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Income Tax Appellate Tribunal, MUMBAI BENCH “G”, MUMBAI
Before: SHRI C.N. PRASAD, HON’BLE & SHRI N.K. PRADHAN, HON’BLE
O R D E R PER C.N. PRASAD (JM) These three appeals are filed by the Revenue against different orders of the Learned Commissioner of Income Tax (Appeals)-14, Mumbai [hereinafter in short “Ld.CIT(A)”] in Appeal Nos. CIT(A)-14/IT- 10185/17-18, CIT(A)-14/IT-179B/16-17 and CIT(A)-14/IT-213B/16-17 dated 20.08.2018 for the A.Ys. 2012-13, 2013-14 & 2014-15 respectively.
2 51 & 52/MUM/2019 (A.Ys: 2012-13, 2013-14 & 2014-15) M/s. Zoomin Online India Pvt. Ltd., 2. Revenue has raised the following common grounds in its appeals except for figures - “1. On the facts of the case and circumstances and in law, the CIT(A) erred in directing the AO to delete the disallowance u/s. 40(a)(i) of Rs. 88,11,937/- holding that the server charges and web hosting charges paid by the assessee to Amazon Web Services and Softlayer Technologies were not in the nature of interest or royalties or fee for technical services or other sum chargeable to tax in India and the assessee was not required to deduct tax at source u/s. 195 while making payments outside India.
On the facts of the case and circumstances and in law, the CIT(A) erred in directing the AO to delete the disallowance u/s. 40(a)(i) of Rs.70,12,134/- without appreciating that the payment by the assessee to foreign companies on account of "online advertising" falls within the meaning of royalty as per provisions of section 9(1)(vi) of the Act as well as provisions of the DTAA between India and Ireland and USA as held by the Bangalore Tribunal in the case of Google India (P.) Ltd., [2018] 93 taxmann.com 183 (Bangalore - Trib.).
3. On the facts of the case and circumstances and in law, the CIT(A) erred in directing the AO to delete the disallowance on the basis of additional evidence filed before CIT(A) without calling the remand report from the Assessing Officer.”
At the time of hearing, Ld. DR fairly submitted that tax effect on the issue in the present appeals is below ₹.50 Lacs and in view of the CBDT Circular No. 17/2019 dated 08.08.2019 in F.No.279/Misc.142/2007-ITJ (Pt), the appeals of the revenue are not maintainable.
We have heard the submissions of Ld. DR and perused the grounds of appeal in these appeals. We find that the tax effect in all these appeals is less than ₹.50 Lakhs and therefore the appeals of the Revenue are not 3 51 & 52/MUM/2019 (A.Ys: 2012-13, 2013-14 & 2014-15) M/s. Zoomin Online India Pvt. Ltd., maintainable on account of low tax effect in view of the CBDT Circular No.17/2019 dated 08.08.2019.
In the result, appeals of the Revenue are dismissed.
Order Pronounced in the Open Court on the 19th February, 2020