TMI Blog2015 (12) TMI 1894X X X X Extracts X X X X X X X X Extracts X X X X ..... (9) TMI 1532 - ITAT MUMBAI ] as held reimbursements received by the assessee are in respect of specific and actual expenses incurred by the assessee and do not involve any markup, there is reasonable control mechanism in place to ensure that these claims are not inflated, and the assessee has furnished sufficient evidence to demonstrate the incurring of expenses. There is thus no good reason to make any addition to income in respect of these reimbursements of expenses - Decided in favour of assessee. Interest charged u/s 234B is to be deleted. Income relatable to work performed in India in liable for taxation in India - HELD THAT:- We find that in assessee s own case for A.Y.1998-99 to 2001-02 [ 2015 (9) TMI 1532 - ITAT MUMBAI ], the Tribunal has held that the profit which is attributable to the PE, can only be assessed in India. Respectfully following the aforesaid order and order of the Hon ble Special Bench in the case of Clifford Chance [ 2013 (6) TMI 544 - ITAT MUMBAI ] It is held that the only income in respect of services rendered in India, which are attributable to PE only, would be taxable in India. Thus, ground no. raised by the Revenue stands dismissed. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Commissioner (Appeals) erred in not directing the Assessing Officer to allow deduction for bad debts in respect of services rendered outside India if, income in respect of services rendered outside India was ultimately held as taxable in India. 7. The learned Commissioner (Appeals) erred in directing the Assessing Officer to apply the rate of tax applicable for a firm. The learned Commissioner (Appeals) ought to have appreciated that the correct rate of tax applicable is that of association of persons i.e. 30%. 8. The learned Commissioner (Appeals) erred in not entirely deleting the interest levied under section 234B. 9. The learned Commissioner (Appeals) erred in not quashing the penalty proceedings under section 271(l)(c) of the Income-tax Act initiated by the learned Assessing Officer. 10. The learned Commissioner (Appeals) erred in not deciding the following grounds in the appeal: 6. The learned Assistant Director of Income tax erred in not allowing deduction for remuneration paid by the appellant to its employees for services performed outside India. 7. The learned Assistant Director of Income tax erred in holding that the appellant was lia ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ee s case before the Revenue authorities had been that, it had not opened any branch or office in India and neither it has any office or place of work in India for rendering the services. All the legal services are provided by the Partners and staff in UK and the expenses of travel, stay at hotels and other locations and other incidental expenses were borne by the clients. Thus, there is no Permanent Establishment of the assessee in India within the ambit of Article 5 of the DTAA between India and UK. Not even within the meaning of Article 5(2)(k) does the assessee has any service PE, because the partners and staff of the assessee who have performed services in India have not exceeded the stay of 90 days. The assessee s submissions in this regard before the Assessing Officer have been incorporated by the Assessing Officer from pages 3 to 5 of the assessment order. However, the Assessing Officer, held that assessee has service PE in India and computed the income of the assessee in accordance with Article 7 as per the discussion appearing at pages 10 to 12 of the assessment order. 7. The Ld. CIT(A) following the earlier year orders of the CIT(A), decided this issue against the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s dismissed. 4. Ground No. 2: It has been submitted by the Ld. Senior Counsel of the assessee that the Assessing Officer in the order giving effect to the order passed by Ld. CIT(A) has allowed appropriate relief to the assessee and therefore, this ground has become academic and is not required to be adjudicated, therefore, it is dismissed as infructuous. 5. Ground Nos. 3 4: In these grounds, the assessee has challenged the action of Ld. CIT(A) in holding the action of the AO in treating reimbursement of the expenses as part of the income of the assessee. During the course of hearing, Ld. Counsel has submitted that identical issue was involved in the earlier years and the same has been decided in favour of the assessee in the various orders passed by the Tribunal, particulars of which have already been given in ground no.1 above. 5.1. On the other hand, Ld. DR has supported the orders of the lower authorities. 5.2. We have gone through the submissions made by both the sides and lower authorities and order passed by the Tribunal in earlier years. We find it appropriate to produce relevant para from the order of the Tribunal dated 7th September 2015. 12. As regards ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... refore, no grievance of the assessee was left. 6.1. In view of the aforesaid submissions these grounds are dismissed as infructuous. 7. Ground No.7: This ground has not been pressed by the Ld. Senior counsel of the assessee, and therefore, the same is dismissed. 8. Ground No. 8: In this ground, the assessee has challenged the action of Ld. CIT(A) in not entirely deleting the interest levied u/s.234B. 8.1. During the course of hearing, Ld. Senior counsel has submitted that this issue has been decided in favour of the assessee by the Tribunal in assessee s own case, particulars of which have already been given in Ground No.1 above, wherein Hon ble Tribunal has followed the judgment of Hon ble Bombay High Court in the case of DIT vs. NGC Networks LLC 313 ITR 187. 8.2. On the other hand, Ld. DR has supported the order of the lower authorities. 8.3. In this regard we refer to the judgment of Tribunal dated 7th September 2015, and the relevant para is reproduced below: 20. Regarding ground no. 2, Mr. Dastur, pointed out that this issue has been decided in favour of the assessee right from assessment year 1995-96 to 1997-98 by the Tribunal, following the decision of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e on the basis of orders of the Tribunal passed in the case of the assessee for A.Y. 1997-98 M.A.No.392/M/2004 order dated 20.02.2015 and order dated 7.9.2014 (for A.Y. 1998-99 and 2001-02), wherein it was held that only income related to services rendered in India, is liable to tax in India. Further, reliance was also placed by him upon the judgment of Hon ble Mumbai Special Bench of the Tribunal in the case of Clifford Chance, 143 ITD 1 (SB) wherein it was held that only income related to services rendered in India was liable to be taxed rendered in India. 13.1. On the other hand, Ld. DR has supported the orders of the AO. 13.2. We have gone through the facts of the case before us as well as order passed by the Tribunal in assessee s own case in earlier years and find that this issue is squarely covered in favour of the assessee. We find that in assessee s own case for A.Y.1998-99 to 2001-02 vide order dated 7.9.2015, the Tribunal has held that the profit which is attributable to the PE, can only be assessed in India. Relevant para of the Tribunal s orders is reproduced below: 19. In ground no. 1, the Revenue has challenged the taxability of income related to work perf ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as income of the assessee this issue is decided in favour of the assessee and against Revenue. Accordingly, ground no. 3 as raised by the Revenue is dismissed. 14.1. We direct the AO to follow the aforesaid order of the Tribunal, and hold that no amount should be disallowed. Thus, ground no.2 of the Revenue s appeal stands dismissed. 15. As a result appeal of the Revenue stands dismissed. ITA No.3185/Mum/2010 assessee s appeal for A.Y. 2007- 08. In the appeal assessee has filed following grounds of appeal: 1. The learned Commissioner (Appeals) erred in holding that the appellant has a permanent establishment in India under Article 5(2)(k) of the Tax Treaty between India and the U.K. 2. Without prejudice, the learned Commissioner (Appeals) ought to have specifically directed the Assessing Officer to assess the appellant only in respect of fees of E 758,535.35, which were relatable to work performed in India. 3. The learned Commissioner (Appeals) erred in upholding the action of the Assessing Officer in treating disbursements as part of income of the appellant. 4. Without prejudice to ground 3 above, the learned Commissioner (Appeals) erred in ..... X X X X Extracts X X X X X X X X Extracts X X X X
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