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Income Tax Appellate Tribunal, AHMEDABAD “D” BENCH
Before: Ms. Annapurna Gupta & Shri T.R. Senthil Kumar
IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD “D” BENCH Before: Ms. Annapurna Gupta, Accountant Member And Shri T.R. Senthil Kumar, Judicial Member
ITA No. 1483/Ahd/2019 Assessment Year 2016-17
M/s. Jay Global (UK) The Assistant Limited (formerly Commissioner of known as Jay Mining Vs Income-tax Machinery Limited) C/0 (International Jay Global (India) Ltd Taxation)-2, 85/1 Topsia Road Ahmedabad (South) Kolkata 700046 (Respondent) PAN No: AACCJ3893R (Appellant)
Appellant by : Shri S.N. Soparkar, Sr. Adv. & Shri Parin Shah, A.R. Respondent by : Shri Atul Pandey, CIT/D.R. Date of hearing : 07-07-2022 Date of pronouncement : 24-08-2022 आदेश/ORDER PER : T.R. SENTHIL KUMAR, JUDICIAL MEMBER:-
The present appeal has been filed by the Assessee against the final assessment order dated 06.08.2019 passed by the Assistant Commissioner of Income Tax Circle (INT. TAXN)-2, Ahmedabad, under section 144 r.w.s. 144C(13) of the Income Tax Act, 1961
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(hereinafter referred to as ‘the Act’) relating to the Assessment Year (A.Y) 2016-17.
The brief facts of the case is that the assessee, M/s Joy Global (UK) Ltd. (Formerly Joy Mining Machinery Ltd. -JMML), is a non-resident UK company. The assessee company had entered into a consolidated contract dated 15.10.2009 for all the issues related to introduction of continuous mining technology in these mines and its operation for five years. On the perusal of such contract, it is seen that JMML has significant presence in the Sheetaldhara Mines on account of its activity of introduction of continuous mining technology. The assessee company thus had its Permanent Establishment (PE) in India and was liable to be taxed in relation to income from such activities.
Earlier, M/s South Eastern Coalfields Limited (SECL) had approached the then DDIT (Intl. Taxn)-Raipur for certificate under section 195(2) of IT Act in respect of payments made to M/s-Joy Mining Machinery Ltd, UK (JMML) in respect of the above contract for introduction of continuous Miner Technology at its Sheetaldhara Mines in Hasdev area. Against the tender floated, SECL had entered into a consolidated contract for all the issues related to introduction of continuous mining technology in these mines and its operation for five years. The JMML had taken complete responsibilities of execution of the project right from scientific site investigation, supply, erection and installation,
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semics and maintenance and training. The contract had thus following components: a. Scientific Site Investigation & Monitoring. b. Supply equipments; initial spares, consumables and maintenance spares. c. Contract for provision of services. d. Site assistance services.
Subsequently, some of the portion of the contract (scientific investigation and provision of services) was assigned to Joy Mining Services India Pvt Ltd (JMSIPL). However, the consent letter of SECL clearly mentioned that JMML will be fully responsible to its obligations even after the assignment of the contracts. Under the supply contract, the payment for maintenance spares was to be made not on the basis of actual cost of spare, but on the basis of per tonne production achieved as per the contract. The perusal of the terms of contract revealed that the payments for design and supply of equipments could not be termed as a payment under a standalone sales contract. Holding that 50% of the profits from the supply of equipments and initial spares will be taxable in India u/s 9(1)(i) of the IT Act read with Article 7 of the India-UK DTAA, the Assessing Officer directed the SECL to deduct tax at source @2% on the payment made to JMML under supply contract vide order u/s 195(2) of the IT Act dated 13/03/13. In relation to payment for maintenance spares made on the basis of minimum guaranteed production on per tonne basis, the same was .considered to be in the nature of Royalty, wherein JMML was taking share in the profit against transfer of technology and know-how in relation to continuous miner technology. Accordingly, vide order u/s 195(2) of
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the IT Act dated 13/03/13, the SECL was directed to deduct tax at source @ 10% on the such payments for maintenance spares under section 9(1)(vi) of the Act read with Article 13 of India-UK DTAA. The order u/s 195(2) of the IT Act passed by the then DDIT(IT).
4.1. Thus the A.O. held that the payments in the nature of Royalty being effectively connected to the PE of the assessee Company in India, are thus taxable u/s 44DA of the IT Act read with Article 13(6) r.w. Article 7 of the India-UK DTAA. Accordingly, the payments of Rs.6,97,16,277/- made to the assessee company by SECL during A.Y.2016-17 for maintenance spares is taxable u/s 44DA of the IT Act read with Article 13(6) r.w. Article 7 of the India- UK DTAA. The assessee company has neither maintained any books of account in accordance with sec. 44AA for the purposes of determining income u/s 44DA, nor any detail of expenses incurred in relation to the above payments have been submitted by the assessee company. Accordingly, the Rule 10 of the IT Rules'62 is hereby invoked and 60% of the above royalty payment of Rs.6,97,16,277/- is considered as taxable income of the PE of the assessee company in India for A.Y.2016-17. Accordingly, the addition of Rs.4,18,29,768/- is made to the total returned income of the assessee company for A.Y.2016-17 on this issue. The penalty proceedings u/s 271(1)(c) of the IT Act, 61 are also initiated for concealment of income on this issue for A.Y.2016-17.
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This Draft Assessment order was carried to Dispute Resolution Panel (hereinafter referred to as “DRP”) by the assessee and the Ld. DRP held as follows: From the above, it is clear that the supply of equipments and spares was not a simple contract of supply as claimed by the assessee. From the analysis of contract, the assessee was to supply, install and commission equipments at the site and ensure a guaranteed production for 5 years. The assessee was also required to operate and maintain the mine. The assessee was also required to provide services and skilled manpower. 6.1.4 In view of the above, we are of the opinion that the order of the Hon'ble ITAT was passed without considering the above facts. Therefore, we respectfully disagree with the above findings. The same being per incuriam (as the order was passed without considering the entire facts of the case). ………………………………………………. 6.1.6 Having confirmed the findings of the AO on this issue in last year also on merit, and department having decided to go into further appeal against the said order of the Hon'ble ITAT, we do not find any infirmity in the draft order of the AO in keeping the issue alive. We have also taken note of the decision of the Hon'ble Supreme Court of India in the case of Malabar Industrial Co. Ltd. vs. Commissioner of Income Tax (2000) 159 CTR 0001 : (2000) 243 ITR 0083 : (2000) 109 TAXMAN 0066 wherein it is observed that "The scheme of the Act is to levy and collect tax in accordance with the provisions of the Act and this task is entrusted to the Revenue." In view of above, we find that the approach of the AO is acceptable and no direction is required to be given in respect of the same. 6.1.1 The ground of objection is thus disposed off accordingly.“ 6.2. since the facts remain same during the year under consideration, following the consistent views and findings of the DRP on this issue in earlier A.Y. as above, we upheld the approach of the A.O. and, therefore, no direction is required to be given in respect of the same.
5.1. Pursuant to the DRP’s direction this impugned final assessment order is passed by the Assistant Commissioner of Income Tax confirming the payments are in the nature of royalty
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being effectively connected to the Permanent Establishment (PE) of the assessee company in India and thus taxable u/s. 44DA of the Act read with Article 13(6) r.w. Article 7 of the India-UK Double Taxation Avoidance Agreement and demanded a tax of Rs. 2,22,99,530/-.
Aggrieved against the same, the assessee is before us raising the following Grounds of Appeal: 1. That the order passed by the Learned Assistant Commissioner of Income-tax (International Taxation) - 2, Ahmedabad (here-in-after referred to as 'Learned AO' or Id AO') u/s 143(3) read with section 144C of the Income-tax Act, 1961 ('Act') and the directions of the Learned Dispute Resolution Panel (here-in-after referred to as 'Learned DRP') is contrary to the provisions of law and erroneous on the facts of the case and liable to be quashed. 2. That on the facts and circumstances of the case, the Ld AO failed to appreciate that income from supply of maintenance spares from outside India cannot be taxed in India in the absence of any activity of the non-resident in India. 3. That the Ld AO erred in treating the contract for supply of equipment, scientific site investigation and provision for services as composite contract. 4. a) That the Ld AO erred in holding that the assessee has a Permanent Establishment (PE) in India. b) Without prejudice to the above, and even assuming but not admitting that assessee has a PE in India, the Ld AO erred in not appreciating that nothing further can be attributed to such PE on account of Income from supply of maintenance spares in India. 5. That the Ld AO erred in treating the consideration from sale of maintenance spares as royalty connected to PE in India and taxable u/s 44DA of the Act read with Article 13 read with Article 7 of India-UK Treaty. 6. That the Ld AO erred in arbitrarily treating 60% of consideration from supply of maintenance spares as business profit thereby arriving at total taxable income of INR 41,829,768. 7. That the Ld AO and Ld DRP erred in not following the judgment of jurisdictional Ahmedabad Tribunal in assessee's own case for AY 2012-13 and AY 2013-14 wherein it was held that supply of maintenance spares by the appellant from outside India is not taxable in India. 8. That the Ld AO erred in levying interest u/s 234B of the Act.
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At the outset, the Ld. Senior Counsel Shri S.N. Soparkar appearing for the assessee submitted that this identical issue is covered in favour of the assessee by the decision of the Co-ordinate Bench in assessee’s own case for the earlier Assessment Years 2012-13 & 2013-14 in ITA Nos. 655 & 656/Ahd/2017 vide order dated 05/07/2017 and for the other Assessment Years 2014-15 & 2015-16 vide order dated 09/12/2019 in ITA Nos. 2303/Ahd/2017 and 2008/Ahd/2018. Ld. Senior Counsel also further submitted that as against order dated 05/07/2017 in ITA Nos. 655 & 656/Ahd/2017, Revenue has filed appeal before the Hon’ble High Court of Gujarat and the same is numbered as Tax Appeal No. 349 of 2018 and 382 of 2018 and the substantial question of law were been admitted and pending before the Hon’ble High Court. Further no stay is being obtained by the Revenue, before the Hon’ble Gujarat High Court, therefore, it is appropriate to follow the earlier orders passed by the Co-ordinte Bench of this Tribunal in assessee’s own case.
Ld. D.R. appearing for the Revenue could not controvert to the above submissions and also admitted that the grounds of appeal raised in the present appeal are identical to that of the earlier assessment years.
We have given out thoughtful consideration and perused material available on record. The Co-ordinte Bench of the Tribunal in ITA Nos. 2303/Ahd/2017 has followed assessee’s own case for the earlier assessment years which is reproduced as follows:
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At the time of hearing, assessee stated that issue is squarely covered in favour of the assessee by the order of Co-ordinate Bench in assessee's own case for A.Ys. 2012-13 & 2013-14 and the order of the IT AT is reproduced: 5. Facts of the case are that the appellant company is incorporated under the laws of United Kingdom (UK). The appellant company is a global leader in the manufacture, sale and servicing of underground mining equipment and parts. 6. The appellant company entered into the following contract with South Eastern Coalfields Limited (SECL)- (a) Contract for supply of equipment, initial spares, consumables and maintenance spares. (b) Contract for Scientific Site Investigation services. (c) Contract for provision of services. 7. The contract for Scientific Site Investigation services was subsequently assigned to Joy Mining Services India Pvt. Ltd. (JMSIPL) under the same terms and conditions as was agreed with the appellant company by SECL. Similarly, contract for provision of services was also completely assigned to JMS India under the same terms and conditions as was agreed with the appellant company by SECL. 8. Profits earned by JMS India from the two contracts assigned to it by the appellant company were offered for taxation and have been taxed accordingly. To this extent, there is no dispute. 9. The bone of contention between the appellant company and the revenue relates to the profit earned from contract for supply of equipment, initial spares, consumables and maintenance spares by the appellant company. 10. The appellant company claims that the income from supply of maintenance spares have been earned from outside India where the risk and title to the goods have been transferred and, therefore, no activity has been performed by the appellant company in India for transfer of spares from outside India. The appellant company further contends that since it does not have any other income and the only income earned by it was with respect to supply of maintenance spares, there was no income which could be taxed in India. It is further stated that as far as income from services performed in India was concerned, same has been rendered by JMS India and the income on account of such services has been offered to tax in India by JMSIPL. This fact has also been verified by the A.O. by issue of notice u/s. 133(6) of the Act. 11. The appellant company further contends that the revenue authorities have grossly erred in treating the contract for supply of equipments, Scientific Site Investigation and Provision of services as composite contract. It is the say of the Id. Senior Counsel that SECL has specifically entered into separate contract for supply of equipment and services and separate prices have been agreed for each component.
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We find force in this contention of the Id. Senior Counsel as by letter dated 02.09.2008 issued by SECL, the intention is clear to treat each contract as a separate contract. The said letter is exhibited at page 322 of the paper book. Further exhibits at pages 323 to 325 of the paper book contain Price Bid format where separate price quotes have been sought for Scientific Site Investigation, Equipment, initial spares, maintenance spares, service cost, etc. and by exhibits 326 to 328 of the paper SECL confirmed the price for each activity separately. 13. A perusal of Para 33.3 of the contract which is at page 67 o the paper book it has been specifically provided that "In case DGMS does not give approval as specified above under sub-clauses 33.1 and 33.2, this contract will not enter into force and this contract will not be effective without any obligation on the part of any party. However, the contract on Scientific Site Studies and Investigation shall come into force on signing of the contract". 14. This clause clearly proves that the contracts are separate and, therefore, there is no question of treating the contract as composite, when the parties have suo motu agreed to treat them as separate. 15. Another ground on which the income has been taxed in the hands of the appellant company is that the A.O. and the DRP held that the appellant company has a Permanent Establishment in India. The main reason for this given by the revenue authorities read as under; - "JMML has taken complete responsibilities of execution of the project right from site investigation, supply, erection and installation, semics and maintenance and training. Each assignment contract signed subsequently refers to the terms of tender issued by SECL and submission of bid by JMML. Even the scope of work to be performed by the JMML in supply contract dated 15/10/2009 includes responsibility for overall project implementation including various services. The JMML has taken the responsibilities of approval of mining equipment as well as mining method from DGMS (Director General of Mines Safety). As per Annexure-VI of supply, time schedule of the whole project, starting from signing of contract till commencement of first Annual Production period is given in a chart form. It is clear from this that site investigation contract (SIC) came into force weeks before supply contract. By virtue of signing site investigation contract, JMML (or its representatives) had all the access to the mining site. JMML had the mining site at its disposal and for the purpose of designing the mining method and equipment and for taking approval of DGMS so that equipment suitable to site may be manufactured, it has its place of management at the site. It is very important to note that access of JMML was not limited or restricted in any respect to the mining site. This constituted a fixed place permanent establishment for the JMML. RMT, which carried out site investigation activity on behalf of JMML acted as its agent to that extent along with M/s Joy Mining Services India Pvt Ltd (JMSIPL). Thus, JMML had fixed place PE in India through RMT and JMSIPL with the entire mining site at its disposal." 16. In support of this contention, reliance was placed on the decision of the Co-ordinate Bench at Chennai in the case ofAnsaldo Energia SPA 310 ITR 237.
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It is the say of the Id. D.R. that the appellant company had fixed place of business in India with the entire Mining Site at its disposal through its AE which fulfills the mandate of Article 5 of India-UK DTAA as well as business connection u/s.9(l)(i)oftheAct. 18. There is no dispute that the appellant company is a tax resident of UK and eligible to be governed by provisions of India-UK Treaty. In terms of Article 5 of India-UK Treaty, for enterprise to constitute fixed place permanent establishment, there must be a fixed place of business at the disposal of the enterprise through which the business of the enterprise is carried on. We find that the appellant company did not have any place of business/office/branch through which its business was carried on in India. The only income earned by the appellant company during the year under consideration was from supply of maintenance spares from outside India and the risk title of such goods have passed to SECL from outside India. This is clear from Para 16 of the contract at page 58 of the paper book which read as under:- Passing of Risk and Title "Risk and title to the Goods and Maintenance Spares to be supplied the Contract shall pas's to SECL upon delivery effected FOB at the foreign port of shipment." 19. And Para 17 Price and Payment Terms have been provided and it has been provided that the price for Maintenance Spares determined by SECL was calculated based on production achieved during annual production cycle. 20. The Hon'ble Supreme Court in the case of Ishikawajima-Harima Heavy Industries 288 ITR 408 had the occasion to consider the applicability of Section 9 of the Act read with Article 7 & 12 of the DTAA between Indian and Japan wherein the appellant was a company incorporated in Japan and included, interalia, in business of construction of storage tanks, engineering, etc. - it entered into an agreement with Petronet LNG Limitedfor setting up a Liquefied Natural Gas (LNG) receiving storage and degasification facility in India - the appellant was to develop, design, engineer and procure equipment, materials and supplies, to erect and construct some storage tanks. It was held by the Hon'ble Supreme Court that since the contract involved offshore supply and offshore services and since all activities in connection with offshore supply were carried out outside India, amounts receive/receivable by the appellant for offshore supply of equipments, materials, etc, cannot be deemed to accrue or arise in India. A similar view was decided in favour of the assessee by the Hon'ble High Court of Delhi in the case of Linde AG, Linde Engineering Division 365 ITR 1 wherein the Hon'ble High Court has held that where equipment and material was manufactured and procured outside India, income attributable to supply thereof could only be brought to tax if it was found that said income therefrom arose through a business connection in India. The Hon'ble High Court had to consider whether appellant's income is taxable under the Act and DTAA and the Hon'ble Court held, interalia, as under:- As far as obligations of 'I' and 'S' are concerned, the Contract is an indivisible one. However, for the purp of tax, the Contract does specify the amounts that are payable with respect to the various activities carried on 'L'/'S'. Income may accrue or arise at
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various stages and on account of varied activities. In case of a resident tax entity any income which accrues or arises from an activity outside India, would not be tax unless the same falls within the deeming provision contained in section 9(1). In these circumstances, it was not be apposite to consider the contract as a composite one for the purposes of imposition of tax under the [Para 82]. The Authority referred to the decision of the Supreme Court in the case of Vodafone International Hold B.V. v. Union of India [2012] 341 ITR 1/204 Taxman 408/17 taxmann.com 202 in support of its view that in law the liability for performance of the Contract by 'L' and 'S' was joint and severable, the contract must read as an indivisible one for the purposes of tax. [Para 83]. The approach as well as the conclusion of the Authority is flawed. The Authority erred in proceeding or basis that the contract as a whole was the subject of taxation. The subject matter of taxation was not contract between the parties but the income that the petitioner derived from the Contract. Thus, the situs of object of the Contract would not be as relevant as determining the situs where the income of 'L' had accrue arisen. By virtue of section 4, income tax is charged in respect of the total income of a person. By virtue of Section 5, the scope of total income of a non-resident is limited to income which is received or deemed to be received in India and income which accrues or is deemed to accrue or arise in India. It, therefore, follows the object of inquiry would have to be to determine whether any/income of 'L' accrued or arose in India whether any income could be deemed to accrue or arise in India. The fact that the contractual obligations were not limited to merely supplying equipment, but were for due performance of the entire Contract, was not necessarily imply that the entire income which was relatable to the Contract could be deemed to accrue arise in India. [Para 84]. " 21. The next question which was considered by the Hon'ble High Court related to the taxability of income received/receivable by Linde - (a) Design and engineering prepared solely for manufacture and/or procurement of equipment outside India (b) Supply of equipment material and spares outside India. 22. The Hon'ble Court observed as under:- 83. The Authority concluded that although, payments for each item or work were specified or that the amounts payable for the work to be performed by individual members of the Consortium was recognized under the Contract, the same would not alter the nature of the Contract in any manner. The Authority concluded that the Contract would have to be considered as one indivisible contract and the income from the same would be taxable in India as the object of Contract was to set up a facility in India. The Authority further held that the MOU entered into between Linde and Samsung could not be understood to be overwriting the Contract or the object of the Contract. With respect to the Internal Consortium Agreement the Authority held that the same was at best only an internal arrangement between Linde and Samsung and could not be referred to for determining the nature of the Contract. The Authority was of the view that the Contract being a composite contract, a 'dissecting approach' was not
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permissible. Having found that the contract was an indivisible one, the Authority concluded that it was not open for Linde to plead that the sale of equipment and machinery and designing of the project and equipment should be treated as an offshore transaction. The Authority referred to the decision of the Supreme Court in the case of Vodafone International Holdings B. V. (supra) in support of its view that since in law the liability for performance of for the purposes of tax. 84. In our view, the approach as well as the conclusion of the Authority is flawed. First of all, the Authority erred in proceeding on the basis that the contract as a whole was the subject of taxation. The subject matter of taxation was not the Contract between the parties but the income that the petitioner derived from the Contract. Thus, the situs of the object of the Contract would not be as relevant as determining the situs where the income of Linde had accrued or arisen. By virtue of Section 4 of the Act, income tax is charged in respect of the total income of a person. By virtue of Section 5 of the Act, the scope of total income of a nonresident is limited to income which is received or deemed to be received in India and income which accrues or is deemed to accrue or arise in India. It, therefore, follows that the object of inquiry would have to be to determine whether any income of Linde accrued or arose in India or whether any income could be deemed to accrue or arise in India. The fact that the contractual obligations of Linde were not limited to merely supplying equipment, but were for due performance of the entire Contract, would not necessarily imply that the entire income which was relatable to the Contract could be deemed to accrue or arise in India. 85. The principle of apportionment of income on the basis of territorial nexus is now well accepted Explanation l(a) to section 9(l)(i) of the Act also specifies that only that part of income which is attributable to operations in India would be deemed to accrue or arise in India. It necessarily follows that in cases where a contract entails only a part of the operations to be carried on in India, the assesses would not be liable for the part of income that arises from operations conducted outside India. In such a case, the income from the venture would have to be appropriately apportioned. The Supreme Court in the case of Ishikawajma-Harima Heavy Industries Ltd. (supra) had considered this aspect and held that merely because a project is a turnkey project would not necessarily imply that for the purposes of taxability, the entire contract be considered as an integrated one. The taxable income in execution of a contract may arise at several stages and the same would have to be considered on the anvil of territorial nexus. The decision in the case of Ishikawajma-Harima Heavy Industries Ltd. (supra) is clearly applicable to the facts of the present case as in that case also the contract in question was for a turnkey project where the object was to setup a Liquefied Natural Gas (LNG) receiving, storage and degasification facility. Indisputably, insofar as obligations of parties are concerned, this contract was also an indivisible contract. The Supreme Court held that for the purposes of determining the taxability, it was necessary to enquire as to where the income sought to be taxed had accrued or arisen. The impugned ruling is thus clearly contrary to the decision of the Supreme Court in Ishikawajma-Harima Heavy Industries Ltd's. case (supra).
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Heavy reliance was placed on the decision of the Hon'ble High Court of Madras in the case of Ansaldo Energia SPA 310 ITR 327. In our view the said case is clearly distinguishable on facts. In the case of Ansaldo (supra), it was held by the Madras High Court that the Indian subsidiary of Ansaldo was a legal facade which was created for taxation purposes and was not actually engaged in executing onshore contracts. In the instant case, right from the inception and as part of the documents, separate contracts have been entered into by SECL with separate contract prices. Moreover, one has to keep in mind the most important factor and that is the contract is with SECL, a Government of India undertaking. Therefore, by any stretch of imagination, it cannot be considered as a sham transaction. 24. The AO/DRP has also held that the consideration from sale of maintenance spares is royalty connected to PE in India and taxable u/s. 44DA of the Act read with Article 13 & 7 of India -UK Treaty and further considering 60% of consideration from supply of maintenance spares as the income of the assessee to be taxed in India. 25. As mentioned elsewhere, the contract has been entered into between and independent Government organization and the appellant company where the price for the product has been determined by the Government organization and at Para 11.4 of the invites of global Bids which is at page 332 of the paper book, it has been mentioned that the Bidder should quote the price for maintenance spares on the basis of cost per ton. In our understanding of the facts, the consideration is based on rate per ton is only a mode of recovering the price of product but it should not dilute the essential character of the contract. For this proposition, we draw support from the judgment of Hon'ble Supreme Court in the case of P. J. Chemicals Ltd. 210 ITR 830 in which the Hon'ble Supreme Court has laid down the ratio that the nature of transaction cannot be determined by the method in which consideration is computed. 26. Assuming, Yet not accepting the activities relating to SSI creates a PE of the appellant company in India, income of PE to be taxed in India in terms of Article 7 of India-UK Treaty would be limited to extent of activity attributable to such PE. With reference to SSI Service, JMS India has been remunerated at the market value by an independent third party, a Government of India undertaking i.e. SECL. Further, the entire income from SSI Service earned by JMS India has been offered to tax in India. Thus, there is nothing further which can be attributed to tax in India. For this proposition, we derive support from the decision of the Hon'ble Supreme Court in the case of DIT (International Taxation) vs. Morgan Stanley and Co. Inc 292 ITR 416. 27. Considering the facts in totality in the light of the judicial decisions discussed hereinabove and considering the facts in issue from all possible angles, we do not find any merit in the findings of the AO/DRP. We, therefore, set aside the findings and direct the A.O. to delete the impugned additions. The other issue relates to the levy of interest and denial of credit of TDS. Levy of interest is mandatory. We, therefore, direct the A.O. to charge interest as per the provisions of the law and so far as the denial of the credit of TDS is concerned, the A.O. is directed to decide the issue while giving effect to our findings.
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Since matter in hand is identical to the case decided by the ITAT in assessee's own case in ITA Nos. 655 & 656/Ahd/2017 dated 05/07/2017, thus, in parity with the Co- ordinate Bench judgment, we allow the appeal of the assessee.
Thus, following the above decision of the Co-ordinate Bench of this Tribunal in assessee’s own case for earlier assessment years and in the absence of any stay granted from the Hon’ble High Court of Gujarat. We are bound to follow the Co-ordinate Bench decision in assessee’s own case.
In the result, we allow the Grounds of Appeal of the assessee.
In the result, the appeal filed by the Assessee is allowed.
Order pronounced in the open court on 24 -08-2022
Sd/- Sd/- (ANNAPURNA GUPTA) (T.R. SENTHIL KUMAR) ACCOUNTANT MEMBER True Copy JUDICIAL MEMBER Ahmedabad : Dated 24/08/2022 आदेश क� ��त�ल�प अ�े�षत / Copy of Order Forwarded to:- 1. Assessee 2. Revenue 3. Concerned CIT 4. CIT (A) 5. DR, ITAT, Ahmedabad 6. Guard file. By order/आदेश से, उप/सहायक पंजीकार आयकर अपील�य अ�धकरण, अहमदाबाद