Income Tax Appellate Tribunal - Mumbai
Ups Scs (Asia) Ltd, Mumbai vs Department Of Income Tax on 21 May, 2014
अिधकरण मुंबई Ûयायपीठ 'एल' मुंबई ।
आयकर अपीलीय अिधकरण,
IN THE INCOME TAX APPELLATE TRIBUNAL "L" BENCH, MUMBAI
सव[ौी ǒवजय पाल राव, Ûयाियक सदःय एवं , नरे Ûि कुमार ǒबãलैáया, लेखा सदःय के सम¢
BEFORE SHRI VIJAY PAL RAO, JM AND SHRI N.K. BILLAIYA, AM
आयकर अपील सं./I.T.A. No.7319/Mum/2012
िनधा[रण वष[ / Assessment Year :2008-09
(िनधा[
The ADIT(IT)-2(2), बनाम M/s. UPS SCS (Asia) Ltd.,
बनाम/
Scindia House, C/o KPMG, Lodha
Vs.
Ballard Estate, Excelus,
N.M. Road, Appolo Mills Compound,
Mumbai-400 038 N.M. Joshi Marg,
Mahalaxmi,
Mumbai-400 011
ःथायी ले खा सं . /जीआइआर सं . /PAN/GIR No. : AAACU 8509M
(अपीलाथȸ /Appellant) .. (ू×यथȸ / Respondent)
अपीलाथȸ ओर से/ Appellant by: Shri B.P.K. Panda
ू×यथȸ कȧ ओर से/Respondent by: Shri Prashant
Maheshwari
सुनवाई कȧ तारȣख / Date of Hearing :21.05.2014
घोषणा कȧ तारȣख /Date of Pronouncement :21.05.2014
आदे श / O R D E R
PER N.K. BILLAIYA, AM:
This appeal by the Revenue is directed against the order of the Ld. CIT(A)-11, Mumbai dt.28.9.2012 pertaining to A.Y. 2008-09.
2. The sole grievance of the Revenue reads as under:
2 ITA No. 7319/M/2012"Whether on the fact and in the circumstance of the case and in law, the Ld. CIT(A) was justified in holding that the receipts on account of transportation fee of Rs. 48,91,349/- is not taxable as 'FTS' u/s. 9(1)(vii) of the Income Tax, 1961. "
3. The assessee is in the business of forwarding services. The original return of income was filed on 30.9.2008 declaring Rs. Nil income. The same was revised on 31.3.2010 declaring total income at Rs. 1,57,680/-. The return was selected for scrutiny assessment and accordingly statutory notices were issued and served upon the assessee.
3.1. The assessee is a company incorporated under the laws of Hong Kong and is engaged in the business of provision of supply chain management including the provision of freight forwarding and logistics services. During the course of the scrutiny assessment proceedings, the Assessing Officer came across with the agreement with UPS SCS (India) Pvt. Ltd., with whom the assessee entered into a Regional Transportation Services Agreement for providing freight and logistics services to each other.
3.2. On perusal of the Accountant's report in Form 3CEB, the AO noticed that during the year under consideration, the assessee has received Rs. 48,91,349/- as international transportation fee under the Transportation Agreement. The said income was claimed to be not taxable in India under the provisions of either Sec. 5 or Sec. 9 of the Act as the income arose from services rendered by the assessee outside India as no operations have been carried out in India. It was further claimed that the relationship between the assessee and USIPL is that of an independent contractor and the business between them is carried on a 3 ITA No. 7319/M/2012 principal-to-principal basis and at arm's length. The AO was of the firm belief that the term Fee for Technical Services (FTS) has been defined under the provisions of Sec. 9(1)(vii) of the Act and in so far as relevant to the facts of the case, as "any consideration (including any lump sum consideration) for the rendering of any managerial, technical or consultancy services (including the provision of services of technical or other personnel)". The AO further observed that in the light of the provisions of Sec. 9(1)(vii) services provided by the assessee were in the nature of managerial, technical or consultancy services. Drawing support from the findings of the Ld. CIT(A) in the case of the assessee for A.Y. 2006-07, wherein a similar transaction was considered, the AO came to the conclusion that the transportation fees are for technical services and therefore, liable to be taxed on a gross basis as fees for technical services and added Rs. 48,91,349/- to the returned income of the assessee and completed the assessment at Rs. 50,49,029/-.
4. The assessee carried the matter before the Ld. CIT(A). It was pointed out to the Ld. CIT(A) that the order of the Ld. CIT(A) for A.Y. 2006-07 has been reversed by the Tribunal, Mumbai Bench vide its order dt. 22.2.2012, wherein the Tribunal has held that fees earned by the assessee under the transportation agreement are not FTS and cannot be taxed u/s. 9(1)(vii) of the Act. Taking support from the decision of the Tribunal in assessee's own case for A.Y. 2006-07, the Ld. CIT(A) held that the services rendered by the assessee are not managerial, technical or consultancy services and deleted the addition made by the AO.
5. Aggrieved by this, the Revenue is before us. At the very outset, the Ld. Counsel for the assessee stated that the issue stands covered in 4 ITA No. 7319/M/2012 favour of the assessee by the decision of the Tribunal in assessee's own case for A.Y. 2006-07 vide ITA No. 2426/M/2010 dt. 22.2.2012.
6. The Ld. Departmental Representative fairly conceded to this.
7. We have carefully perused the orders of the authorities below. We find that the AO has based his findings on the decision of the Ld. CIT(A) for A.Y. 2006-07. We also find that the said decision of the Ld. CIT(A) was reversed by the Tribunal in ITA No. 2426/M/10 at para 2.1.5 of its order, wherein the Ld. CIT(A) has incorporated the findings of the Tribunal qua para 17,18 & 19 of the Tribunal's order. As no distinguishing facts have been brought before us and the findings of the Ld. CIT(A) is being based on the decision of the Tribunal in assessee's own case in ITA No. 2426/M/10, we decline to interfere.
8. In the result, the appeal filed by the Revenue is dismissed.
Order pronounced in the open court on 21st May, 2014 .
आदे श कȧ धोषणा खुले Ûयायालय मɅ Ǒदनांकः 21.5.2014 को कȧ गई ।
Sd/- Sd/-
(VIJAY PAL RAO ) (N.K. BILLAIYA)
Ûयाियक सदःय/JUDICIAL MEMBER लेखा सदःय / ACCOUNTANT MEMBER मुंबई Mumbai; Ǒदनांक Dated 21st May, 2014 व.िन.स./ RJ , Sr. PS 5 ITA No. 7319/M/2012 आदे श कȧ ूितिलǒप अमेǒषत/Copy षत of the Order forwarded to :
1. अपीलाथȸ / The Appellant
2. ू×यथȸ / The Respondent.
3. आयकर आयुƠ(अपील) / The CIT(A)-
4. आयकर आयुƠ / CIT
5. ǒवभागीय ूितिनिध, आयकर अपीलीय अिधकरण, मुंबई / DR, ITAT, Mumbai
6. गाड[ फाईल / Guard file.
आदे शानुसार/ ार BY ORDER, स×याǒपत ूित //True Copy// उप/सहायक उप सहायक पंजीकार (Dy./Asstt. Registrar) आयकर अपीलीय अिधकरण, अिधकरण मुंबई / ITAT, Mumbai