DCIT, CIRCLE- 16(2), NEW DELHI vs. MITSUBISHI CORPORATION INDIA PVT. LTD., NEW DELHI

PDF · subscribers
ITA 9364/DEL/2019Status: DisposedITAT Delhi12 August 2022AY 2016-175 pages

In favour of the assessee: the Revenue's appeal was dismissed. From the AI summary of this appeal.

AI SummaryDismissed

What did the Tribunal hold?

The Tribunal held that the issue was recurring and had been decided in favour of the assessee in previous assessment years by the Tribunal. Following the coordinate bench's decision, the Tribunal declined to interfere with the CIT(A)'s findings.

What were the facts?

The Revenue appealed against the CIT(A)'s order which deleted a disallowance of Rs. 11,85,35,823/- made for non-deduction of TDS on purchases from group entities. The Assessing Officer had made a total disallowance of Rs. 23,70,71,645/-.

What were the issues?

Whether the disallowance for non-deduction of TDS on purchases from group entities is justified, considering the provisions of DTAA and non-discrimination clauses.

Which sections of the Income-tax Act were involved?

Section 40(a)(ia),Section 195

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, [ DELHI BENCH : “D” NEW DELHI ]

Before: SHRI SHAMIM YAHYA & SHRI YOGESH KUMAR US

For Appellant: Shri Tarandeep
For Respondent: Ms. Sapna Bhatia
Hearing: 08.08.2022Pronounced: 12.08.2022

This appeal is filed by the Revenue for assessment year 2016-17 against the order of the ld. Commissioner of Income Tax (Appeals)–6, New Delhi, dated 26.09.2019.

2.

This appeal is defective as the Revenue has not filed any grounds of appeal, but submitted that the grounds mentioned in the Authorization letter

DCIT Vs. Mitsubishi Corporation India, ND for filing the Appeal issued by the Pr. Commissioner of Income Tax, Delhi, vide letter dated 04/02/2019 may be treated as grounds of Appeal in the present Appeal, which are hereunder:-

“Whether on the facts and circumstances of the case, the Ld. Is legally justified in deleting the disallowance of Rs. 11,85,35,823/- on account of disallowance of non-deduction of TDS?

2. Whether on the facts and circumstances of the case, the Ld. Is legally justified regarding disallowance of non-deduction of TDS under Section 40(a)(ia) of the I.T Act, as the assessee company made may purchases from its associates company and various non- residents group companies?”

3.

Brief facts of the case are that, the assessment order u/s 143(3) of the Act came to be passed on 22/12/2018 by making disallowance for non deduction of TDS of Rs. 23,70,71,645/-. As against the assessment order, the assessee has preferred an Appeal before the CIT(A) and the Ld.CIT(A) vide order dated 26/09/2019 partly allowed the Appeal deleting the disallowance of Rs. 11,85,35,823/- on account of disallowance of non deduction of TDS.

4.

Aggrieved by the order of Ld.CIT (A), the assessee has preferred the present Appeal.

5.

The Ld. Counsel for the assessee submitted that, the issue involved in the present appeal is recurring in nature which have been decided in favour of the assessee right from Assessment Year 2006-07 to 2013-14 by the Tribunal. Therefore, submitted that the addition made by the A.O which has been deleted by the CIT(A) requires no interference by thesis Tribunal.

DCIT Vs. Mitsubishi Corporation India, ND

6.

Per contra, the Ld. DR neither disputed the above facts nor produced any contrary decisions in favour of the Revenue.

7.

We have heard the parties, perused the material on record and gave our thoughtful consideration.

8. The Ld. A.O during the course of scrutiny assessment proceedings found that the assessee has not deducted TDS on purchases made from group entities which are reproduced hereunder:-

S. No. Name and address of Description of Amount of the A.E transaction purchases 1 Mitsubishi Import of goods 8,11,45,10,660 Corporation, Japan 2 MC, Energy Inc Import of goods 1,27,86,131 3 Mitsubishi Corporate Import of goods 13,17,02,979 Hong Kong Ltd. 4 SPDC Ltd. Import of goods 33,52,02,588 5 Kohjin Life Sciences Import of goods 10,29,114 Co. Ltd. 6 Mitsubishi Shoji Import of goods 35,88,732 Chemical Corporation 7 Mitsubishi Co Import of goods 1,40,19,024 (Thailand). Ltd. 8 Asia Modified Starch 79,47,865 Co. Ltd. TOTAL 8,62,07,87,093/-

9.

The Ld. A.O while making the addition has referred the provisions of Section 195 of the Act and the relevant Article of DTAA. The above issue being recurring in nature which has been decided in favour of the assessee by the Tribunal in assessee’s own case for Assessment Year 2006-07 to 2014-15.

DCIT Vs. Mitsubishi Corporation India, ND The Co-ordinate Bench of the Tribunal in & 4346/Del/2019 while dealing with the very same issue for the Assessment Year 2014-15 and 2015-16 held as under:-

8.

We have carefully perused the order of this Tribunal. This Tribunal has also considered this issue in for A.Y.2013-14. The relevant findings read as under :-

Following, the decision rendered by coordinate Bench of the Tribunal in assessee’s own ease in AY 2010-11 and the decision rendered by Hon’ble High Court in CIT vs. Herbalife International India (P.) Ltd., wherein the assesses was an intervener, we are of the considered view that AO/DR.P have erred in disallowing of Rs,30,41,71,07,047 regarding purchases made by the assesses from its AEs u/s 40A(i) as section 40A(i) is not applicable to the assesses due to non- discrimination clause under DTAA and due to the fact that AEs do not have a permanent PE in -India. So, the issue is determined in favour of the assessee. Consequently, the appeal Filed by the assesses is hereby allowed.

9. Respectfully following the decision of the coordinate Bench we decline to interfere with the findings of the CIT(A) this ground is accordingly dismissed.”

10.

Even in the present Appeal, there is no change in facts and circumstances, that of the earlier Assessment years. Therefore, by respectfully following the decision of the Coordinate Bench, we are declined to interfere with the findings and conclusion of the CIT(A). Accordingly, the grounds of Appeal filed by the Revenue are dismissed.

DCIT Vs. Mitsubishi Corporation India, ND

11.

In the result, the Appeal filed by the Revenue are dismissed.

Order pronounced in the open court on : 12/08/2022.

More judgments on Section 40(a)(ia)

All 7,300 judgments and leading authorities on Section 40(a)(ia) →

Recent GST High Court judgments

Search GST case law →