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TMI Blog2015 (12) TMI 1894X X X X Extracts X X X X X X X X Extracts X X X X ..... We first take up ITA No.897/Mum/2007 for A.Y. 2003-04 The assessee objects to the order dated October 30, 2006 passed by the Commissioner of Income-tax (Appeals) XXXIII, Mumbai for the assessment year 2003-04, on the following grounds: - 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 GBP 2,15,692.75, 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 6 above, the learned Commissioner (Appeals) erred in confirming the disallowance in respect of disbursement to the extent of 15% of the disbursement claim proportionate to the fee relating to services rendered in India as compared to the total fees. The Commissioner (Appeals) ought to have entirely deleted the disallowance. 5. The learned Commis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (iii) Linklaters v. DIT for the A.Y. 1997-98 in ITA No.1711/M/2004 order dated 8th August 2014 (iv) Linklaters for the A.Ys.1998-99 to 2001-02 order dated 7.09.2015 3.2. On the other hand, Ld. DR has also supported the order of lower authorities as well as orders of the Tribunal of earlier years passed in assessee's own case. 3.3. We have gone through the submissions made by both the sides, orders of the lower authorities as well as orders of the Tribunal passed in assessee's own case for earlier years. On this issue, the latest order passed by the Tribunal is order dated 07.09.2015 in which identical issue has been decided, the relevant para from this order if reproduced below: "5. In ground no. 2, the assessee has challenged the issue of Permanent Establishment in India under Article 5(2)(k) of India UK DTAA. 6. As stated above, the assessee is providing legal services in various areas and during the relevant previous year, the assessee had rendered Legal Consultancy Services in connection with the different projects to various concerns both within and outside India. The details of the different projects for which some part of the work were performed in India, for which ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e rescue of the assessee since, as we have already held, the assessee did have a PE in India under art. 5(2)(k) of the India-UK tax treaty, and, accordingly, profits attributable to the PE are taxable under art. 7 of the India-UK tax treaty. 107. In view of the above discussions, we are unable to uphold the plea so strenuously argued by the learned counsel for the assessee, and we hold that the authorities below have rightly invoked the provisions of art. 5(2)(k). We approve the same, and decline to interfere in the matter. On adjustments required claimed by the assessee in earnings of the PE, on the basis of prevailing market prices of similar services, in view of independence fiction of art. 7(2)." 9. Thus, respectfully following the earlier years orders and the judicial precedence, which is applicable on the facts permeating in this year, also we decide the impugned issue against the assessee. Accordingly, ground no. 2 stands dismissed. 3.4. We find that the facts are same in this year as well. No distinction has been made by the assessee. The issue involved before us is identical to the issue that was involved in the aforesaid order, and therefore, respectfully following ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed by the CIT(A) and hold that no part of reimbursements of expenses received by the assessee, on the facts of this case, be treated as income of the assessee. The assessee gets the relief accordingly." 13. Thus, respectfully following the same, we allow these grounds in favour of the assessee and against the Revenue that the entire reimbursement of expenses here in the facts of the assessee's case cannot be treated as income. 14. So far as issues raised in ground no. 7, 8 & 9, the Ld. Senior Counsel for the assessee submitted that, as of now, the issues raised in these grounds have become purely academic. Accordingly, ground no. 7, 8 & 9 are treated as infructuous, being purely academic in view of the issues decided in the foregoing grounds." 5.3. We have gone through the facts of the case and find that the facts are similar and issued decided by the Tribunal is identical and therefore, we allow these grounds in favour of the assessee and against the Revenue and direct the AO to follow the aforesaid order of the Tribunal. 6. Ground Nos. 5 & 6: With regard to these grounds it has been submitted by the Ld. Counsel these have become infructuous as the assessee has rightly gi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ara 14 at page 10 of the order of the Tribunal for A.Y. 1998-99. 11. As a result, the appeal filed by the assessee is partly allowed. ITA NO.1532/Mum/2007 (2003-04) The Revenue has raised following grounds of appeal: 1. On the facts and in the circumstances of the case and in law, the Ld. CIT('A) erred in holding that only the income relatable to work performed in India is liable for taxation in India. 2 On the facts and in the circumstances of the case and in law, the Ld. CIT(A) erred in directing the Assessing Officer to allow 85% of disbursement claim proportionate to the fee relating to the services rendered in India as compared to total fees. 3. The appellant prays that the order of the Ld.CIT(A) on the above grounds be set aside and that of the AO restored. 4. The appellant craves leave to amend or alter any ground or add a new ground which may be necessary. 12. Ground No.1: In this ground, the Revenue is aggrieved with the action of Ld. CIT(A) in holding that only the income relatable to work performed in India in liable for taxation in India. In this regard Ld. Senior counsel of the assessee has submitted that this issue also stands covered in favour of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ch are attributable to PE only, would be taxable in India. Thus, ground no. raised by the Revenue stands dismissed. 14. Ground No.2: In this ground, the Revenue is aggrieved with the action of Ld. CIT(A) in directing the AO to allow 85% of disbursement claim proportionate to the fee related to the services rendered in India as compared to total fees. With respect to this ground also, it has been submitted by the Ld. Senior counsel that this issue also stands covered in favour of the assessee by the orders of the Tribunal in assessee's own case, particulars of which have already been given in ground no.1 of assessee's appeal. For the sake of ready reference, we refer to the order of the Tribunal dated 7.9.2015 and reproduced relevant para hereunder: "21. As regards issue raised in ground no. 3, that is, restricting the disallowance of reimbursement to the extent of 25% as against 100%, it has been pointed by Ld. Senior Counsel that the Tribunal has already held that no amount is disallowable and this ground is similar to ground no. 5 & 6 of the assessee's appeal. Accordingly, in view of the finding given therein that none of the reimbursement of expenses amount can be considered ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the above grounds of appeal. 16. It is noted that grounds raised in this year are identical to the grounds raised in A.Y. 2003-04. Both the parties agreed that facts are identical and issues stand covered with the orders of earlier years thus, we direct the AO to follow our order for A.Y. 2003-04 17. As a result appeal of the assessee is partly allowed. ITA No.4908/Mum/2010 Revenue's appeal for A.Y. 2007- 08 In this appeal Revenue has filed following grounds of appeal : 1. On the facts and in the circumstances of the case and in law, the Ld. CIT(A) erred in holding that only the income relatable to the work performed in India is liable for taxation in India. 2. On the facts and in the circumstances of the case and in law, the ld. CIT(A) erred in directing the Assessing Officer to allow 85% of disbursement claim proportionate to the fee relating to the services rendered in India as compared to total fees. 3. On the facts and in the circumstances of the case and in law, the ld. CIT(Appeals) erred in deleting interest charged uls.234B of the Act holding that tax is deductible at source in this case ignoring the fact that assessee had not applied for order for nil deduc ..... X X X X Extracts X X X X X X X X Extracts X X X X
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