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TMI Blog2023 (11) TMI 33X X X X Extracts X X X X X X X X Extracts X X X X ..... st classify under article of Business income. In absence of permanent Establishment, it cannot be taxed in source country [India]. Therefore it goes out of the residuary article of Other income . Revenue could not point out that those entities income is not business income. Revenue also could not show that why those decisions do not apply to the facts of the case of the assessee wherein the identical jurisdiction and identical services are involved. Disallowance of contribution and reimbursement of expenses paid by the assessee to KPMG International cooperative, Switzerland without deduction of tax at source - HELD THAT:- As the coordinate bench in assessee s own case for assessment year 2001 02 [ 2017 (4) TMI 869 - ITAT MUMBAI] has already held that contribution paid by the assessee to KPMG cooperative, Switzerland is covered by Mutuality concept i.e. mutual Association on its receipts would not constitute income chargeable to tax. The learned departmental representative could not controvert the above decision of the coordinate bench in assessee s own case, therefore disallowance for non-deduction of tax at source is correctly deleted. Revenue appeal dismissed. - ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that the KPMG cooperative sigil and is a mutual Association and its receipts would not constitute income chargeable to tax and is not obliged to be told any tax without appreciating the facts, thereby deleting the disallowance of ₹ 434,019,511/ under section 40 (a) (i) vi. on the facts and in the circumstances of the case and in law, the whether the learned CIT A order in holding that the payments made by the assessee to KPMG for names, Mark and other facilities where in the nature of royalty and chargeability to tax in India. 03. Brief facts shows that assessee is carrying on the profession of business advisory, taxation and audit related services. It filed its return of income on 30/11/2018 at total income of ₹ 68,12,04,660/ and intimation under section 143 (1) was made at Rs. 681,346,470/ . It culminated into the assessment order passed under section 143 (3) read with section 144B of The Income Tax Act [the Act] at total income at RS 119,52,81,570/ . 04. There are only two issues involved in this appeal. (1) disallowance of claim of professional fees paid to the various consultants outside India on which no taxes deducted at source amounting to ₹ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fficer held that those services fall under the ambit of article 22/23 of the Double Taxation Avoidance Agreement such as other income on income not expressly mentioned and therefore taxes required to be deducted at source on that. As assessee has failed to deduct tax at source is disallowed the same. f. On appeal before the learned CIT A noted in paragraph number [8] of his order at page number 56 that each of the entities covered in the above payment at serial number 1 to 16 is covered in favour of the appellant, all the relevant decision pointed out discussed in paragraph number [3] and therefore the appellant gets relief in respect of this disallowance. g. Further with respect to the 5 entities he held that the issue squarely covered in favour of the assessee by the decision of the coordinate bench in case of BSR and Co LLP for assessment year 2015 16 and 2017 18 as the payments are similar. The sixth payment was with respect to the foreign exchange fluctuation on the above payment and therefore identical treatment was given by deleting the same. h. With respect to the payment made to KPMG auditors consultants is based out of Mozambique where the payment is of & ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lowing that order of ITAT. It covered the issue. He referred to the decision of the coordinate bench in assessee s own case for assessment year 2001 02 in para number 5.15 and 5.16 wherein it has been held that the KPMG and the assessee is having a relationship of mutual Association and its member respectively and no element of income was embedded in the remittances received by the foreign entity. 07. Therefore, the learned assessing officer is in appeal before us. The learned departmental representative imminently supported the order of the learned assessing officer. 08. The learned authorized representative submitted that ground number 1 4 of the appeal are covered in favour of the assessee by the decision of the BRS and associates LLP Limited and further ground number five ground number six are covered in favour of the assessee by the decision of the coordinate bench in assessee s own case for assessment year 2001 02. Therefore, all these issues are covered in favour of the assessee. He referred to the decision of the honourable Bombay High Court in CIT versus KPMG in ITA number 690 of 2017 dated 24 September 2019 wherein the appeal related to assessment year 2008 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 11. The learned departmental representative reiterated the submission that the taxes required to be deducted at source on these payments. 12. We have carefully considered the rival contention and perused the orders of the lower authorities. We find that ground number 1 4 of the appeal of learned assessing officer is with respect to the deduction of tax at source on professional fees paid to various outside consultants outside India amounting to ₹ 79,915,590/ on which the tax has not been deducted by the assessee and therefore same has been disallowed. While deciding the issue the learned CIT A has referred to the several judicial precedent of BSR and Co LLP on identical issue wherein it has been held that no tax is required to be deducted at source on various payments to the foreign consultant because of the reason that the services do not make available those services to the assessee. Wherever the Double Taxation Avoidance Agreement did not contain the article of Fees For Technical Services, we are of the opinion that it cannot go to the article of other income only because of the reason that FTS article is not there in the Double Taxation Avoidance Agreement. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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