ITO, INTERNATIONAL TAXATION WARD-KOLKATA,KOLKATA vs. M/S AT & S INDIA PVT. LTD.,

IN THE INCOME TAX APPELLATE TRIBUNAL KOLKATA ‘C’ BENCH, KOLKATA [Before Sri J. Sudhakar Reddy, Accountant Member & Sri Aby T. Varkey, Judicial Member] Assessment Year: 2004-05 Income Tax Officer (International Taxation, Ward –Kolkata….……………….……..Appellant Aayakar Bhawan(Poorva) 2nd Floor 110, Shantipally Kolkata – 700 107 [PAN : AAECA 2930 J] M/s. AT & S India Pvt. Ltd……………………….……….………..…..……………………………..Respondent 12/A, Industrial Area Nanjanud Mysore District Karnataka - 571301 Appearances by: Shri S.C. Giri, C.A, appeared on behalf of the assessee. Shri N.B. Som, Addl. CIT, Sr. Dr, appearing on behalf of the Revenue. Date of concluding the hearing : April 4th, 2018 Date of pronouncing the order : April 13th, 2018 O R D E R Per J. Sudhakar Reddy :-

This appeal filed by the assessee is directed against the order of the ld. Commissioner of Income Tax (Appeals)-4, Kolkata (hereinafter the ‘ld. CIT (A)’), passed u/s 250 of the Income Tax Act, 1961 (the ‘Act’), dt. 08/06/2016, for the Assessment Year 2004-05, wherein he held that the action of the Assessing Officer in directing the assesse to deduct tax at source @ 10% US $ 544,494/-, in an order passed u/s 195(2) of the Act, on 18/11/2004, is bad in law.

2. The grounds of the appeal of the revenue are as follows:- “(1) Whether, in the facts and circumstances of the case, the Learned CIT (A) erred in giving relief to the assessee by holding that payment of US $ 174995 should not be subject to TDS u/s 195 of the Income Tax Act, 1961? (2) Whether, in the facts and circumstances of the case, the Learned CIT (A) erred in Law in holding that the decision of the Appellate Commissioner on the issue of disallowance under section 40(a)(i) of the Income Tax Act, 1961 on the issue of warranty cost ipso facto makes the reasoned order u/s 195(2) otiose?

Assessment Year: 2004-05 M/s. AT & S India Pvt. Ltd

(3) Whether, in the facts and circumstances of the case, the Ld. CIT(A) erred in not appreciating that the services rendered by M/s. AT& S Austria for rectification of defects and carrying out certain processes are in the nature of Fee for Technical services, in terms of section 9(1)(vii) of the Income Tax Act, 1961 read with Article 12 of India- Austria DTAA? (4) Whether in the facts and circumstances of the case, the learned CIT (A) erred in not appreciating that the order u/s 195(1) of the Income Tax Act, 1961 tentatively determines that the income of the deductee is chargeable to tax and the applicant was not prejudicially affected by the order of the Assessing Officer. (5) The Department craves leave to add to and to alter, amend, rescind or modify the grounds raised hereinabove before or at the time of hearing of the appeal.”

3. After hearing rival submissions, we find that the Kolkata ’B’ Bench of the ITAT in the assessee’s own case in Assessment Year 2005- 06, ITA No. 186/Kol/2011, Assessment Year 2005-06, ITA No. 2071/Kol/2010; Assessment Year 2006-07 & ITA No. 779/Kol/2012; Assessment Year 2007-08, order dt. 29/01/2015, on the very same issue has at para 7 page 17 of his order held as follows:- “As the facts are similar for the AY 2005-06 considering the fact that for the AY 2004-05 the AO has accepted the claim of the assessee that the reimbursement of the warranty expenses is not liable for TDS u/s 195 of the Act and as the Revenue has not been able to dislodge this finding, the finding of CIT(A) deleting the disallowance made on account of non- deduction of TDS in respect of warranty expenses stands confirmed. This issue of revenue’s appeal is dismissed.”

4. As the facts are similar for the Assessment Year 2005-06, we are in consonance with the aforesaid decision of the Tribunal. In view of the above, the order of the ld. First Appellate Authority is upheld and this appeal of the revenue is dismissed.

5. In the result, appeal of the revenue is dismissed. Kolkata, the 13th day of April, 2018. Sd/- Sd/- [Aby T. Varkey] [J. Sudhakar Reddy] Judicial Member Accountant Member Dated : 13.04.2018 {SC SPS}

Assessment Year: 2004-05 M/s. AT & S India Pvt. Ltd Copy of the order forwarded to: 1. Income Tax Officer (International Taxation, Ward –Kolkata Aayakar Bhawan(Poorva) 2nd Floor 110, Shantipally Kolkata – 700 107