Income Tax Appellate Tribunal - Mumbai
Linklaters Llp, Mumbai vs Deputy Commissioner Of Income Tax (It) ... on 12 March, 2018
1
MA 238/Mum/2017
IN THE INCOME TAX APPELLATE TRIBUNAL
MUMBAI BENCH "L", MUMBAI
Before Shri Mahavir Singh (JUDICIAL MEMBER)
AND
Shri G Manjunatha (ACCOUNTANT MEMBER)
M.A. 238/Mum/2017
(Arising out of I.T.A No.1690/Mum/2015)
(Assessment year: 2011-12)
Linklaters LLP vs The Dy.CIT (International
C/oi Deloitte Haskins & Sells Taxation) 3(1)(2), Mumbai
LLP, Tower-3, 27-32 Floor,
Indiabulls Finance Centre,
Elphinstone Mill Compound,
Senapati Bapat Marg,
Elphinstone (West), Mumbai-
13
PAN : AABCL5182G
APPLICANT RESPONDENT
Applicant by Shri SE Dastur / Neeraj Sheth
Respondent by Shri V Jenardhanan
Date of hearing 19-01-2018
Date of pronouncement 12-03-2018
ORDER
Per G Manjunatha, AM :
The assessee has filed this miscellaneous application seeking rectification of order passed by the ITAT, L-Bench, Mumbai vide its order dated 31-01-2017 in ITA No.1690/Mum/2015 for AY 2011-12 u/s 254(2) of the Act.
2. The Ld.AR for the assessee submitted that the assessee's appeal was decided by L-Bench vide order dated 31-01-2017. In the said order, 2 MA 238/Mum/2017 the Bench by relying upon the decision of the co-ordinate bench in assessee's own case for AY 1998-99 has held that only income earned from services rendered in India is taxable in India. However, having held so, the Tribunal has set aside the matter to the file of the AO for examination of facts with regard to the rendering of services in India on the ground that the lower authorities have not examined proper facts. The Ld.AR further submitted that the observations of the bench while restoring the matter to the AO is based on overlooking certain very relevant circumstances available on the record that during the course of assessment proceedings, the AO had called for details and evidences regarding services rendered in India and outside India. At the time of hearing on 15-01-2014, the AO had required the assessee to submit the basis of invoicing of income under the two categories, i.e. service rendered in India and outside India and the assessee vide letter dated 25-02-2014 submitted all the details. The Tribunal at paragraph 4 has also found that the details of income attributable to services rendered in India and outside India were furnished before the AO and that the AO had found them to be in order. The Ld.AR further submitted that during the proceedings before the DRP, the DRP specifically called upon the assessee to provide the break up of the assessee's income as per the activities rendered to various clients. The assessee vide letter dated 04- 12-2014 submitted details of income received from various clients and in 3 MA 238/Mum/2017 respect of services rendered in India and outside India. The said letter was filed before the Tribunal in the paper book at pages 36 to 40. In these circumstances, the assessee submitted that the aforesaid decision of the Tribunal at para 48 of the order to set aside the matter to the file of the AO on the premises that the relevant details were not on record is a mistake apparent from the record which requires rectification u/s 254(2) of the Income-tax Act, 1961.
3. The Ld.DR, on the other hand, supporting the order of the ITAT, submitted that the facts available on the record clearly shows that the assessee has not filed any details about bifurcation of income earned from services rendered in India and outside India and accordingly, the Tribunal has rightly set aside the issue to the file of the AO for verification of facts.
4. We have heard both the parties and perused the materials available on record. The issue before the Tribunal was that whether the income from services rendered to clients outside India is taxable in India or not? The ITAT, in ITA No.1690/um/2015 for AY 2011-12 vide its order dated 31-01-2017, by following the order of the Tribunal for AY 1998-99 has held that only income earned from services rendered in India is taxable in India; however, set aside the matter to the file of the AO for examination of facts with regard to the rendering of services in India by observing that the lower authorities have not examined the facts properly 4 MA 238/Mum/2017 in the light of the claim of the assessee that it has submitted all details about services rendered in India and outside India. The grievance of the assessee is that the Tribunal having held that only income earned from services rendered in India is taxable in India and also found that the details of income attributable to services rendered in India and outside India were furnished before the AO and that the AO had found them to be in order, erred in setting aside the matter to the file of the AO for verification of facts.
5. Having heard both the sides, we find merit in the arguments of the Ld.AR for the assessee, for the reason that the Tribunal having held that only income earned from services in India is taxable in India and also observed at para 4 of its order that the details of income attributable to services in India and outside India were furnished before the AO, erred in setting aside the issue to the file of the AO for verification of facts. Therefore, we are of the view that there is a mistake apparent in the order of the Tribunal insofar as setting aside the issue to the file of the AO and hence, we are of the considered view that it requires rectification u/s 254(2) of the Act. Accordingly, we modify the order passed by the Tribunal in ITA 1690/Mum/2015 dated 31-01-2017 and direct the AO to delete addition made towards income received from services rendered outside India.
6. In the result, the miscellaneous application filed by the assessee is 5 MA 238/Mum/2017 allowed.
Order pronounced in the open court on 12th March, 2018.
Sd/- sd/-
(Mahavir Singh) (G Manjunatha)
JUDICIAL MEMBER ACCOUNTANT MEMBER
Mumbai, Dt : 12th March, 2018
Pk/-
Copy to :
1. Applicant
2. Respondent
3. CIT(A)
4. CIT
5. DR
/True copy/ By order
Sr.PS, ITAT, Mumbai