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Income Tax Appellate Tribunal, BENCH “B”, MUMBAI
Before: SHRI R.C.SHARMA & SHRI PAWAN SINGH
Revenue by : Shri Dr. Sandeep Goel (DR) Assessee by : Shri Jayant Bhatt Date of hearing: 21.03.2016 Date of order : 25.05.2016 O R D E R PER PAWAN SINGH, JM: 1. These two appals are filed by the Revenue in respect of Assessment Year (AY) 2009-10 & 2010-11 respectively against the order of Commissioner of Income Tax (Appeals), Mumbai (for short CIT(A), dated 30.03.2012 were heard together and being decided by common order as identical grounds of appeal are raised in both the appeals. Ground of appeal for AY-2009-10 are as under: 1 (i) The Ld. CIT(A) erred on facts and in law in not appreciating the correct nature of the expenses incurred on outsourcing of manpower supply, whereas such expenses, in substance and effect, are in nature of fees for technical and professional services within the meaning of section 194J of the Income-tax Act, 1961. (ii) The Ld. CIT(A) has erred on facts and in law in deleting the interest of Rs. 31,12,322/- without properly appreciating the factual and legal matrix of the case as clearly brought out by the Ld. AO in order u/s. 201(1A) of the Income-tax Act, 1961. (iii) The Ld. CIT(A) has erred on facts and in law in directing the AO to examine the issue pertaining to the payment of national roaming charges and inter connection charges in the light of Supreme Court decision in the case of CIT vs. Bharti Cellular Ltd. as reported in 319 ITR 139, setting aside this issue in substance and in effect. As CIT(A) has no power to set aside an assessment, his decision in respect of setting aside of roaming charges and inter connection charges are erroneous in law and on facts and may be deleted and AO’s finding be upheld.
2. The applicant craves leave to amend or alter any ground or add a new ground which may be necessary at the time of the hearing of the case thereafter.
3. The order of the CIT(A) being erroneous be set aside and Ld. AO’s order be restored.
2. The brief facts of the case are that a survey u/s. 133A of the Act was conducted on 14.01.2010 and 15.01.2010 and in survey it was found that assessee had failed to deduct TDS on the following payments:- Payments Heads Amount of Payments Amount of TDS required IUC Charges Rs. 86,41,21,222 Rs.9,79,04,934 Roaming charges Rs.128,74,72,326 Rs.14,58,70,615 Margin to distributors Rs. 150,94,91,627 Rs. 17,10,25,401 Outsourcing expenses Rs. 11,68,57,985 Rs. 1,05,99,010 deducted u/s 194C
instead of 194J Total Rs.42,53,99,960
And vide order dated 02.03.2010 the assessee was held in default for TDS of Rs. 42,53,99,960/-. Thereafter, AO issued a notice u/s. 201(1A) on 26.10.2010 to compute the interest in respect of defaulted amounted on account of TDS. And after taking into account of all facts the AO calculated interest u/s. 201(1A) at Rs.7,93,69,592/- in its order dated 12.01.2011, making the following calculation:- Payment Head Amount of Amount of TDS Amount of interest payment Required u/s 201(1A) 1 IUC Charges Rs. 86,41,21,222 Rs.9,79,04,934 Rs. 1,67,74,176 2 Roaming Rs.128,74,72,326 Rs.14,58,70,615 Rs. 2,66,85,704 charges 3 Margin to Rs.150,94,91,627 Rs.17,10,25,401 Rs. 3,27,97,390 distributors 4 Outsourcing Rs. 11,68,57,985 Rs. 1,05,99,010 Rs. 31,12,322 expenses deducted u/s 194C instead of 194J Total Rs.42,53,99,960 Rs.7,93,69,592
Aggrieved by the order of AO, dated 12/01/2011, assessee filed appeal before CIT(A). The Ld. CIT(A) while hearing the appeal categorized the various issue in four categories:
1. 1. Interest u/s. 201(1A) in respect of non-deduction of tax at source on inter usage charges.
2. Interest u/s. 201(A) in respect of non-deduction of tax on roaming charges.
3. Interest u/s. 201(A) in respect of non-deduction of tax on margin to distributor (prepared parts).
4. Interest u/s. 201(A) in respect of non-deduction of tax on man power supply u/s. 194J as against assessee-company was deducting TDS u/s.194C.
The Ld. CIT(A) while passing order on the appeal of assessee observed from the record that an appeal was preferred by assessee against the order u/s. 201(1) of the Act, dated 02/03/2010 and same was decided vide order dated 17.02.2011, wherein issue at Sl. Nos. 1 & 2 were referred back to AO , issue at Sl. No.3 was decided in favour of Revenue and issue at Sl. No. 4 was decided in favour of the assessee.
The ld. CIT(A) while passing order in the said appeal also observed that with regard to first and second issues i.e. Inter Connect Usage Charges and Roaming charges the AO is directed to take the fresh decision on the applicability of Section 194J to such payments in accordance with the direction of Hon’ble Supreme Court Judgement in CIT Vs Bharti Cellular dated 12August ,2010 and in third issue i.e. Margin to Distributors( prepaid cards) confirmed the action of AO and for fourth issue of TDS on payments in respect of Manpower Supply Charges was decided in favour of Assessee and deleted the demand. However in the meantime order u/s 201(1A) dated 12.01.2011, was passed by AO, who calculated interest on the alleged amount due on account of non deduction of TDS. Aggrieved by the order of AO assessee filed appeal before CIT(A), wherein the appeal of the assessee was partly allowed following the order dated 17/02/2011, against which the present appeal is filed before us. 7. We have heard ld AR for the parties and perused the material available on record. Ld AR for the assessee argued that against the order of CIT(A) dated 17/02/2011, both the parties filed appeal before ITAT in respect of both the assessment year which were registered as and was decided vide order dated 13/04/2013, wherein all the addition made u/s 201 of the Act, has been deleted/ confirmed and the appeal filed
by revenue is dismissed by the coordinate bench of this Tribunal. In such circumstances the order passed u/s 201(1A) does not survive. Ld. DR for revenue has also accepted the contention of the assessee. Copy of the order passed in 3682, 3877 & 3878/Mum/2011is placed on record. We have carefully gone through the order dated 13/04/2013 passed in ITA No. 3981,3682,3877&3878/Mum/2011, by the coordinate bench of this Tribunal and find that all the addition on account of holding the assessee in default for TDS has been deleted. Hence keeping in view the direction contained in the order dated 13/04/2013, all the grounds raised in the present appeal by Revenue became infructuous, and consequent upon the present appeal is dismissed.
8. Now we shall take up appeal ITA No. 4199/M/2012, for AY 2010-11 the grounds raised in this appeal are identical to the appeal No. 4198/M/2012; hence this appeal of the Revenue is also dismissed.
9. In the result, the both the appeal filed by the Revenue are dismissed.
Order pronounced in the open court on this 25th May, 2016.