly, the grounds urged by revenue as well as by assessee, in this regard, stands allowed for statistical purposes. 4.3 Regarding quantum addition u/s 40A(3), we find that the same has, prima facie, been deleted in view of the fact the Ld. AO failed to call for further information from the assessee. However, the same, in our opinion, was not a valid ground to delete the addition without verification of fact ..... X X X X Extracts X X X X X X X X Extracts X X X X
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