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Income Tax Appellate Tribunal, “L” BENCH, MUMBAI
Before: SHRI SHAMIM YAHYA, AM & SHRI RAVISH SOOD, JM
आदेश / O R D E R
PER RAVISH SOOD, JUDICIAL MEMBER:
The present appeal filed by the assessee is directed against the order passed by the CIT(A)-55, Mumbai dated 10.06.2016, which in itself arises from the order passed by the A.O under Sec. 143(3) of the Income Tax Act, 1961 (for short ‘Act’), dated 27.01.2016. The assessee had assailed the order of the CIT(A) by raising before us the following grounds of appeal:
P a g e | M/s Aktiebolaget SKF Vs. The Deputy Commissioner of Income-tax (IT) “The appellant objects to the order dated 10 June 2016 (impugned order) passed by the Commissioner of Income Tax Appeals-55 [CIT(A)] on the following amongst other grounds. Each of the following grounds of appeal is without prejudice to the other:
1. The learned CIT(A) erred in confirming levy of surcharge of Rs.39,58,231/- and education cess of Rs.24,93,685/- on the income- tax liability of Rs.7,91,64,618/- determined as per Article 12(2)of the India - Sweden tax treaty.
2. The learned CIT(A) ought to have appreciated that the tax rate determined under a tax treaty cannot be further increased by surcharge and education cess. The appellant relies on the decisions of the Mumbai Tribunal in the case of Parke Davis and Company LLC (62 SOT 282) and Sunil V. Motiani v. ITO (59 SOT 37).
3. The learned CIT(A) erred in confirming levy of interest of Rs.23,64,400/- under section 234 B of the Act. The appellant denies liability to interest under section 234B of the Act.
4. The learned CIT(A) erred in confirming levy of interest of Rs.2,59,570/- under section 234C of the Act. The appellant denies liability to interest under section 234C of the Act. The appellant craves leave to add to, alter, amend, vary, omit or substitute the aforesaid grounds of appeal or add a new ground or grounds of appeal at any time before or at the time of hearing of the appeal as it may be advised.”
2. Briefly stated, the facts of the case are that the assessee which is a foreign company had filed its return of income for A.Y 2012-13 on 30.11.2012, declaring a total income of Rs.80,47,65,820/-. The return of income was thereafter revised by the assessee on 30.03.2013 at an income of Rs.79,16,46,179/-. The case of the assessee was selected for scrutiny assessment under Sec. 143(2) of the Act. Order under Sec. 143(3) was passed on 27.01.2016, determining the total taxable income of the assessee at Rs.79,16,46,179/- and the tax liability was worked out at Rs.77,63,930/. The A.O while computing the tax liability of the assessee charged surcharge of Rs.39,58,231/- and education cess of Rs.24,93,685/- on the income tax liability of Rs.7,91,64,618/- determined as per Article 12(2) of the India- Sweden Tax Treaty. Still further, the A.O also levied interest under Sec.234B and 234C of Rs.23,64,400/- and Rs.2,59,570/-, respectively.
3. The assessee carried the matter in appeal before the CIT(A). The assessee claimed before the CIT(A) that its income was assessed as Royalty and FTS as per Article 12(2) of the tax treaty and as the applicable rate of P a g e | M/s Aktiebolaget SKF Vs. The Deputy Commissioner of Income-tax (IT) tax for Royalty and FTS was 10%, hence no surcharge and cess could be levied over and above the tax rate contemplated in the tax treaty. It was also claimed by the assessee that interest under Sec.234B and 234C had erroneously been charged. However, the CIT(A) while disposing off the aforesaid contentions so raised by the assessee before him, directed the A.O to levy surcharge and education cess, as well as and charge interest under Sec. 234B and 234C, as per law, while giving effect to his appellate order.
4. Aggrieved, the assessee had carried the matter in appeal before us. The ld. Authorized Representative (for short ‘A.R’) at the very outset of the hearing of the appeal submitted that the assessee had also assailed the levy of surcharge and education cess, as well as charging of interest under Sec.234B and 234C by way of a rectification application filed under Sec. 154 of the Act with the A.O on 11.01.2018. It was submitted by the ld. A.R that as the A.O, vide his order dated 03.01.2018 had allowed the appropriate relief and accepted the aforesaid contentions so raised by the assessee, therefore, the appeal filed before us would be rendered as infructuous. We thus, in the backdrop of the aforesaid submissions made by the ld. A.R before us, dismiss the appeal filed by the assessee as having been rendered as infructuous. 5. The appeal of the assessee is dismissed as having been rendered as infructuous in terms of our aforesaid observations. Order pronounced in the open court on 25.05.2018 Sd/- Sd/- (Shamim Yahya) (Ravish Sood) ACCOUNTANT MEMBER JUDICIAL MEMBER भुंफई Mumbai; ददनांक 25.05.2018 Ps. Rohit P a g e | M/s Aktiebolaget SKF Vs. The Deputy Commissioner of Income-tax (IT)