ACIT 20(3), MUMBAI vs. SHM SHIPCARE, MUMBAI

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ITA 14/MUM/2015Status: DisposedITAT Mumbai24 November 2016AY 2010-113 pages

In favour of the assessee: the Revenue's appeal was dismissed. From the AI summary of this appeal.

AI SummaryDismissed

What did the Tribunal hold?

The Tribunal followed its own earlier decision in the assessee's own case, which held that no TDS was required for such payments as they were reimbursements of actual expenditure and the non-residents had no Permanent Establishment in India. The disallowance was therefore deleted.

What were the facts?

The Revenue appealed against the CIT(A)'s order deleting the disallowance of training fees and royalty payments for non-deduction of TDS. The disallowance was made under Section 40(a)(ia) of the Income Tax Act.

What were the issues?

Whether disallowance of training fees and royalty payments under Section 40(a)(ia) is justified when no TDS was deductible at the time of payment due to lack of chargeability or PE in India.

Which sections of the Income-tax Act were involved?

Section 40(a)(ia),Section 195,Section 9

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, “E” BENCH, MUMBAI

For Respondent: DR Assessee by

O R D E R

PER MAHAVIR SINGH, JM:

1.

This appeal by the Revenue is arising out of the order of CIT (A)-29, Mumbai in appeal No. CIT(A)-29/RG-17/52/13-14 dated 14-10-2014. The Assessment was framed by JCIT-17(1), Mumbai for the A.Y. 2010-11 vide order dated 28-03-2013 u/s 143(3) r. w. s. 154 of the Income Tax Act, 1961 (hereinafter ‘the Act’).

2.

The only issue in this appeal of Revenue is against the order of CIT(A) deleting the disallowance of expenses on payment of training fees royalty amounting to Rs.26,17,330/- and Rs.11,77,864/- respectively for non-deduction of TDS by invoking the provision of Section 40(a) (ia) of the Act. For this Revenue has raised following ground No. 1: - “1. On the facts and in the circumstances of the case, the Ld. CIT(A) erred in deleting the addition on Rs.26,17,330/- (out of total of Rs.30,04,839/) and Rs. 1177,864/- made u/s 40 (a) (ia) on account of non deduction of TDS on payment for training fees and royalty ignoring the decision of Hon’ble ITAT, Mumbai in the case of Satellite Television Asia Region Ltd. Vs. DCIT (2006) 99 ITD 914 (Mum) which holds that section 195 of the IT Act lays emphasis on chargeability rather than source of payment.”

3. At the outset learned Counsel for the assessee filed copy of Tribunal order in assessee’s own case in for the A.Y. 2008-09 vide order dated 10-02-2016 wherein exactly identical issue is dealt with as regards to the payment of training fees, service fees and royalty payments for the subject matter as in the present case and Tribunal has deleted the disallowance by observing as under: -

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