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TMI Blog2022 (1) TMI 179X X X X Extracts X X X X X X X X Extracts X X X X ..... ntant Member And Shri Kul Bharat, Judicial Member For the Appellant : None For the Respondent : Sh. T. Kipgen, CIT DR ORDER PER KUL BHARAT, JM : This appeal by the assessee is directed against the order of the Ld. CIT(A)- 25, dated 26/5/2017 pertaining to Assessment Year 2007-08. The assessee has raised following grounds of appeal:- 1. On the facts and in the circumstances of the case and in law, the penalty order passed by the learned Assessing Officer is bad in law and facts. 2. On the facts and in the circumstances of the case and in law, the learned Assessing Officer has erred in levying penalty under Section 271 (1)(c) of the Act without appreciating the view of the Appellant that the said payments a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ank guarantee commission. The learned Assessing Officer should have appreciated the fact that the Appellant has deducted TDS appropriately on all other payments and it was of the view that TDS is not applicable on bank guarantee commission and the learned CIT(A) has erred in confirming the same. The Appellant prays that each of the above grounds be considered discretely and without prejudice to each other. 2. At the time of hearing, no one appeared on behalf of the assessee. It is seen that neither the assessee nor his counsel appeared on various dates. The notice of hearing was sent to the assessee and was returned by the postal authority with remark Addressee is left . 3. Under these facts, the appeal was taken up for hearin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aw, the learned Assessing Officer has erred in levying penalty under Section 271(1 )(c) of the Act without appreciating the view of the Appellant that the said payments are not liable to TDS under Section 194C/195 of the Act. 1.1. Bank guarantee commission paid to M/s BEL: 1.1.1. The learned AO had concluded that TDS is applicable on the bank guarantee commission paid to BEL under Section 194C of the Act as there was a contractual arrangement to provide bank guarantees in the joint venture ( JV ) agreement. A copy of the JV agreement is enclosed in page number 1 to 6 of paper book. 1.1.2. In this regard, we wish to submit that, any payment to be liable under Section 194C of the Act, the contract entered into by the parties sh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of work will be covered which is not the intention of the legislature. A case of an arrangement under which both sides have joined together by mutual arrangement and to share the profits of the joint enterprise carried on by them is not covered by the definition. They mutually undertake the profit making activity with a stipulation to divide the gains of their collective efforts. The work is undertaken jointly by them for a consideration which is shared. Parties do not work for each other. 1.1.5. We would like to draw your attention to the Hyderabad ITAT ruling in the case of Hindustan Ratna [ITA No. 372/HYD/2013] (a copy of the said ruling is enclosed in page number 43 to 54 of paper book), wherein the Honourable ITAT had held that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... .5 Bank guarantee commission does not fall under the definition of interest as per Article 11- Interest of the Indo-Malaysian Tax Treaty. Hence, the said payment is not liable to tax in India as per Indo- Malaysian Tax Treaty. 1.2.6 Therefore, the payment made by the Appellant to PATl Sendirian Berhadis not liable to tax under Section 195 of the Act and hence we request your good self to delete the penalty imposed under Section 271(l)(c) of the Act. 1.2.7 The learned AO in his order relying on the Karnataka High ruling in the case of Samsung Electronics had concluded that as per Section 195(2) of the Act, it is necessary for the Appellant ' to approach the Assessing Officer if he considers that the payment is not subject to ..... X X X X Extracts X X X X X X X X Extracts X X X X
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