ACIT, C-5(1), CHANDIGARH vs. M/S IDS INFOTECH LTD., CHANDIGARH

IN THE INCOME TAX APPELLATE TRIBUNAL DIVISION BENCH ‘A’, CHANDIGARH

BEFORE SHRI SANJAY GARG, JUDICIAL MEMBER AND DR. B.R.R. KUMAR, ACCOUNTANT MEMBER ITA No. 399/Chd/2018 (Assessment Years: 2007-08) The ACIT Vs. M/s IDS Infotech Ltd. C-5(1) I-8, Rajiv Gandhi, I T Park Chandigarh Chandigarh PAN: AAACI4364E

(Appellant) (Respondent)

Assessee by : Shri. Tej Mohan Singh Department by : Shri. Chandrakanta

Date of hearing : 07/08/2018 Date of Pronouncement : 31/08/2018

O R D E R PER DR.B.R.R.KUMAR, A.M. :

The present appeal has been filed by the Revenue against the order of

the Ld. CIT(A)-2, Chandigarh dt. 24/01/2018.

appeal:

(i) Whether on the facts and circumstances of the case, the Ld. CIT(A) has not erred in law as well as on the facts in deleting the addition of Rs. 10,04,846/- made by the AO by invoking the provisions of Section 36(i)(iii) of the Act in view of judgment of Abhishek Industries Ltd. (2006) 286 ITR 1(P&H) without appreciating the fact that commercial expendiency as envisaged by the Hon'ble Supreme Court in the case of M/s Hero Cycles Pvt. Ltd. Vs CIT 379 ITR 347 (SC) has not been proved by the assessee?

(ii) Whether on the facts and circumstances of the case, the Ld.CIT(A) has not erred in law as well as on the facts in deleting the addition of Rs.97,65,000/- which was made by invoking the provisions of Section 40(a)(ia) as the assessee has failed to deduct tax at sources u/s 195 of the Act on the payments made to non residents without appreciating the fact that income accrued in India as per provisions of Section 9(l)(vii) of the I.T.Act,1961 ?

(iii) It is prayed that the order of Ld. CIT(A) be set aside and that of the Assessing officer may be restored.

36(1)(iii) of Rs. 10,04,846/-. The background of the case and the ratio relied upon

by the Ld. CIT(A) as enumerated is reproduced hereunder:

6.1 Brief facts of the case is that the assessee has claimed financial charges of Rs. 71,63,000/- and also shown secured loans of Rs. 4,61,71,000/- in the balance sheet. The assessee has made substantial investment abroad amounting to Rs. 64,77,000/-. The assessee was specifically asked to provide the business purpose of the above said advances given and why the proportionate interest u/s 36(1)(iii) of the Act should not be disallowed. However no proof of the same was provided by the assessee. No commercial expediency was established by the assessee company for making these investments. The assessee could not fulfill the conditions laid down u/s 36(1)(iii) of the Act and merely stated that funds advanced to its subsidiaries have been used by them for some business purposes. As a result, the assessing officer disallowed the interest paid u/s 36 (1)(iii) of the Act and added Rs. 10,04,846/-to the returned income of the assessee.

6.2 AR of the assessee filed written submission, in which he has reproduced the extract of ITAT order in the case of assessee for A Y 2009-10 on the said matter The relevant portion of the submission is reproduced as under:-

Aggrieved by this, the assessee has come up in appeal before us and reiterated the submissions made before the learned CIT (Appeals). It was stated that the assessee company is engaged in the business of export of Information Technology Services and Software Development. The wholly owned subsidiaries of the assessee to whom the money has been advanced are providing market support to the assessee. Reliance was placed on the judgment of the Hon'ble Supreme Court in the case of Hero Cycles (P) Ltd Vs CIT 379 ITR 347 (SC) and that of Hon'ble Punjab & Haryana High Court in the case of Bright Enterprises Pvt. Ltd Vs. CIT [2016] 381 ITR 107 and CIT Vs Kapsons Associates (2016) 381 ITR 204 (P&H)

6 The learned D.R while arguing before us stated that since the interest bearing funds have been advanced to the wholly owned subsidiaries abroad and interest expenditure on account of such funds, which has been raised from the bank, has been claimed by the assessee in its Profit & Loss Account. Under these circumstances a duty is cast on the assessee to establish that such interest bearing funds advanced to the wholly owned subsidiaries is for the purpose of business as provided under section 36(1)(iii) of the Act The assessee had failed to establish any nexus between the borrowed funds to the application of these funds that the same are for the purpose of business. Reliance was placed on the judgment of the Hon'ble Supreme Court in the case of Hero Cycles (P) Ltd (supra) for the proposition that the assessee has to demonstrate with the facts and figures that the loans advanced fulfill the criteria of commercial expediency.

certain observations made by the Hon'ble Supreme Court in the case of S.A. Builders Limited Vs CIT (2007) 288 I T R 1 (SC) In this case, while interpreting the meaning of the word 'commercial uxpodioncy', the Hon'ble Apex Court held as under:

"32 We wish to make it clear that it is not our opinion that in every case interest on borrowed loan has to be allowed if the assessee advances it to a sister-concern. It all depends on the facts and circumstances of the respective case. For instance, if the directors of the sister-concern utilize the amount advanced to it by the assessee for their personal benefit, obviously it cannot be said that such money was advanced as a measure of commercial expediency. However, money can be said to be advanced to a sister-concern for commercial expediency in many other circumstances (which need not be enumerated here). However, where it is obvious that a holding company has a deep . interest in its subsidiary, and hence if the holding company advances borrowed money to a subsidiary and the same is used by the subsidiary for some business purposes, the assessee would, in our opinion, ordinarily be entitled to deduction of interest on its borrowed loans."

8 In view of the above, we observe that even the Hon'ble Supreme Court has endorsed the view that since a holding company has a deep interest in its subsidiary and if the holding company advances borrowed money to a subsidiary and the same is used by the subsidiary for some business purposes, the assessee is entitled to deduction of interest on the borrowed funds. In the present case, there is no dispute about the fact that the amounts have been advanced to the wholly owned subsidiaries of the assessee company and there is no fact brought on record by any of the lower authorities that the amounts have been used by these subsidiary companies for any purpose other than their business purposes. In view of this, we are inclined to hold that the amounts given to subsidiary companies were on account of commercial expediency. Therefore, no disallowance invoking the provisions of section 36(1)(iii) of the Act can be made in this case. The ground No. 1 raised by the assessee is allowed."

6.3 I have given careful consideration to the facts of the case and the decision of Hon'ble ITAT in the case of assessee for A.Y 2009-10 and A Y 2010-11. Similar issue was raised in appeal in A.Y 2009-10 & 2010-11 which was confirmed by the then CIT(A)-2, Chandigarh. The assessee went in appeal before ITAT against the order of the assessee, and it was decided in the favour of the assessee vide order no. 52/CHD/2016 dated 24.05.2016 and 130/CHD/2016 dated 14.12.2016. Respectfully, following the decision of Hon'ble ITAT in the assessee's own case , the addition ofRs. 10.04.846/- is deleted.

observations of the Assessing Officer and of the Ld. CIT(A).

in assessee’s own case, in the absence of any other new material or arguments

taken by both the parties which can differentiate from the facts and

circumstances of earlier years, we refrain to interfere in the order of the Ld.

CIT(A).

account of commission, legal and professional charges, marketing and dolling

expenses and outstanding and business development expenses. The

background of the case and the ratio relied upon by the Ld. CIT(A) as

enumerated is reproduced hereunder:

7.1 Brief facts of the case are that the assessee company is receiving software related services and making payments on account of professional services and making huge payments on account of professional services, technical services, marketing and selling expenses, consulting services, software usage expenses to various companies in abroad which are its associated enterprises AO noted that the assessee has made payments amounting to Rs. 97,65,000/- to various companies outside India without deducting TDS.As the assessee company has failed to deduct IDS on the said-payments, as a result, the assessing officer disallowed the expenditure of RS. 97,65,000/- u/s 40(a)(ia) on account of commission, legal and professional charges, marketing and selling expenses and outstanding and business development expenses.

7.2 AR of the assessee filed written submission, in which he has reproduced the extract of ITAT order in the case of assessee for A.Y 2009-10 & 2010-11 on the said matter The relevant portion of the submission is reproduced as under:-

2 5 . T h e ba si c i s s u e is wh e t h er t he t a x i s t o b e d e d uct ed wh i l e m aki n g t he s e i m pu g n ed pa ym ent s. T he A s s e s si ng Of f i ce r ha s i n v ok e d t h e pr ovi si on s of s e ct i on 40 (a )(i ) o f t h e A ct i n t hi s re g ar d. T h e p r o vi sio n s of s ect i o n 40 (a)(i ) of t h e Act t o t he e xte nt r el ev ant i n t he p re s ent c as e rea d s a s u n d er : “ 40(a)(i) Notwithstanding anything to the contrary in [sections 30 to 38], the following amounts shall not be deducted in computing the income chargeable under the head "Profits and gains of business or profession": (a) in the case of any assessee— [(i) any interest (not being interest on a loan issued for public subscription before the 1st day of April, 1938), royalty, fees for technical services or other sum chargeable under this Act, which is payable,— (A) outside India; or (B) in India to a non-resident, not being a company or to a foreign company, on which tax is deductible at source under Chapter XVII-B and such tax has not been deducted or, after deduction, has not been paid [during the previous year, or in the subsequent year before the expiry of the time prescribed under sub- section (1) of section 200]: [Provided that where in respect of any such sum, tax has been deducted in any subsequent year or, has been deducted in the previous year but paid in any subsequent year after the expiry of the time prescribed under sub-section (1) of section 200, such sum shall be allowed as a deduction in computing the income of the previous year in which such tax has been paid.] Explanation : For the purposes of this sub-clause,— (A) "royalty" shall have the same meaning as in Explanation 2 to clause (vi) of sub- section (1) of section 9; (B) "fees for technical services" shall have the same meaning as in Explanation 2 to clause (vii) of sub-section (1) of section 9; 2 6 . T h e m o st i m p ort a nt t e rm s i n t h e pr o vi si on s of t hi s s e ct i on ar e ‘ on wh i ch t a x i s de du ct i bl e at s o u rc e ’ u n d er C h apt er - X VII, m eani ng t h er eb y t h at o nl y t h o s e pa ym e nt s

m a de t o n on - r e sid e nt s on whi ch t a x i s r eq ui re d t o be d e d uct ed a s p r ovi d e d u nd e r t h e r el ev ant C ha pt er, t he p r o vi si on s of t hi s se ct i on can be i nv ok e d. Ch apt er- X VII d ea l s wi t h c o ll ect i on and r ec o v er y of t a xe s wh i l e pa rt -B of t hi s C h apt er d ea ls wi t h t ax d ed u ct i on at s o u rc e, t he p r ovi si o ns r el at i ng t o t ax t o be d ed u ct e d o ut of p a ym e nt m a de t o a n o n- r e si d ent ar e p r o vi de d i n s ect i o n 1 9 5 of t he A ct , whi ch r ea d a s u n d er : “195(1) Any person responsible for paying to a non- resident, not being a company, or to a foreign company, any interest (not being interest on securities) or any other sum chargeable under the provisions of this Act (not being income chargeable under the head" Salaries" ]) shall, at the time of credit of such income to the account of the payee or at the time of payment thereof in cash or by the issue of a cheque or draft or by any other mode, whichever is earlier, deduct income- tax thereon at the rates in force: ” 2 7 . T h e m o st i m po rt ant t erm s i n t hi s s e ct i o n a r e “ ch ar ge abl e u n de r t he p r ovi si on s of t hi s A ct ” . F r om t his, i t i s v e r y cl ea r t h at on l y i f an am o u nt i s ch ar ge abl e u nde r t he I nc om e T a x Act , t he li abi lit y t o d ed u ct t a x on t h e pa ym e nt of s u c h am o unt ari s e s. C h ar ge of i nc om e t ax i s p r o vi de d u n d er s e ct i on 4 of t h e Act , whi l e sc o pe of t ot al i nc om e i s p r ovi d e d i n s ect i o n 5 of t h e A ct . Th e p r o vi si ons o f s e cti on 5 of t he A ct r el at i ng t o s c op e of t ot al i n c om e i n re s p ect of a n on- resi de nt a r e p r ovi d ed i n s ub - s ect i o n ( 2 ) of sai d s e ct i on, whi c h r ea d as u n d er : “5(2) Subject to the provisions of this Act, the total income of any previous year of a person who is a non- resident includes all income from whatever source derived which-

(a) is received or is deemed to be received in India in such year by or on behalf of such person; or (b) accrues or arises or is deemed to accrue or arise to him in India during such year. Explanation 1-Income accruing or arising outside India shall not be deemed to be received in India within the meaning of this section by reason only of the fact that it is taken into account in a balance sheet prepared in India. Explanation 2.- For the removal of doubts, it is hereby declared that income which has been included in the total income of a person on the basis that it has accrued or arisen or is deemed to have accrued or arisen to him shall not again be so included on the basis that it is received or deemed to be received by him in India.” 2 8 . F r om t he ba re p er u s al of t h e pr o visi on s of t he a b o ve s ect i on, i t i s q ui t e cl ea r t hat a n on- r esi de nt i s c ha rg ea bl e t o t ax i f i t re cei v e s o r d e em e d t o r ec ei ve a n y am o u nt i n I ndi a. T h e p r o vi si on s em e r gi ng f r om t h e an al ysi s a r e v er y cle ar t h at, wh e n i nc om e acc r u e s, a ri s es o r r ecei ve d i n In di a, t he s ame i s t ax abl e. Inc om e whi ch i s de em e d t o a cc r u e or ari s e i n In di a i s t ax abl e i n In di a, e ve n if t he sam e i s n ot a ct u all y a cc r ue s, a ri se s or re cei ve s i n Indi a . 2 9 . I n t he p r e se nt ca se, t hi s i s n ot i n di sp ut e t hat t he am o u nt i s n ot re cei ve d or de em e d t o b e r ec ei ve d i n I ndi a. T h e s ec o nd si t uat io n u n de r wh i ch t he r e cei pt of n o n- re si d ent i s t ax abl e i s i f t h e i nc om e acc r u e s or a ri s e s o r i s d eem e d t o a cc r u e o r a ri se i n In di a. U nd o u bt e dl y, i n t he p re s ent c as e no i nc om e ha s acc r u ed t o t he n on- r esi de nt p er s o n i n In di a. T h e di sp ut e m a y b e on l y wi t h r eg ar d t o t h e i m p u gn ed am ount b ei ng i nc om e ‘d eem e d t o acc r u e or a ri s e i n In di a’ . V a ri o u s i nst anc e s of i nc om e c on si d er e d t o be d e em ed t o acc ru e o r a ri s e i n In di a t o a n on - r e si dent a r e p r o vi de d i n se ct i on 9 of t h e Inc om e T ax Act . F o r t h e p u rpo s e of a dj u di cat i ng t h e i s s u e s a ri si ng i n t he p re s ent app eal, t h e rel e va nt pr o vi si o ns a r e t h at of s ect i o n 9 ( 1 )(i ) of t he Act , wh i ch r ea d a s u nde r : “9 (1) The following incomes shall be deemed to accrue or arise in India—

(i) all income accruing or arising, whether directly or indirectly, through or from any business connection in India, or through or from any property in India, or through or from any asset or source of income in India, 135[***] or through the transfer of a capital asset situate in India; [Explanation 1]: For the purposes of this clause— (a) in the case of a business of which all the operations are not carried out in India, the income of the business deemed under this clause to accrue or arise in India shall be only such part of the income as is reasonably attributable to the operations carried out in India; (b) in the case of a non-resident, no income shall be deemed to accrue or arise in India to him through or from operations which are confined to the purchase of goods in India for the purpose of export; [* * * *] [(c) in the case of a non-resident, being a person engaged in the business of running a news agency or of publishing newspapers, magazines or journals, no income shall be deemed to accrue or arise in India to him through or from activities which are confined to the collection of news and views in India for transmission out of India;] [(d) in the case of a non-resident, being— (1) an individual who is not a citizen of India; or (2) a firm which does not have any partner who is a citizen of India or who is resident in India; or (3) a company which does not have any shareholder who is a citizen of India or who is resident in India, no income shall be deemed to accrue or arise in India to such individual, firm or company through or from operations which are confined to the shooting of any cinematograph film in India;] [Explanation 2 : For the removal of doubts, it is hereby declared that "business connection" shall include any business activity carried out through a person who, acting on behalf of the non-resident, (a) has and habitually exercises in India, an authority to conclude contracts on behalf of the non-resident unless his activities are limited to the purchase of goods or merchandise for the non-resident; or (b) has no such authority, but habitually maintains in India a stock of goods or merchandise from which he regularly delivers goods or merchandise on behalf of the non-resident; or (c) habitually secures orders in India, mainly or wholly for the non-resident or for that non-resident and other non-residents controlling, controlled by, or subject to the same common control, as that non-resident: Provided that such business connection shall not include any business activity carried out through a broker, general commission agent or any other agent having an independent status, if such broker, general commission agent or any other agent having an independent status is acting in the ordinary course of his business : Provided further that where such broker, general commission agent or any other agent works mainly or wholly on behalf of a non-resident (hereinafter in this proviso referred to as to the principal non-resident) or on behalf of such non- resident and other non-residents which are controlled by the principal non- resident or have a controlling interest in the principal non-resident or are subject to the same common control as the principal non-resident, he shall not be deemed to be a broker, general commission agent or an agent of an independent status.]” 3 0 . We a r e t o j ud g e f ro m t h e f act s a nd ci r c um st a nc es o f t h e p re s ent c as e wh et he r t he im p u gn ed p a ym e nts a re d e em e d t o a c cru e o r a ri s e i n I ndi a t o t he r e sp ect i ve r e ci pi ent s, a s we h av e alr ea d y m e nt i on e d t hat onl y t h o s e p a ym e nt s whi ch are of t he n at ur e of s um c ha rg ea bl e u n d er t h e pr o vi si o n s of t h e A ct a re exi gib le f or p r o vi si on o f t ax d e d uct i o n at s o u rc e . H er e we a r e i ncli ne d t o r ef e r t o t he j u d gm ent of t he Ho n ' bl e S u p rem e C o u r t i n t h e ca s e of G .E . I ndi a T ech n ol o g y C e nt re P vt . Lt d. Vs . C I T ( 2 01 0 ) 3 2 7 IT E 4 56 ( S C ), wh e r eb y i t has be en h el d t hat se ct i on 19 5 ( 1 ) of t h e Act u s e s t h e ex pr e s si on ‘s um ’ ch ar g eable u nd er t h e pr o vi si o n of

t h e A ct an d we i g ht a ge i s n ee d ed t o b e gi v en t o t h e se wo r d s . F u rt he r, s ect i o n 1 95 u s e s t h e wo r d ‘ pa y e r ’ an d n ot t he wo r d ‘ a s s es s e es ’ . T he p a y er i s n ot a s s e sse e . T he pa y e r b ec om e s a n a s se s s ee i n d ef a ult on l y wh e n he f ai ls t o f u lfi ll st at ut o r y o b li gat i on un de r se ct i on 19 5( 1 ) of t h e Act . If t h e pay m ent d o e s n ot ha v e t h e e l em ent of t h e i nc om e, t he pa y e r ca nnot b e m ad e li abl e . Th e H on ' ble S u p r eme C o u r t t h u s r ej ect e d t he c o nt e nti on of t he D e pa rt m ent b y h oldi n g t hat i f t h e s um pai d i s n ot cha rg e abl e t o t ax, t h en n o t a x i s r eq ui r ed t o b e d e d uct ed . 3 1 . F r om t h e re adi ng o f t h e A. O . ’s o r der, we d o n ot u n d er st a nd hi s ca se . N o wh e r e i n t h e e nt i re o r d er h e h a s gi ven a n y f i ndi ng a s t o wh e t he r t h e nat u re o f i nc om e i n t he h an d s o f t h e n o n r e si dent i s t hat of ‘i nc om e ac cr u e d i n Indi a ’ o r ‘i n c om e de em e d t o h a ve ac cr u e d’ i n In di a.H e j u st kept on h ar pi ng t he f act th at t he u lti m at e be n ef i ci ar y of t h e se r vi ce s i s t he a s s e ss e e i n I ndi a. E v en t he C I T ( A ) whi l e a dj u dicat i ng t h e i ss u e c o u ld n ot gi v e an y ap pr o priat e fi ndi ng i n t hi s re g ar d. T h e re le va nt p o rt io n of t he C I T( A )’ s f i ndi ng s a r e r ec o rd e d at p ag e 1 2 pa ra 1 0 .3, i n lat e r pa rt of t hi s p a ra gr ap h, h e st at e s a s u n d er : “ T he pa ym ent a re m a de b y t h e ap pell ant c om p an y a nd t h e se a r e i n t he nat ur e o f m a rk et i ng s u pp o rt s e rvi c es an d s e lli ng e x pe ndi t u re f or get t i ng m o re a nd m or e b u si ne s s a br oad. T he s e r vi ce s pr o vi de d b y t h e n o nr e si dent ent i ti es f o r pr om o t i ng s al e s an d l eg al /p ro f e s si o n se r vi ce s a r e a s pe r t h e t erm s of c o nt r act whi c h i s e nt e re d b y t he s e ent i ti es wi t hin t h e a pp ell ant c om p any wi t h t he r e sp onsi bi li t y of t h e a ppe lla nt c om pan y . T h er ef o r e t he s o u r ce o f i nc om e f or t he ent i ti es a br o ad i s t h e a gr eem ent wi t h t he app ell ant c om pan y an d b y vi rt u e of t he s e se r vi ce s t h er e i s a di re ct b en efi t t o t he a pp ell ant c om p any a nd he nc e t h e p a ym e nt m a d e b y t he I ndi an c om p an y f or s er vi ce s ut i li z ed is n ot i n c onn e cti on wi t h b u si n es s / pr of e s si o n c a rri e d o ut , o ut si de o f In di a. T h e b usi n e ss o u t si de In di a i s se c u re d b y t h e Indi a n c om p an y i . e. t he a pp ell ant c om p any . T h e s o u rc e of i nc om e f o r t h e s er vi c es r e nd er e d b y t h e no n r esi d ent ent i ti es i s i n I ndi a a s t h e I ndi an c om pan y gi v e s di re ct i on s f o r t h e wo r k ab r oa d . T he ref or e t he i nc om e f or t h e n o n- re si d ent ac cr u e s an d ari se i n I ndi a. ” H e re al s o t h e C I T(A ) i s g et t i ng c o nfu s e d b y t h e f a ct t hat t h e s o u rc e of i nc om e i s i n I n di a. Th e re i s n o d o u bt t hat t h e I ndi an c om pa n y h a s m ad e t h e p a ym e nt an d als o t he f a ct t hat t h e pa y m e nt s ha v e be en m a de i n c o nsi d er at i on f or s o m e s e rvi ce s r en de r ed b y t he n on re si d ent s. H o we v e r t he m o ot q u e sti on i s wh e r e t h e s e rvi c e s, i n r es pe ct of wh i ch t h e pa ym ent s h a ve b ee n m a d e, we r e r e nd er e d. 3 2 . A s p e r t h e pr o vi si on s of s e ct i on 9( 1 ) o f t h e Act , t h e i nc om e i s d e em ed t o ac cr u e or a ri s e in I ndi a i f i t i s di rect l y or i ndi r ect l y t hr o u gh o r f r om an y b u si ne s s c o nn ect i on i n I ndi a. F u rt he r, t he b u si nes s c o nn ect i on ha s t o b e a n act i vi t y o f t he n o n- r e si de nt i n t he t axa bl e t er ri t or y i s In di a h avi ng i nt i m at e a nd ne ar rel at i on of a c o nt i nu o u s n at ur e of t he b u si ne ss of t he n o n- r e si de nt a nd at t ri b ut e d t o t he ear ni ng pr of i t s b y t he n on- r e si d ent i n hi s b usi n e s s. We s h o u ld u n d e rst an d t hat all c om m e rci al r elat i on s wi ll n ot n ec e ssa ri l y c o n sti t ut e b u si n e s s c o nn ect i o n unl e s s a c om m er ci al co n ne ct i on i s re ally a nd i nti m at el y c onn e cte d wi t h t h e b u si n ess a ct i vi t y of n o n- resi de nt i n I ndi a an d i s c ont ri b ut or y t o t h e e arni ng o f t h e pr of i t s in t h e s ai d act i vi t y of t h e n o n- re si d ent . S o m e i ll u st r at i ve i n st a nc es o f n o n- r e si de nt s ha vi ng b u si ne s s c on ne ct i on i n In di a h ave b e en q u ot e d i n t he j u d gm ent of t h e H o n 'bl e S u pr em e C o u r t i n t h e ca s e of R .D . A g g ar wa l ( s u pr a, wh i ch a re a s un de r :

i ) Ma i nt ai n a br anc h o f f i ce i n In di a f o r p u r cha s e o r s al e of g o o d s or t r an sa ct i ng ot h e r b u si n es s . ii ) A p p oi nti ng an ag ent i n In di a f o r s y st em at i c an d r eg u lar p u r cha s e of r a w m at eri al o r ot h er c om m o di ti e s, o r f or sa le of n o n- r e si de nt g o od s o r f or ot he r b u si nes s p ur p o se s . ii i ) E re ct i ng a f act or y i n In di a wh e r e ra w p r o d u ce p u r cha s ed l oc all y i s wo r k e d i nt o a f i rm s ui t abl e f o r sen di ng a br o ad . i v ) F o rm i ng l oc al c om p an y t o s al e p r od uct s of n on - r e si dent p ar ent c om p an y . v ) H a vi ng f i nanci al as s o ci at i on b et we en t h e re si d ent and n o n- r e si de nt c om pa n y . T h e se act i vi ti e s ha v e b e en c u ll ed o u t f r om t h e j u d gem ent b y t h e C B D T i t s elf i n i ts ci rc ul ar N o . 2 3[ F . N O . 7 A / 3 8 / 69 -I T( A -1 1 )] , d at e d 2 3 .0 7. 1 0 69 . 3 3 . I n t h e p re s ent c a se, n o f i ndi ng h as b e en b r o ught o n r ec o rd b y a n y o f t he l o we r a ut h o ri ti e s t hat n o n-re si d ent e nt i ti es ha ve an y s u c h c on ne ct i on wi t h In di a a s i llus t r at e d a b o ve . All a l on g t h e a s se s s ee ha s be e n m ai nt ai ni ng t hat t h e n o n- r e si de nt ent i tie s t o wh o m i t ha s m a de t h e pa ym ent s d o n ot ha v e a n y b u si n e s s c o nn ect i o n wi t h In di a. T h e As se ssi ng O f fi c er a s we l l a s t h e l ea rne d C I T ( Ap pe al s ) h ad n o wh e r e i n t h ei r or d er s re c o rde d an y s u ch f i ndi n g t h o u gh we m us t a dd t hat t he y ha v e n ot e v en i nt e nd e d t o m ak e an y i n ve st i gat i on i n t hi s r eg ar d. H o we v e r, we a l s o o bs e rv e t hat t hi s st a nce h as b e en c on si st ent l y t ak en b y t h e a ss e s s e e bef o re t h e l o we r a ut h ori ti e s a s we l l a s bef or e u s a nd e v en t h e l ea rn ed D . R . wh i l e a rg ui ng b ef or e u s c o u ld no t c ont r o v ert t he s ai d s u bm i s si o n of t he a s se s s ee . In t hi s m ann e r, we d o n ot h e si t at e t o c o ncl ud e t hat n o se r vi ces we r e r en d er ed by n o n- r e si d ent s i n In di a. T hi s c o ncl u si on of o u r s i s al s o ba s ed o n t h e p r op o si ti o n as lai d d o wn b y t h e D elhi Hi gh C o u rt i n t he c a s e o f CI T V s. E O N T ech n ol o gi es Pvt . Lt d. ( 2 01 2 ) 34 3 I T R 3 6 6 (D el ). 3 4 . I n vi e w o f t hi s, we f i nd t hat t h e pr ovi si on s of t a x d e d uct i o n at s o u rc e a re n ot a pplic abl e t o t h e im pu g n ed p a ym e nt s a s t h e am o unt s re c ei ve d by t he r eci pi ent s a re n ot i n t h e nat u re of i nc om e de em e d t o acc r u e or ari s e i n I ndi a i n t h ei r han d s. Th eref o r e, p r o vi si on s of s ect i o n 4 0(a )(i ) o f t he A ct c ann ot b e i n v ok e d. 3 5 . T h o u gh t h e d efi ni ti o n of t h e i nc om es d eem ed t o a cc r u e o r a ri se i n In di a i s p r o vi de d i n s e ct i on 9 of t h e A ct , we s h o u ld n ot f o rg et t h at t h e pr o vi si o ns o f t h e A ct ar e s u bje ct t o t h e t r eat y ent e r ed b y t h e C ent r al G o v e rnm ent wi t h t he G o v e rnm ent of a c o u nt r y o ut si d e I n di a i n t e rm s o f t he p r o vi si on s of s ect io n 9 0 of t he A ct . Th e ref o re, a s in t he p r es ent c a se pa ym e nt s h a ve b e en m a de t o t h e r esi de nt s of t h o s e c o unt ri es wi t h wh o m In di a h a s e nt e re d i nt o D TAA , t he p r o vi si on s of s e ctio n s 5 an d 9 of t he A ct shal l b e s u bj e ct t o t h e ag r eem ent ent e r ed i nt o wi t h s u ch c o u nt ri e s. 3 6 . Wi t h re ga rd t o t he f act t h at al l t h e s e ent it i es r el at e t o t h e c o u nt ri e s wi t h wh o m Indi a ha s D T A A s t h o u g h i n vi e w o f t h e f i ndi ng gi v en b y u s i n t h e ab o v e p ar ag ra ph t hat t h e am o unt s ar e no t i n t he nat u re of i nc om e i n t he han d s of t h e r eci pi ent s, we n e ed n ot g o i nt o t h e r e sp ect i ve t r e ati es, i n vi e w o f t h e f act t hat t h e p r o vi si on s whi ch a r e ben ef i ci al t o t he a s s e s se e ar e t o b e t a ken c ar e whi l e f as t e ni ng t a x li abi li t y. 3 7 . T h e b asi c p ri nci ple t o b e ap pli ed i n s u c h ca s e s i s t hat on e ha s t o f i rst l o ok at t h e d om es t i c la w t o f i nd o ut i f t h e n o n- r e si de nt a ss e ss e e i s t ax abl e t her e u nd e r. If i t i s t ax abl e, o n l y t he n o ne h a s t o g o i nt o t h e t re at y, i f a n y, b et we e n In di a a nd t h e c o u nt r y t o whi ch t he n on re si d ent b el on g s, t o , f i nd o u t if t h er e i s an y b en ef i ci al p r ovi si on i n t h e t re at y t o exem pt t h e a s se s s ee f r om t ax at i on or re d uc e t h e ri g o ur s of t he

d om e st i c l a w. If t h e re i s s uch a pr ovi si on i n t h e t r eat y , t he a s s e s se e i s e nt it led t o clai m t hat it sh o u ld b e gi ven t he b en ef i t of t he t r eat y p r o vi si on s . O n t he ot h er h and, i f t he a s s e s se e i s n ot t axa bl e u n de r t he d om e st i c la w i t s elf , t h e re i s n o n ee d t o l o ok i nt o t h e pr o vi si o ns o f t h e D T A A, ev en i f on e e xi st s, t o f i nd o ut i f t he re i s an y p ro vi si on u nd e r wh i ch t h e n o n- r e si de nt can be br o u ght t o t ax . In ot h er wo r d s , t h e t r eat y c an n ot be u s e d as a t axi ng st at ut e. T he p ri nci ple i s t h at wh e r e t h e n on- r esi d ent i s t a xab le un d er t h e d om e st i c la w b u t t h e re i s a p r o vi si on i n t h e t r e at y t o e x em pt t he t ran s act i on o r r ed u ce t h e ri go r of t axat io n t o t h e b en ef it o f t h e n o n- re si de nt , t he p r o vi si on s of t h e t r e at y o v e rri d e t h e p r o vi si on s o f t he d om e st i c la w. T h e s e f u nd am e nt al p ri nci ple s ar e we l l- s et t l ed b y t he j ud gm e nt s of t he S u pr em e C o u rt i n P . V. A . L. K ul an da ga n C h et t i ar ( 20 0 8 ) 2 67 I T R 6 5 4 ( S C ) a nd A z adi Ba cha o An da l on ( 2 00 3 ) 26 3 I T R 7 0 6 (S C ). 3 8 . O n g oi ng t hr o u gh t h e r el ev ant a rt i cle pr o vi d ed i n t h e D T A A, we o b s e r v e t hat i nv ari ab l y i n all t h e D T AA s t o wh i ch we a r e c onc e rn ed, t h e i nc om e i s t axa bl e i n In di a o nl y if t hat f or ei gn ent i t y ca rri e s o n b u si ne s s i n I ndi a t hr o u gh a pe rm anent e st abli s hm ent si t uat ed i n In di a. We a gai n o bs e rv e t h at n o s u c h f i ndi ng wi t h r e g ar d t o e xi st en ce o f an y p erm a nent e st abli s hm ent i n Indi a ha s b ee n br o ug ht o n re c or d b y a n y of t h e l o we r a u t h o ri tie s o r e ve n b y t he l ea rn ed D . R. at t he t im e o f he ari ng b ef or e u s . In vi e w o f t his, t h e p o si ti on em e r ge s t hat t he pa ym ent t o a p e r s on wh o h a p pe n s t o b e a re si de nt of c o u nt r y wi t h wh o m In di a h as ent e r ed i nt o D T A A and wh e r e t he b u si n es s p r of i t s a re t ax ed on l y i n t he c o unt r y an d d oe s not h av e a p erm a ne nt e st abli s hm ent i n In di a, t h e sai d pa ym e nt s a r e n ot ch ar g eab le t o t ax i n In di a. In vi e w o f t hi s al s o, e v en a s pe r D T A A, t he i n c om e bei ng n ot e xi gi ble t o t ax i n In di a i n t h e ha nd s of n o n- re si d ent ent i t y, t h e a s s e ss e e i s n ot req ui r e d t o d e d uct t ax at so u r c e. Th e ref o re, t h e pr o vi si on s of se ct i on 4 0 a )(i ) of t he A ct ca nn ot be i nv o ke d. 3 9 . N o w c o m es t h e se c on d q u e st i on, th e A s se s si ng O f fi c er h as app r ehe n de d i n hi s o r de r t hat t h e pa ym ent m a de b y t h e a ss e ss e e t o I MC S i s n ot i n c on s o nan c e wi t h t he c om m i s si on p ai d to o t he r c on ce rn . F r o m t h e pe r u sal o f t h e o r d er o f t h e l ea rn ed C I T ( A pp eal s ) t ho u g h we o b s e r v e t h at h e h a s n ot gi v en an y f i ndi ng i n t hi s r eg a rd, e v en t h e A ss e s si ng O f fi c er i n hi s o rd er h a s n ot gi v en an y c at e g ori c al f i ndi ng h o w t h e pa ym ent m ad e t o I MC S i s no t c om p ar abl e t o t he c om m i s si on pa ym ent m ad e t o St ev en Int er nat i on al . He h as j u st t ri e d t o c om pa r e t he s er vi ce s re n de re d b y t h e St e v en I nt e rnat i o nal i n v ol vi ng t h e p ot e nti al b u si ne ss s e gm ent , o r g ani zi ng m e et i ngs an d li ai s on wo r k s wi t h p r o sp ect i ve cli ent s, f a ci li t ati o n a nd r ed r e s sel an d s et t lem e nt of di sp ut e s. F u rt her r ef er ri ng t o t h e se rvi c e s re nd er e d b y I MC S , he e xpl ai ned t hat t h e se a re c o nc er ne d wi t h t h e i nt r o du ct i on an d as si st an ce i n e x ec ut i o n of an ag r eem ent an d a ssi s t i ng i n s elli ng s e rvi c es a nd f aci li t ati ng re lat i o ns hi p wi t h A u g u s t a st af f . I n t hi s b ac kg r o un d, h e stat ed t h at t h e s ervi c e s pr o vi d ed b y I MC S a r e n ot c om m en s ur at e wi t h t h e c omm i s si on . T he r ef o r e, t h e s e r vi ce s a re n ot bei n g r en de r ed f or t h e p u rp o s e of b usi n e s s a nd pr of e s si on . Th e re i s n o di sp ut e wi t h r es pe ct t o t h e f act t hat b ot h I MC S a n d St ev en Int er nat i on al ar e n ot r elat ed p art i e s of t h e a s ses s e e c om pa n y. A n a l y si s of pa ym ent m a de t o an ent i t y wh i ch i s n ot r el at e d i n any wa y wi t h t h e a s se s s ee i s n ot an e x er ci se e x pe ct e d f r om t h e A s s e s si ng Of fi ce r . We d o n ot u nd e r st an d und e r wh at pr o vi si ons t h e A s s es si ng Of f i ce r i s t r yi n g t o m ak e o u t t he c a se t hat t h e pa ym ent m ad e t o I MC S a r e n ot c om m en s ur at e wi t h t h e wo r k d o n e b y t h em . It i s t he p r er o gat i v e of t h e b u si n es sm a n t o r u n i t s b u si ne s s t h e wa y he

wa n t s . Th e A s se s si ng Of f i cer f or t he p u rp o s e of In c om e T ax A ct c ann ot q u e sti on t he r e as o na ble ne s s o f a n y s u ch pay m ent m a de b y t h e a s se s s e e. Th e ref o re, we d o n ot fi nd t hi s a lle gat i o n of t he A s s e s si ng Of f i cer b ac ke d b y an y l eg al p r o vi si on . I nci de nt al l y, we wo u l d li ke t o m ent i o n h er e t hat e v en i f t he A ss e s si ng Of fi ce r wa n t s t o as s e s s t he r e a s ona bl en es s of a n y p a ym ent m a de t o an y si st er c o nce r n of t h e a s s es s e e, t h ere i s n o d o ubt t o t h e f a ct t h at t he as s e s s ee h a s d o ne d et ai led t r an sf e r p ri ci ng s t u d y i n t he r ele v ant a s s e s sm ent y ea r, wh i ch wa s s u b je ct t o t he ref er en ce u n d er s e ct i on 9 2 C A (1 ) of t h e A ct t o t he T r an sf er P ri ci ng Of f i cer a nd t h e T ran sf e r P ri ci ng Of f i ce r h a s s u gge st e d n o ad j u st m ent wi t h r e sp e ct t o t h e A rm ’ s L en gt h Pri c e o n t h e t ra n sact i on b etwe e n t h e a ss e s se e an d i ts a s s oci at e e nt e rp ri s e s. 4 0 . N o w t h e q u e sti on a ri s es wh e t h er t h e p a ym ent m a de b y t h e as s e ss e e c an be h el d t o b e i n t h e nat ur e o f ‘f ee f or t ec hni cal s er vic e s ’. T h er e i s n o di sp ut e wi t h re spe ct t o t h e f a ct t h at t h e i s s u e of ‘f ee s t ec hni ca l s er vi ce s ’ wa s n ev er r ai s ed b y t h e A s s es si n g Of f i ce r. In hi s or d er r u nni ng i nt o 2 2 p ag e s he h a s n o wh e re m ent i o ne d and e ve n n o wh e r e sho we d hi s s u s pi ci on as r eg a rd s t h e p a ym e nt b ei ng i n t h e n atu r e of ‘f e e s f o r t e ch ni cal se r vi ce s’ t h at i s t he r e as o n wh y at t he a s s e s sm ent st a ge, t h e a s s es s e e wa s n e ve r c o nf r ont ed b y an y q u e r y wi t h r e sp ect t o t he pa ym ent s b ei ng t h at of t h e n at ure o f ‘f e es f o r t e chni ca l se rvi c e s’ . Th e co nt ent i on of t h e l ea rn ed D . R . b ef o r e u s wa s t hat t h e le ar ne d C I T ( App e al s ) ha s h eld t h e se p a ym ent s to b e i n t h e nat u re of ‘f ee s f o r t ech ni cal s e r vi ce s ’. We ha ve v e r y c ar ef ull y pe r u s e d t he o rd e r o f t he l ea rn ed C I T ( A pp ea ls ). O n l y at t wo p lac e s i n hi s o rd er h e has m e nt i on ed t h e t erm ‘f e es f o r t e ch ni ca l se r vi ce s’ . At pag e 1 3 h e ha s st at e d a s u nd e r : “ T he i ss u e i n han d i s t o d eci de wh et he r t he s e rvi c e r en de r ed b y t he n on re si d ent e nt it i es an d t he p a ym e nt m ad e by t h e a pp ell ant c om pa ny e st abli s he d b u sin e s s c on ne ct i on i n I ndi a a nd a s p er t h e s ou r c e of t he s e pa y m e nt s, t h es e a r e in t he n at ur e of f e e s f o r t e ch ni cal s e rvi c es . ” 4 1 . If we c a r ef ull y ana l y ze t he ab o v e se nt e nc e, we c an v er y e a si l y i nfe r t hat t h e le ar ned C I T ( A pp eal s ) ha s n ot gi v en an y f i ndi ng a s t o t h e n at u r e of b ei ng ‘f e e s f o r t ec hni cal s e r vi ce s ’. T he ref o re, f r om he r e we c a nn ot c o ncl u d e t hat t he l ea rn ed C I T ( Ap pea ls ) h a s gi ven a p o si ti v e f i ndi ng t hat t he p a ym e nt s i n q u e st io n a r e ‘f e e s f o r t ech ni cal s e rvi ce s ’ . 4 2 . O n l a st pa ge of hi s o r d er at t he c onc lu si o n of pa ra (i i ), h e h as a gai n m ent i on ed t he wo r d ‘f ee s f o r t e chni cal s e r vi ce s ’, whi c h he e xp re s s ed i n f oll owi n g t erm s : “ T he H on ' ble S u p rem e C o u rt i n t he c a se of G V K In d us t ri es L t d . ( 20 1 5 ) 3 7 1 I TR ha s h el d t hat t h e nat u re of se r vi ce r e nd er e d b y t he no n - r e si dent wo u l d c om e wi t hi n t he am bi t a nd s e ep of e xp res si on ‘ c on s ult anc y s e r vi ce ’ an d h enc e t ax s h o u ld h a ve be en d e d uct ed at s o u r ce a s t h e am o unt pai d as f e e c o ul d b e t a xa bl e un d er he he a d ‘f e es f o r t echni cal s e r vi ce s ’” 4 3 . F r om ba r e p er u s al o f t h e a b o ve s ent en ce o n e c an v e r y ea si l y i nf e r t hat t h e l ea rn ed C I T ( A pp eal s ) he r e als o h as n ot gi v en an y f i ndi n g, i n f act he r e he i s o nl y r ef e rri ng t o t he j u d gm ent of H on 'b le S up r em e C o u rt i n t he ca s e of GV K I nd u st ri es Lt d . (s u p ra ). 4 4 . I n vi e w o f t h e ab ov e, we s e e t h at t he l ea rn ed C I T ( A pp eal s ) h as n ot gi ve n an y f i ndi ng t hat t he pa ym ent s i n q u e st i on ar e ‘f e es f o r t e chni ca l se r vi ce s ’ i n n at ur e. We u n d er st a nd t h e la w t h at i n ca s e a pa ym e nt i s h el d t o b e in t he n at ur e of ‘f e e s f o r t e chni c al s e rvi ce s ’, t h e pl ac e of re nde ri ng s e r vi ce s b ec om e s i rr el ev ant i n vi ew o f t h e p r o vi si on s of

s e ct i on 9( 1 )( vii ) of t h e Act . H o we v e r, e v en i f t he ar g um e nt of t h e l e arn e d D. R . i s ac ce pt e d t h at t he l ea rn e d C I T ( A pp ea ls ) h a s gi v en a f i ndi ng t h at t h e se pa ym ent s ar e ‘f e es f or t e chni c al s er vi ce s ’, n o wh e r e f r om t h e o r d e r of t h e le ar ne d C IT ( A pp eal s ) we s e e a n y ef f o rt b ei ng m a de b y hi m t o co m e t o s u c h a c on cl u si on . It i s n ot t o be f or g ot t e n t h at t h e l ea rn ed C I T ( App ea l s ) a s su m es c ot erm i n u s p o we r s wi t h t hat t he A s s e s si ng Of f i ce r. I n f a ct , he e nj o y s t he p o we r s of e nh anc em e nt al so . T h er ef or e, in ca s e h e ha d a n y a pp re he n si on a s to t he re al nat u r e of t h e pa ym ent , wh o s t opp e d hi m t o c ar r y o ut f u rt h er i n ves t i gat i on s i n t hi s reg a rd ? I n t h e a b se nc e of a n y f i ndi ng gi ve n by t he A s s e s si ng Of fic e r o r t h e C I T ( Ap pe al s ) i n t hi s r eg ar d, we a r e n ot i ncli ne d t o e x ami ne t h e ca s e of t h e a s se s s ee wi t h a vi e w wh et he r t he p a ym e nt s a r e i n t he nat u re of ‘f e e s fo r t ech ni cal se rvi ce s ’ o r n ot . It i s n ot a c ase wh e r e c e rt ai n q u e ri e s we r e p ut eit he r b y t h e A s s e ssi ng Of f i ce r o r b y t he l ea rne d C I T ( Ap pe al s ) t o t he a s s e s se e wi t h re sp ect t o t h e pa ym e nt s b ei ng ‘f ees f o r t e chni c al s e rvi ce s ’, wh i ch t h e a s se s se e f ai le d t o re pl y . It i s a ls o n ot a ca s e wh e r e t he a s s e s se e ha d n ot c o- o pe rat ed wi t h t h e l o we r a ut h ori tie s i n o rd e r t o fi nd o u t t he r eal nat u r e of t h e pa ym ent s m ad e t o t h e n on- r esi d e nt s . All t h e r ele vant a g re em e nt s an d i n v oi ce s we r e f i led b ef o r e t h e l o we r a ut h ori ti e s . I n vi ew o f t hi s, t he a s s ess e e ca nn ot be p u ni sh ed at t hi s st a ge wi t h ou t t h e re b ei ng an y f a ult of hi s, s p ecia ll y i n vi e w o f t h e f a ct t h at e v en at t h e t im e of he ari ng bef o r e u s, t h e le ar ne d D . R. co u l d n ot bri ng an y m at e ri al o r e vi den ce i n s u p p ort of hi s cl aim e d t hat t h e im pu g n ed p a ym e nt s we r e i n t h e n at ur e of ‘f ee s f o r t e ch ni cal s er vic e s ’. Hi s onl y a r gu m ent i s t hat i n t h e ab s en ce of t h e nat u r e of se rvi c e s bei ng r e nd er e d b y n on- re si d ent s, c om i ng o u t f r om t h e e vi de nce f i led b y t h e a s s es se e, t he sam e s h o uld be p r es um e d t o b e i n t h e n at ur e of ‘f e e s f o r t e chni ca l s er vi ce s ’. N o s u c h p r es um pt i on e xi st s i n t he In c om e T a x A ct . N o s u c h p r es um pt i on c an b e rai s ed wi t h o ut a n y b acki n g m at eri al o r e vi d en ce o n re c ord . T h e a rg um ent o f t h e l ea rn ed D . R. t hat e v en i f t he p r o vi sio n s of D T A A a re ap pli ed, i n t he a b sen ce of a n y s er vi ce s c om in g o ut f r om t he e vi d en ce s, i t sh o ul d be p r es um e d t hat n on- r e si dent s h av e ‘m a de a vai labl e ’ ce rt ai n t e chni c al se r vi ce s t o t h e as s e s se e, i s t o o f a rf et c he d. We a r e n ot i ncli n ed t o ent e rt ai n s uc h a pl ea at t hi s st a g e. In vie w o f t hi s al s o, we h o l d t hat t h e se r vi ce s r e nd er e d b y t h e n o n- r e si d ent s a r e n ot i n t he n at u r e of t ech ni cal s er vi ce s, n o i nc om e de em e d t o ha v e ac cr u e d t o t h e n on - r e si dent ent i ti es, t h er e i s n o li abi li t y o n t h e a s s e s se e t o d e d uct t a x at s o u rc e on s u c h p a ym e nt . T he r ef or e, t h e p r o vi sio n s of s e ct i on 4 0(a)(i ) of t h e A ct ar e n ot exigi bl e i n t he p r es ent ca s e . 4 5 . We m a y c la rif y t hat we h a ve n ot d ea lt wi t h eac h e x pe ndi t u re s p eci fic all y, si nc e t h e i ssu e s i nv o lv e d i n a ll t h e se e x pe ns e s we r e c om m o n an d we di d n ot f i nd an y i ncli nat i o n t o d e al ea ch e xp en di t u re s e pa rat e l y. G r o u n d N o o s . 2, 3 a nd 4 a r e all o we d . ”

I have given careful consideration to the facts of the case and the decision of Hon'ble ITAT in the case of assessee for A Y 2009-10 and A Y 2010-11. Similar issue was raised in appeal in A.Y 2009-10 & 2010-11 which was confirmed by the then CIT(A)-2, Chandigarh viden order no. 888/13-14 dated 14.12.2015 and 129/2/15-16 dated 29/01/2016. The assessee went in appeal before ITAT against the order of the assesse, and it was decided in the favour of the assessee vide order no. 52/CHD/2016 dated 24.05.2016 and 130/CHD/2016 dated 14.12.2016. Respectfully, following the decisions of Hon'ble ITAT in the appellant's own case , the addition of Rs 97.65,000/- is deleted.

observations of the Assessing Officer and of the Ld. CIT(A).

in assessee’s own case, in the absence of any other new material or arguments

taken by both the parties which can differentiate from the facts and

circumstances of earlier years, we refrain to interfere in the order of the Ld.

CIT(A).

Order pronounced in the open Court.

Sd/- Sd/- (SANJAY GARG) (DR. B.R.R. KUMAR) JUDICIAL MEMBER ACCOUNTANT MEMBER Dated : 31/08/2018 AG Copy to: 1.The Appellant, 2. The Respondent, 3. The CIT(A), 4. The CIT, 5. The DR