M/S. KUIPER COMPAGNONS RUMTELIKJE ORDERING STEDENBOUW ARCHITECTURE LANDSCAPE BV,BANGALORE vs. DCIT (INTERNATIONAL TAXATION), NEW DELHI
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Income Tax Appellate Tribunal, DELHI BENCH “D” NEW DELHI
Before: SHRI G.S. PANNU, HON’BLE & SHRI SAKTIJIT DEY
आदेश /O R D E R PER SAKTIJIT DEY, J.M.
This is an appeal by the assessee against the final assessment order dated 21.10.2015 passed under section 143(3) read with 1
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section 144C(13) of the Income Tax Act, 1961, in pursuance to the
directions of learned Dispute Resolution Panel (DRP).
When the appeal was called for hearing none appeared on
behalf of the assessee.
On perusal of record, it is observed, though, the appeal was
fixed for hearing earlier on multiple occasions, however, the
assessee never appeared in spite of issuance of notices of hearing.
Even, the notice issued through the office of learned Departmental
Representative by post as well as in the e-mail address of the
assessee, failed to evoke any response. Since, the assessee has not
responded to the notice of hearing issued by this office on multiple
occasions and has not made any attempt to enquire about the fate
of the present appeal, it has to be concluded that the assessee has
no interest in pursuing the present appeal.
In view of the aforesaid, we proceed to dispose off the appeal
ex parte qua the assessee after hearing learned Departmental
Representative and based on materials available on record. The
basic issue in dispute in the present appeal is concerning
disallowance of Rs.76,14,726/- under section 40(a)(i) of the Act.
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Briefly the facts are that assessee is a non-resident corporate
entity incorporated in Netherlands. For the assessment year under
dispute, assessee filed its return of income declaring income of
Rs.8,48,930/- and claiming refund of Rs.28,48,790/-. In course of
assessment proceedings, the Assessing Officer noticed that in the
relevant financial year the project of office of the assessee had
claimed certain expenditure as consultancy charges. On further
scrutiny the Assessing Officer found that no tax has been deducted
on payment of consultancy charges. When the Assessing Officer
called upon the assessee to explain why the payment made being in
the nature of fee for technical services (FTS) under section 9(1)(vii)
of the Act, no tax was deducted at source the assessee furnished its
explanation submitting that the payment made is not in the nature
of FTS. The Assessing Officer, however, was not convinced with the
submissions of the assessee and held that the amount paid towards
consultancy charges was liable for deduction of tax under section
195 of the Act. The assessee having failed to do so, the Assessing
Officer disallowed the consultancy charges paid to two parties
aggregating to Rs.76,14,726/- by invoking the provisions of section
40(a)(i) of the Act. Against the draft assessment order passed by
the Assessing Officer, assessee raised objections before learned
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Dispute Resolution Panel (DRP). However, learned DRP rejected the
objections of the assessee. Accordingly, the assessment was
finalized.
We have heard learned Departmental Representative and
perused the materials on record.
Undisputedly, in the year under consideration, the project
office of the assessee had claimed deduction of consultancy charges
paid to two overseas entities as expenses. However, in course of
assessment proceedings, the assessee was unable to furnish any
cogent explanation supported by evidence to establish that the
consultancy charges paid are not in the nature of FTS. Further, on
perusal of the directions of learned DRP, it is observed that similar
disallowance under section 40(a)(i) of the Act was made in
assessment year 2011-12 in respect of similar payment and the
assessee accepted the disallowance. Thus, the assessee having
failed to controvert the concurrent finding of the departmental
authorities to the effect that the consultancy charges paid are in
the nature of FTS, we do not find any reason to interfere with the
decisions of the departmental authorities. Accordingly, the
disallowance made under section 40(a)(i) of the Act is upheld.
Grounds are dismissed. 4
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In the result, the appeal is dismissed.
Order pronounced in the open court on 26/12/2022
Sd/- Sd/- (G.S. PANNU) (SAKTIJIT DEY) PRESIDENT JUDICIAL MEMBER Dated: 26.12.2022
*Kavita Arora, Sr. P.S. Copy of order sent to- Assessee/AO/Pr. CIT/ CIT (A)/ ITAT (DR)/Guard file of ITAT. By order
Assistant Registrar, ITAT: Delhi Benches-Delhi
