9911796707
TMI Blog2020 (10) TMI 1188X X X X Extracts X X X X X X X X Extracts X X X X ..... d by Dispute Resolution Panel - I ('DRP'), Mumbai, dated 04 September 2018 on the following grounds which are independent and without prejudice to each other: On the facts and in the circumstances of the case and in law, the learned DRP and the learned AO has - Ground number 1 erred in determining the total income of the Appellant at Rs. 5,89,84,812 instead of 'Nil' income as declared by the appellant in the return of income; Ground number 2 erred in holding the amounts received by the Appellant from Tata Communications Limited ('TCL') [earlier known as Videsh Sanchar Nigam Limited] to be 'Royalty' as defined under Section 9(1)(vi) of the Act as well as under Article 13(3)(a) of the Double Taxation Avoidance Agreement between India and United Kingdom ('India-UK Tax Treaty'); Ground number 3 erred in not following the decision of the jurisdictional Mumbai Tribunal in the Appellant's own case for previous Assessment Years 2000-01 to AY 2005-06 (ITA No. 5102/M/2004, 423/M/2005, 7555/M/2005, 3426/M/2007, 2583/M/2007 and 3213/M/2008) considering the facts in the instant previous year are similar to the facts of the previous years ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... und number 11 The learned AO has erred in levying interest amounting to Rs. 1,47,546 under Section 234B of the Act: Ground number 12 The learned AO has erred in initiating penalty proceedings under Section 271 (1)(c) of the Act. The Appellant craves leave to add, alter, omit or substitute any or all of the above grounds of appeal, at any time before or at the time of the appeal, to enable the Hon'ble ITAT to decide the appeal in accordance with law." 2. Briefly stated, the assessee which is a company incorporated and registered under the laws of United Kingdom (for short "U.K") is engaged in the business of providing telecommunication services and leasing of space segment capacity of navigational transponder. The assessee is a tax resident of U.K. for the purpose of the India-U.K. tax treaty. Return of income declaring a total income of Rs.nil for A.Y. 2014-15 was filed by the assessee on 30.09.2015. Subsequently, the case of the assessee was selected for scrutiny assessment under Sec. 143(2) of the Act. 3. During the course of the assessment proceedings it was observed by the A.O that the assessee was engaged in the business of providing telecommunication services an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the Income Tax Rules, 1962 and estimated the business profit of the assessee at 30% of its gross receipts of Rs. 5,89,84,812/-, which worked out to an amount of Rs. 1,76,95,444/-. It was observed by the A.O that if the assessee's income was subsequently held as not being in the nature of royalty, then its business income would be worked out in terms of his aforesaid observations. Accordingly, in the backdrop of his deliberations the A.O proposed to assess the total receipts of Rs. 5,89,84,812/- as royalty in the hands of the assessee, which was subjected to tax by him @ 10% under the India-U.K. tax treaty, vide his draft assessment order passed under Sec.143(3) r.w.s 144C(1), dated 21.12.2017. 4. Objecting to the aforesaid draft assessment order the assessee filed objections with the Dispute Resolution Panel-1 (WZ), Mumbai. The assessee objected to the proposed treatment of the amounts received by the assessee from TCL as royalty under Sec.9(1)(vi) of the Act and Article 13 of the India-U.K. tax treaty. It was submitted by the assessee that the Tribunal while disposing off its appeals for A.Y. 2000-01 to A.Y. 2005-06, vide its consolidated order dated 14.07.2017, had conclude ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... treated as royalty was concerned, the DRP simply relied upon the view that was taken by the predecessor panel in context of the issue under consideration in the preceding years i.e A.Y. 2010-11, A.Y. 2011-12, A.Y. 2013-14 and A.Y. 2014-15 and therein held that the aforesaid amounts received by the assessee from TCL were taxable in India being receipts in the nature of royalty both in terms of the Income-Tax Act as well as the India-U.K. tax treaty. Accordingly, the DRP observing that its predecessor panel had in the earlier years upheld the AO's view and had concluded that the amounts received by the assessee from TCL were to be treated as royalty, thus, for the said reason rejected the aforesaid claim of the assessee. As regards the claim of the assessee that it did not have a PE in India, the same too did not find favour with the DRP. Observing, that its predecessor panel in A.Y. 2014-15 had upheld the view taken by the A.O that the assessee had a PE in India, it was concluded by the DRP that the activities carried on the land through Land Earth Stations (LES) constituted a PE of the assessee in India. Accordingly, the assessee's claim that it had no PE in India was rejected by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... subjected the same to tax @ 10% under the India-U.K. tax treaty. Alternatively, it was observed by the AO, that as in the preceding years, as no details of expenditure was either available on record nor provided by the assessee, thus, the business income/profit of the assessee was to be worked out on an estimate basis at 30% of its gross receipts of Rs. 5,89,84,812/-, which amounted to Rs. 1,76,95,444/- by invoking Rule 10 of the Income Tax Rules, 1962. It was observed by the A.O that his latter part of the order i.e assessing of the business income/profits of the assessee would be triggered if the assessee's income was held as business income and not royalty. 7. The assessee being aggrieved with the order passed by the A.O under Sec. 143(3) r.w.s 144C(13), dated 25.09.2018, has carried the matter in appeal before us. The assessee has assailed the assessment framed by the A.O inter alia on three issues viz. (i) that the amounts received by the assessee from TCL were not to be held as 'royalty' under Sec. 9(1)(vi) of the Act and Article 13(3)(a) of the India-U.K. Tax Treaty; (ii) that the AO/DRP had erred in concluding that the Liaison Office (LO) and the Land Earth Station (LES) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... while disposing off the assessee's appeals for A.Y. 2000-01 to A.Y. 2005-06, and vide its order dated 14.07.2017 had observed as under : "5. In order to appreciate the controversy, the following discussion is relevant. The appellant is a company incorporated in United Kingdom and is also a tax resident of United Kingdom. The appellant is engaged in the business of providing telecommunication services and for Assessment Year 2007-08, it filed its return of income declaring NIL income, inter-alia, contending that its income was not taxable in India. So far as the income earned by the assessee in this year is concerned, the same stands on similar footing as in the past years, namely, from rendering of telecommunication services to Videsh Sanchar Nigam Ltd. (in short 'VSNL'), whose name has subsequently been changed to Tata Communication Ltd. (in short 'TCL'). The receipts from rendering of telecommunication services to TCL were claimed to be not taxable in India; however, the Assessing Officer has taxed the same as Royalty under the Act as well as in terms of the India-UK Double Taxation Avoidance Agreement (in short 'India-UK DTAA'). The stand of the assessee has been that its ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 12 April 1999, entered into by Inmarsat with VSNL for provision of telecommunication services. The LES is linked on the ground to the local public telecommunication network. This system enables communication to take place between users of the MES equipment and either other users of similar equipment or users of the public telephone network. In each case, the communication passes via an Inmarsat satellite and is co-ordinated and connected by the LESO." 6. The Assessing Officer, however, took the stand, following the stand of the assessing authorities of the past years that the impugned receipts earned by the assessee from TCL are in the nature of 'Royalty'. We find that the DRP has also affirmed the decision of the Assessing Officer. 7. On this aspect of the royalty issue controversy, it has been pointed out before us that the Tribunal vide its order in ITA Nos. 5102/Mum/2004 & others dated 14.07.2017 in the context of Assessment Years 2000-01 to 2005-06 has evaluated the rival stands and have disagreed with the stand of the Revenue that the nature of receipt was Royalty. At the time of hearing, the learned representative for the assessee has taken us through the detailed de ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... os. 7299 & 7300/ Mum/2010 for A.Y. 2005-06 and 2007-08, DDIT vs. Shell Information Technology International BV dated 15.03.2017 in ITA No. 5051/Mum/ 2009 & Others for A.Y. 2006-07 to 2008-09 and ADIT vs. Taj TV Ltd. dated 05.07.2016 in ITA No. 4678/Mum2007 for A.Y. 2003-04 to 2005-06. We have also noted that reliance placed by the learned CIT-DR on the decision of the Hon'ble Jurisdictional High Court in Siemens Aktiongeswellschaft (supra) supports its case is misplaced. Specific mention may be made to para 20 of the said decision. Reference therein has been made to a decision of the Canadian Court in the case of Her Majesty the Queen vs. Melford Development Inc. 82 DTC 6281 and the categoric observation on unilateral amendment by a nation which is party to the agreement leaves the issue in no doubt about the view favoured. Accordingly we quote here the decision of the Hon'ble Delhi High Court in DIT vs. New Skies Satellite BV cited supra to support the conclusion why the consistent orders of the ITAT on the issue are being followed: - "48. In Commissioner of Income Tax v. Seimens Aktiongessellschaft, [2009] 310 ITR 320 (Bom), the Bombay High Court citing R v. Melford Dev ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... does exist a definition of a term within the DTAA. When that is the case, there is no need to refer to the laws in force in the Contracting States, especially to deduce the meaning of the definition under the DTAA and the ultimate taxability of the income under the agreement. That is not to say that the Court may be inconsistent in its interpretation of similar definitions. What that does imply however, is that just because there is a domestic definition similar to the one under the DTAA, amendments to the domestic law, in an attempt to contour, restrict or expand the definition under its statute, cannot extend to the definition under the DTAA. In other words, the domestic law remains static for the purposes of the DTAA. The Court in Sanofi (supra), had also held similarly: "We are in agreement with the petitioners and in the light of our preceding analyses, discern no textual, grammatical or syntactic ambiguity in Article 14(5), warranting an interpretive recourse. In the circumstances, invoking provisions of Article 3(2) by an artificial insemination of ambiguity (to accommodate an expanded meaning to the DTAA provision), would be contrary to good faith interpretation. A furthe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , is not equipped, with the power to amend a treaty. It is certainly true that law laid down by the Parliament in our domestic context, even if it were in violation of treaty principles, is to be given effect to; but where the State unilaterally seeks to amend a treaty through its legislature, the situation becomes one quite different from when it breaches the treaty. In the latter case, while internationally condemnable, the State's power to breach very much exists; Courts in India have no jurisdiction in the matter, because in the absence of enactment through appropriate legislation in accordance with Article 253 of the Constitution, courts do not possess any power to pronounce on the power of the State to enact a law contrary to its treaty obligations. The domestic courts, in other words, are not empowered to legally strike down such action, as they cannot dictate the executive action of the State in the context of an international treaty, unless of course, the Constitution enables them to. That being said, the amendment to a treaty is not on the same footing. The Parliament is simply not equipped with the power to, through domestic law, change the terms of a treaty. A treaty ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Taxation) for the proposition that the decision of the Hon'ble Delhi High Court in the case of Asia Satellite Communication Co. Ltd. and New Skies Satellite is overruled. On a reading of the said decision we note that the reliance is misplaced. The issue for consideration before the Hon'ble Apex Court was on an entirely different set of facts and circumstances and an entirely different issue was being considered. The said decisions were neither cited before the Court nor referred to by it nor considered in the said judgement. Accordingly on a reading of the decisions rendered on peculiar facts of the present case which we have brought out in detail in the earlier part of this order we find ourselves in agreement with the detailed finding and conclusion drawn by the Coordinate Benches and respectfully following the same conclude that the appeals of the assessee are to be allowed. For ready reference we extract from one of the decisions cited before us. We reproduce the relevant extract from the decision in the case of Alcatel Lucent USA Inc. being the most latest in point of time hereunder: - "5. We have heard the rival submissions and perused the material before us. We ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... submitted that other decisions rendered by the Delhi High Court and the Tribunal may not be applicable. While appreciating the Siemens AG (supra) he submitted that, it may kind be borne in mind that: i) The question of law before the Hon'ble High Court was not that whether amendments in the Income-tax Act can be read into the DTAA or not; ii) In the said case, old DTAA (1960) between India and Germany was under consideration; iii) The said decision was rendered in 20008 when the only clarificatory provision by way of Explanation in section 9 was the Explanation below S.9(2) inserted by the Finance Act, 2007 doing with the requirement of PE for Royalty; iv) That amendments/Explanations in the Incometax Act are being sought to be read into DTAA by virtue of Article 3(12) of the modern treaties; v)Section 9(1)(vi) up to and including Explanation 2 are substantive provisions as inserted by Finance Act 1976 and thereafter, Explanation 3 to 6 are only clarificatory provisions inserted subsequently; and vi) It is not disputed by the revenue that the provisions of DTAA if beneficial to the assessee shall be preferred over the provisions of the Income-tax Act. He further submitted that, th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t years 2003-04 to 2004-05, 2005-06 and 2008-09. The Tribunal in the assessment year 2004-05 in ITA No.7347/Mum/2007 on the issue of disallowance of Data Processing Cost has dealt and decided this issue in the following manner:- "15. Now, coming to the main issue i.e., whether the reimbursement of data processing cost of Rs. 34,03,734, amounts to royalty or not, we find from the record that the assessee is engaged in the banking business and operates in India through branch in Mumbai. It has acquired banking application software named as "Flexcube" from an Indian software company which is exclusively used for the banking purpose by the assessee all over the world. When the Mumbai Branch was set-up, the Branch was allowed to use the said software by making it assessable through servers located at Belgium. The Branch sends its data to the Belgium server from where the data gets processed as per the requirement of the banking operations. As per the terms of agreement between the Branch and the Head Office for the usage of software by the Branch, which has been incorporated above, it is evident that the Head Office only has the non-exclusive non-transferrable rights to use the comput ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s not for "use" of or "right to use" of software which is being exclusively done by the Head Office only, installed in Belgium. The Branch does not have any independent right to use or control over such main frame of the computer software installed in Belgium, but it simply sends the data to the Head Office for getting it processed. Insofar as the Branch is concerned, it is only reimbursing the cost of processing of such data to the Head Office, which has been allocated on prorata basis. Such reimbursement of payment does not fall within the ambit of definition of "royalty" within the Article 12(3)(a). To fall within its ambit, the Branch should have exclusive and independent use or right to use the software and for such usage, payment has to be made in consideration thereof. It is not the case of the Revenue that the Head Office has provided any copy right of software or any copyrighted article developed by the Head Office for the exclusive use of the assessee for, which the assessee is making the payment along with the mark-up exclusively for the purpose of royalty. If the payment for license for the software which is installed in the Head Office is being made by the Head Office, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... refore, in essence the impugned payment is made to the Australian company inconsideration of its processing of data belonging to the Indian company. As far as the scope of article 12(3)(a) is concerned, we find that it covers only a payment for the use of, or the right to use of, any copyright, patent, design or model, plan, secret formula or process, trademark, or other like property or right. The case of the revenue is that the payment is made for the use of specialized software with the help of which data is processed. We are not persuaded. As we have concluded earlier in this order, on the facts of this case, the payment made by the Indian company is not for the use of, or right to use of, software, the payment is for data processing. Be that as it may, even if stand of the revenue is to be upheld and it is to be concluded that the payment is made for software per se, that does not lead to taxability of receipt in the hands of the Australian company either. It is also by now settled that the payment for software is for a copyrighted article and not copyright per se, and, therefore, is not covered by the scope of payment for copyright. The authority for this proposition is conta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... but what is important to bear in mind is the fact that the payment is not for the use of mainframe computer per se, that the Indian company does not have any control over the mainframe computer or physical access to the mainframe computer, and that the payment is for act of specialized data processing by the Australian company. Use of mainframe computer in the course of processing of data is one of the important aspects of the whole activity but that is not the purpose of, and consideration for, the impugned payment being made to Australian company. The payment, as we have observed earlier, is for the activity of specialized data processing. It is neither practicable, nor permissible, to assign monetary value to each of the segment of this economic activity and consider that amount in isolation, for the purpose of deciding character of that amount. Therefore, neither the impugned payment can be said to be towards use of, or right to use of, the mainframe computer, nor is it permissible to allocate apart of the impugned payment, as attributable to use of, or right to use of, mainframe computer. Accordingly, the provisions of article 12(3)(b) cannot have any application in the mat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in the latest decision of Hon'ble Delhi High Court in the case of DIT vs. News Sky Satellite BV passed in ITA 473/2012, order dated 8.02.2016 have explained the ratio and principle of Hon'ble Bombay High Court in the case of Siemens Aktiongesellschaft (supra). The relevant observation of the Hon'ble Delhi High Court in the said case reads as under:- "48 In Commissioner of Income Tax v. Seimens Aktiongessellschaft, [2009] 310 ITR 320 (Bom), the Bombay High Court citing R v. Melford Developments Inc. held that "The ratio of the judgment, in our opinion, would mean that by a unilateral amendment it is not possible for one nation which is party to an agreement to tax income which otherwise was not subject to tax. Such income would not be subject to tax under the expression "laws in force". While considering the Double Tax Avoidance Agreement the expression "laws in force" would not only include a tax already covered by the treaty but would also include any other tax as taxes of a substantially similar character subsequent to the date of the agreement as set out in article 1(2). Considering the express language of article 1(2) it is not possible to accept the broad proposition urged ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... TAA". 5. Thus, on the facts of the present case, we are bound to follow the judicial precedence in assessee's own case for the earlier years and in view of the finding given therein, we upheld the order of the CIT (A) and dismiss the grounds raised by the revenue. Accordingly, grounds no.1, 2 & 3 are dismissed. 5.2. As far as filing of writ petition to be filed before the Hon'ble High court is concerned if would be sufficient to mention that nothing was brought on record to prove that writ had been filed and heard. Had the final hearing taken place, it would have been a different situation. So, in anticipation of filing of a writ-petition, we are not inclined to defer the decision especially when same is covered by the orders for the earlier years. Considering the above and respectfully following the orders of the Tribunal in the cases of Antwerp Diamond Bank NV Engineering Centre (supra) and Antwerp Diamond Bank NV(supra), we decide the effective ground of appeal in favour of the assessee. 10.2 In view of the above reasoning on facts and law we find that the judicial precedent as cited before us and as discussed and considered at length by the Hon'ble Delhi High Court ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . As the facts and the issue involved in the case before us remains the same as was there before the Tribunal in the preceding years, therefore, we respectfully follow the view therein taken, and conclude, that the amounts received by the assessee from TCL for providing Satellite Telecommunication Services is not to be held as royalty in its hands. The Grounds of appeal Nos. 2 to 5 are allowed in terms of our aforesaid observations. 12. We shall now deal with the issue as to whether or not the assessee had a PE in India during the year under consideration. As observed by us hereinabove, the A.O/DRP had concluded that the Land Earth Station (LES) constituted a PE of the assessee in India. It has been the claim of the assessee before the lower authorities that as the LES was owned and operated by TCL and not by the assessee, therefore, on the said count it could not have been held to have constituted a PE of the assessee in India. Also, as is discernible from the orders of the lower authorities, the A.O/DRP had observed that the Liaison Office (LO) constituted a PE of the assessee in India. As observed by us hereinabove, it was the claim of the assessee that as the LO had not carrie ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the order of the Tribunal for A.Y. 2007-08 to A.Y. 2012-13, we find, that after exhaustive deliberations the Tribunal had concluded that the assessee did not had a PE in India, observing as under: "10. So far as Ground of appeal no. 4 is concerned, the same deals with the grievance of the assessee against the income-tax authorities holding that it has a PE in India. In this context, the relevant facts are that the Assessing Officer noted that assessee owned Space Segment Monitoring System (SSMS), which was equipment installed/located at Arvi, Maharashtra. The Assessing Officer further notes that the Land Earth Station (LES) of VSNL/TCL is also located at this place and that the SSMS equipment plays a critical role in providing telecommunication services to the Land Earth Service Operator (LESO), which is VSNL. The Assessing Officer noted that the said equipment is installed and maintained by the assessee and that assessee also has a liaison office in India. The Assessing Officer notes that the activities of the liaison office cannot be "said to be just a mere liaisoning work in India". The Assessing Officer further notes that the employees/staff of the liaison office provide ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ut in the liaison office. It was pointed out that the liaison office of the assessee has been in existence since it was initially approved by the RBI vide its permission dated 20.10.1999, a copy of which has been placed in the Paper Book at pages 39 to 42. It has been further pointed out that the approval granted by the RBI has been renewed from time to time and so far as the captioned period is concerned, the approval of the RBI vide order dated 10.10.2008 subsists. It is pointed out that the very fact that the RBI continues to accord approval for the liaison office shows that there is no activity of trading, commercial or industrial nature which is carried out so as to treat such liaison office as a PE. 12. So far as the reference made by the lower authorities to SSMS equipment is concerned, the learned representative for the assessee pointed out that in the past years also such equipment was existing, but no adverse view has been taken and, in any case, so far as the instant period is concerned, the assessee has foregone the use of such equipment for providing services. In this context, our attention has been drawn to page 64of the Paper Book wherein a communication dated 28.0 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ot charge any Commission or fee for its liasioning activity/services rendered by it. The standard terms and conditions also stated that the entire expense of the liaison office were to be met exclusively out of the funds received from abroad and that the liaison office could not borrow or lend any money from or to any person in India without prior approval, etc. The aforesaid permission has been further renewed and there is no dispute that for the period under consideration also the requisite approval of the RBI exists for the liaison office of the assessee. We are only highlighting the aforesaid features of the permission granted by the RBI to point out that the liaison office is prohibited from carrying out any business or trading activity. At the time of hearing, it was also stated by the learned representative for the assessee at Bar that till now there is no infringement or any other adverse view taken by the RBI qua the activities which are being carried out by the liaison office in India. This singular aspect is quite pertinent to establish that if the Assessing Officer is to hold to the contrary, i.e. to say that the liaison office was undertaking activities in the nature ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... individual channels (both signalling and voice carriers) to and from satellites in the Indian Ocean region and the frequency deviations. SSMS is not a critical component to the services rendered by the Assessee and even without SSMS, these services can be continued to be rendered. The cost of this equipment is approximately USD 150,000. This investment is insignificant when compared with the total cost of the Assessee's assets worldwide (including satellites) which is USD 2,230,839,000 as per the audited accounts for the year 1998. Thus, SSMS is not contributing to the revenues and hence, no part of the amounts receivable is attributable to SSMS. 4.2 The Assessee has a LO in India, which has been set-up with the approval of the Reserve Bank of India ('RBI'). All the activities of the LO are in accordance with the RBI's approval. The LO undertakes liaison and coordination activities on behalf of the Assessee. There are no income generating activities carried out by the LO in India. The LO was engaged in coordinating a pilot project to assist VSNL and Department of Telecommunications to provide satellite based village public telephone in rural areas. Presently, the LO interact ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on the part of the Assessing Officer to hold that there exists a PE of the assessee in India. Thus, assessee succeeds on this aspect also. 19. Insofar as Ground of appeal no. 5 is concerned, the same relates to income computed by the Assessing Officer, which can be attributable to the PE of the assessee in India. Since we have upheld the primary stand of the assessee that there does not exit any PE of the assessee in India, the dispute in Ground of appeal no. 5 is rendered academic and is dismissed as infructuous." 15. As the facts in the backdrop of which the A.O/DRP had in the aforesaid preceding years concluded that the LO and LES were to be treated as the PE on the assessee in India, remains the same, as are involved in the appeal of the assessee for the year under consideration, we therefore respectfully follow the aforesaid order of the Tribunal. Accordingly, in the backdrop of our aforesaid observations, we herein conclude that the assessee did not have any PE in India during the year under consideration. The Grounds of appeal Nos. 6 & 7 are allowed in terms of our aforesaid observations. 16. We shall now deal with the contention of the assessee that the AO had erred in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... xes in the form of surcharge or education cess. We thus set aside the view taken by the lower authorities and direct the A.O to recompute the tax liability of the assessee in terms of our aforesaid observations. The Ground of appeal No. 9 is allowed. 18. The assessee has assailed the order of the A.O, on the ground, that he has erred in granting TDS credit of Rs. 58,45,615/- as against the assessee's claim of credit of Rs. 58,98,497/-. As the adjudication of the said issue would require verification of the records, we therefore, restore the matter to the file of the A.O to verify the factual position. In case there is a short credit of TDS allowed to the assessee, then the credit for the balance amount shall be allowed by the A.O, as per law. The Ground of appeal No. 10 is allowed for statistical purpose. 19. The assessee has assailed the levy of interest under Sec. 234B of Rs. 1,47,546/-. As the assessee has not raised any submission as regards the aforesaid issue, the same is therefore dismissed as not pressed. The Ground of appeal No. 11 is dismissed. 20. The assessee has assailed the initiation of penalty proceedings under Sec.271(1)(c) of the Act. As the aforesaid ground ra ..... X X X X Extracts X X X X X X X X Extracts X X X X
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