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2016 (3) TMI 492 - ITAT DELHI

2016 (3) TMI 492 - ITAT DELHI - TMI - Additional evidences - relevancy of admission of additional evidences - determination of withholding tax under section 195 - DTAA - Held that:- We are of the consdiered view that the additional evidences i.e. Tax Residency Certificate issued by the tax authorities of USA certifying that GX Technology Corporation is resident of USA for the purposes of taxation and Certificate dated 31.1.2006 issued by GX Technologies Corporation certifying that it is resident .....

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963 and send back the issue in dispute to the file of the Assessing Officer for examination and verifying the aforesaid additional evidences and then decide the addition in dispute afresh, in accordance with law, after giving full opportunity to the assessee of being heard. - Decided in favour of assessee for statistical purposes. - I.T.A.No.500/Del/2013 - Dated:- 3-2-2016 - SHRI H.S. SIDHU, JUDICIAL MEMBER AND SHRI L.P. SAHU, ACCOUNTANT MEMBER For The Assessee : Sh. Ajay Vohra, Sr. Adv. and Ans .....

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A) erred in upholding the order of the AO and sustaining the disallowance under section 40(a)(i) with regards to payments of ₹ 90,504,600 made to MIs GX Technology Limited for the outright purchase of geological data. Ground No.2 That based on the facts and circumstances of the case, the Ld. CIT(A) erred in holding that the payments of ₹ 90,504,600 to MIs GX Technology Limited for outright purchase of geological data was subject to withholding tax under section 195 of the Act. Ground .....

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was not chargeable to tax in terms of the Double Taxation Avoidance Agreement between India and United States of America. Ground No.5 That based on the facts and circumstances of the case, the Ld. CIT(A) erred in denying natural justice to the appellant by not providing sufficient time to furnish the tax residency certificate of MIs GX Technology Limited. Your appellant prays that the erroneous order be cancelled and appropriate relief may be granted to the appellant. Your appellant craves leav .....

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f additional evidence in terms of Rule 29 of the Income Tax (Appellate Tribunal) Rules, 1963 in which the assessee has stated that the additional evidences filed by the Assessee may be accepted and the addition in dispute may be deleted. 4. On the contrary, Ld. D.R. Shri Anuj Arora, CIT(DR) opposed the admission of additional evidences filed by the assessee at this stage and stated that the additional evidences filed by the assessee are required thorough investigation at the level of the AO and .....

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cate issued by the tax authorities of USA certifying that GX Technology Corporation is resident of USA for the purposes of taxation and Certificate dated 31.1.2006 issued by GX Technologies Corporation certifying that it is resident of USA in terms of Article 4 of the India US Double Taxation Avoidance Agreement (DTAA) and does not have Permanent Establishment in India in terms of Article 5 of the DTAA. The contents of the Application filed by the Ld. Counsel of the Assessee for admission of add .....

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tion of Petroleum in the designated contract areas: a) Panna and Mukta Fields; b) Mid and South Tapti Gas Fields; The Applicant operates through a Joint Venture ("JV") arrangement with other contractors such as Oil and Natural Gas Corporation Limited ("ONGC") and Reliance Industries Limited ("RIL") for its share of participating interest. The Applicant had entered into a Master Geophysical Data-Use Licence Agreement dated 21.01.2006 with GX Technology Corporation (& .....

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applicant did not deduct tax at source under section 195 of the Income-tax Act, 1961 ('Act') on the aforesaid payments since such payments were not liable to tax in India as business income in absence of Permanent Establishment ('PE') of GX Corporation in India in terms of Article 5 read with Article 7 of the India- USA DTAA. During the course of assessment proceedings initiated for the assessment year 2006-07, the assessing officer directed the applicant to provide detail of mis .....

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expenses without appreciating that details had already been filed vide submission dated 16.12.2010. Aggrieved by the order dated 18.02.2011 passed by the assessing officer, the applicant filed appeal before the CIT(A), who, vide order dated 21.03.2011, disallowed the aforesaid expense of 90,504,600 by holding that the applicant had been to furnish Tax Residency Certificate (TRC') issued by the tax authorities of USA certifying that GX Technology was tax resident of USA. In order to rebut the .....

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of. The aforesaid evidence is crucial to rebut the allegations levelled by the CIT(A) and may kindly be admitted as additional evidence in terms of Rule 29 of the ITAT Rules for judicious disposal of the present appeal. The said evidence could not be filed earlier since the same was not requisitioned by the CIT (A), before deciding the issue against the appellant. Judicial Precedents: Reference, in this regard, may be made to the decision of the jurisdictional Delhi High Court in the case of CIT .....

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some inadvertent error or omission on the part of one of the parties to lead evidence. The relevant observations of the Court are reproduced hereunder: "13. The aforesaid case law clearly lays down a neat principle of law that discretion lies with the Tribunal to admit additional evidence in the interest of justice once the Tribunal affirms the opinion that doing so would be necessary for proper adjudication of the matter. This can be done even when application is filed by one of the partie .....

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evidence at the appropriate stage. Once it is found that the party intending to lead evidence before the Tribunal for the first time was prevented by sufficient cause to lead such an evidence and that. This evidence would have material bearing on the issue which needs to be decided by the Tribunal and ends of justice demand admission of such an evidence, the Tribunal can pass an order to that effect." (emphasis supplied) Kind attention is also invited to the decision of the Delhi High Court .....

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ter of record that before admitting the additional evidence, the CIT (A) had obtained remand report from the AG. While submitting his report, the A G had not objected to the admission of the additional evidence, but had merely reiterated the contentions in the assessment orders. It is only after considering the remand report, the CIT (A) had admitted the additional evidence. It cannot be disputed that this additional evidence was crucial to the disposal of the appeal and had a direct bearing on .....

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