DCIT 13(1)(2), MUMBAI vs. PINSTROM TECHNOLOGIES P.LTD, MUMBAI

Assessee by: Shri Haridas Bhat (AR) Department by: Shri T.A. Khan (DR) Date of Hearing: 05.02.2018 Date of Pronouncement: 14.02.2018 O R D E R

PER AMARJIT SINGH, JM:

Whether, on the facts and in circumstances of the case and in law, the Ld. CIT(A) was justified in deleting the disallowance u/s. 40(a)(ia)holding that the amount paid by the assesses to Google Ireland Ltd. for uploading and display of banner advertisement was not in the nature of rendering of royalty but was for rendering A.Y. 2012-13 of business profit of M/s Google Ireland Ltd. and in the absence of any PE of M/s Google Ireland Ltd. in India, the same is not chargeable to Tax in India". "Whether, On the facts and in the circumstances of the case and in law, the Ld. CIT(A] is justified in deleting the disallowance and passing the Judgment on the basis of Hon'ble ITAT decision in case of M/s. Yahoo India Pvt. Ltd. in ITA No. 506/Mum/2008. 3} The appellant prays that the order of the CIT (A) on the above ground be set aside and that of the Assessing Officer be restored. 4) The appellant craves leave to amend or alter any grounds or add a new ground which may be necessary.”

3. The brief facts of the case are that the assessee filed its return of income on 30.09.2012 declaring total income to the tune of Rs.17,41,270/-. Thereafter the assessee filed the revised return on 26.09.2013 declaring total loss to the tune of Rs.36,65,116/-. The revised return was filed on account of financial difficulties and lack of proper staff and the audit cannot be completed well in time. The return was processed u/s 143(1) of the I.T. Act, 1961. Thereafter, the case was selected for scrutiny and notice u/s 143(2) of the Act dated 10.09.2013 was issued and served upon the assessee. Notice u/s 142(1) of the Act dated 24.07.2014 was issued and served upon the assessee. The assessee is engaged in the business of search engines, marketing through internet consisting of generating clicks, links, visits through internet with clients. On verification, it was found that the assessee did not deduct the TDS on an amount of Rs.1,01,02,632/- on the payment made to the Foreign Vendors. Notice was given and after the reply, an amount of Rs.1,01,02,632/- was disallowed and added to the income of the assessee. AIR mismatch to the tune of Rs.1,03,285/- ITA. No.4937/M/2016 A.Y. 2012-13