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2018 (2) TMI 1356 - AT - Income TaxRevision u/s 263 - taxabilty of sum received by the assessee for services rendered outside India - AO accepted without any verification, the claim of the assessee that payment received was not taxable in India - P.E. in India - Held that:- along with the computation of total income, as annexure to the computation/statement of income the assessee has given the details of nature of payment, invoice no., invoice date, gross fees and tax both in US$ and Indian rupee. In all there were 93 payments. These details are available at pages 96 to 108 of the assessee’s paper book. These documents had been filed by the assessee along with the computation of total income. It is not in dispute that these documents was available before the AO when he completed the assessment. The AO in the notice u/s 142(1) dated 16.10.2012 has also called for Audited accounts and balance sheet as on 31.10.2010, report of audit u/s 44AB of the Act. As we have already observed in a letter dated 21.06.2012 the assessee has clearly taken a stand regarding non taxability of fees received for services rendered outside India. AO has made due enquiries with regard to non taxability of receipts by the assessee for services rendered outside India and applicability of Article 15 of DTAA. The CIT in the impugned order was of the view that the AO ought to have called for the copy of the contract between the assessee and the person to whom the assessee rendered services from USA and also to verify where payments were made to the related parties and also examine the nature of services. In our view this is nothing but a fishing and roving enquiry which is not permitted in exercise of jurisdiction u/s 263 of the Act. The exercise of jurisdiction u/s 263 of the Act in this regard is therefore held to be not sustainable. Services rendered in India, it is not disputed that this was offered to tax by the assessee and brought to tax by the AO. Therefore there cannot be any loss of revenue in this regard. We therefore hold that the exercise of jurisdiction in respect of receipts for services rendered in India and the direction of CIT as given in Paragraph 3.6(ii) of his order to examine the contract of the parties is not sustainable and is hereby quashed. International transaction between the assessee and the associated enterprises - non filing of Form No.3CEB - CIT surmised that there could be some more international transactions with AE and the report disclosing only one international transaction may not be correct. In our view the CIT on perusal of Form 3CEB has not drawn any adverse inference. He however directed the AO to examine certain other payments to parties having similar name as that of the assessee. We fail to see as to how such vague reasons jurisdiction u/s 263 of the Act could be exercised. The jurisdiction u/s 263 can be exercised only on a definite finding that the order of the AO was erroneous and prejudicial to the interest of the revenue. Such a finding with regard to Form 3CEB in respect international transaction with associated enterprises has not been spelt out - Decided in favour of assessee
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