TMI Blog2021 (6) TMI 328X X X X Extracts X X X X X X X X Extracts X X X X ..... ing a different view than in earlier and subsequent years. In such as situation in order to maintain the consistency, we hold that the receipts from BBMC Project to be taxed @ 10% of the receipt. We thus direct so. Taxation as royalty and fee for technical services @ 20% instead of 10% - HELD THAT:- As AR has pointed to the amendment made in Article 12(2) of the DTAA between India and Japan by Notification No S.O. 1136(E) dtd 19.7.2006 w.r.e.f 28.6.2006. As per the aforesaid amendment, the tax charged shall not exceed 10% of the gross amount of royalties or fees for technical services. Considering the submission of the Learned AR, we restore the issue to the file of the AO and direct him to compute the taxes on the aforesaid income in accordance with the applicable DTAA and in accordance with law. Needless to state that AO shall grant adequate opportunity of hearing to the assessee. Thus the ground of the assessee is allowed. Charging interest u/s 234-B - HELD THAT:- . It is an undisputed fact that assessee is a foreign company and it is the responsibility of payer to deduct entire tax at source on payments made to the Assessee. As n the case of GE Packaged Power Inc. [ 2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sessment order was passed u/s 144C(1) on 24.12.2009 proposing the assessment of total income at ₹ 9,78,84,110/-. On the receipt of draft order, assessee filed objections before the DRP. DRP vide order dated 30.09.2010 issued directions u/s 144C(5) of the Act. Consequent to the direction of DRP, AO passed order u/s 143(3) r.w.s. 144C(5) on 15.10.2010 assessing the total taxable income at ₹ 9,78,84,110/-. Aggrieved by the order of AO passed pursuant to the directions of DRP, assessee is now before us and has raised the following grounds: 1. That the order of learned Asstt. Director of Income Tax (ADIT) is bad both in law and on facts of the case; 2. That the Learned ADIT has erred in assessing the income of the assessee at ₹ 97,884,110/- as against the returned income of ₹ 16,151,304/-. 3. That the Learned ADIT has erred in merely following the order of the previous year without considering the provisions of law and facts of the case. 4. That the Learned ADIT has without appreciating the facts of the case erred in not following decision of Hon ble ITAT Delhi D Bench passed in case of the assessee for A.Y. 1980-81 to 1985-86, as well as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Learned ADIT has erred in taxing income received from Brakes India, Tata Motors Ltd, amounting to ₹ 1,36,23,485/- and installation supervisory charges received from Sumitomo Corporation amounting to ₹ 1,61,25,892/- eligible for taxation as royalty and fee for technical services @ 20% instead of 10%. 12. That the Learned ADIT has erred in charging interest u/s 234-B of the Income tax Act, provision of which are not attracted on the facts of the case; 13. That the learned ADIT has erred in initiating the penalty proceedings under Section 271(1)(c) of the Act, the provisions of which are not attracted on the facts of the case; 14. That the Learned ADIT has without appreciating the facts of the case erred in imposing penalty proceedings u/s 271(1)(b) of the IT Act. 15. That the appeal is within time as the assessee received the assessment order on 21.10.2010. 16. That the assessee may be allowed to add, alter, substitute, supplement, delete any of the grounds raised hereinabove. 4. Before us, at the outset, Learned AR submitted that Ground No.1, 2 13 to 16 are being general in nature therefore requires no adjudication. In view of the afo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... order passed by the AO in the draft assessment order to be as per the consistent stand of the Revenue in assessee s case for AY 2004-05 to 2006-07 and the matters were under litigation. The DRP thus upheld the order of the AO. AO thereafter in the final assessment order proceeded to tax the income received from BBMB project to be business income and taxed it at 40% plus surcharge. Aggrieved by the order of AO, the Assessee is now in appeal before us. 8. Before us, Learned AR submitted that in A.Y. 2006-07 in the order passed u/s 143(3) dated 19.12.2008, AO had in similar circumstances held the receipts from BBMB Projects to be taxable @ 40% + surcharge + education cess (the copy of the assessment order is placed at Page 21 to 41 and relevant action of AO at page 41 of the paper book). He submitted that against the order of AO assessee carried the matter before the CIT(A). CIT(A) in the order dtd 15.12.2010, estimated the profit from BBMB Project at 10% of the gross receipts (He pointed to the relevant order of CIT(A) which is placed at page 42 to 63 of the paper book). He submitted that the order of CIT(A) was not challenged by the Revenue meaning thereby that the order of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... resaid order of CIT(A) has attained finality as the order of CIT(A) has not been challenged by the Revenue. The aforesaid contention of the Learned AR has not been controverted by the Revenue by placing any material on record. We further find that in subsequent assessment years i.e. AY 2010-11, 2012-13, 2013-14 2014-15 the receipts from BBMB Project have been taxed by the Revenue @ 10% of the receipts. Before us, no distinguishing feature in the facts in the year under consideration and that of the earlier years and subsequent years has been pointed out by the Revenue nor has it placed any material to demonstrate the justification for taking a different view than in earlier and subsequent years. In such as situation in order to maintain the consistency, we hold that the receipts from BBMC Project to be taxed @ 10% of the receipt. We thus direct so. Thus the grounds of the assessee are allowed. 11. Ground No.11 is with respect to the taxation as royalty and fee for technical services @ 20% instead of 10%. 12. AO noted that assessee had received Royalty for technical services from Brakes India and from TATA Motors Ltd. amounting to ₹ 1,36,23,485/-. He also n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cted at source by the payers to the assessee and therefore assessee was not liable for any interest u/s 234-B of the Act. In support of the aforesaid contention, he relied on the decision rendered by Hon ble Delhi High Court in the case of Director of Income Tax (International Transaction) vs. GE Packaged Power Inc. reported in (2015) 373 ITR 65 (Del). Learned AR therefore submitted that interest levied u/s 234-B be directed to be deleted. 18. Learned DR on the other hand supported the order of lower authorities and further submitted that against the order of Hon ble Delhi High Court in the case of Ge Packaged Power Inc. (supra), which has been relied upon by the Ld AR, the matter was pending before the Supreme Court. 19. We have heard the rival submissions and perused the materials available on record. The issue in the present ground is with respect to chargeability of interest u/s 234B of the Act. It is an undisputed fact that assessee is a foreign company and it is the responsibility of payer to deduct entire tax at source on payments made to the Assessee. We find that Hon ble Delhi High Court in the case of GE Packaged Power Inc. (supra) has held that when the assessee wa ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
