Income Tax Appellate Tribunal - Bangalore
M/S. Ibm World Trade Corporation, ... vs Department Of Income Tax on 17 October, 2011
Page 1 of 4 1 ITA No.39/Bang/2011
INCOME TAX APPELLATE TRIBUNAL
BANGALORE BENCHES 'A'
BEFORE SHRI N K SAINI, ACCOUNANT MEMBER AND
SHRI GEORGE GEORGE K, JUDICIAL MEMBER
ITA No.39/Bang/2011
(Asst. Year 2006-07)
The Deputy Commissioner of Income Tax,
(International Taxation),
Circle-1(1), Bangalore. - Appellant
Vs
M/s IBM World Trade Corporation
C/o BMR & Associates, Embassy Icon,
Annexe, 2/1, Infantry Road, Bangalore-1. - Respondent
PA No.AAACI1209G
Date of hearing : 17/10/2011
Date of pronouncement : 17/10/2011
Appellant by : Shri Etwa Munda, CIT-III
Respondent by : Shri N Krishna, C.A.
ORDER
PER GEORGE GEORGE K :
This appeal instituted by the department is directed against the order of the CIT(A)-IV, Bangalore dated 25/10/2010.. The relevant asst. year is 2006-07.
2. The effective grounds raised by the revenue reads as follows:-
i) The learned CIT(A) is not justified in directing the AO not to charge interest u/s 234B and 234C of the I T Act. Page 2 of 4 2 ITA No.39/Bang/2011
ii) The learned CIT(A) erred in holding that the assessee is not liable to pay advance tax on the ground that the assessee is non-resident and its receipts are liable to TDS u/s 195, therefore, it is not liable to interest u/s 234B and 234C of the Act.
iii) The learned CIT(A) failed to appreciate that the word 'deductible' u/s 209(1)(d) was used because at the time of computing advance tax, the whole years income has to be considered and at that time, whole of the TDS would not have been deducted. These words ought not to have been construed to mean that adv. Tax provisions are not applicable to cases covered u/s 195.
iv) For the aforementioned grounds, the order of the CIT(A) be set aside and that the interest u/s 234B & C becomes mandatory.
3. Briefly stated the facts are as follows:-
The assessee is a Company incorporated in United States of America. It is engaged in the business of software development and support services. For the concerned asst. year, return of income was filed on 28th November, 2006 declaring a total income of Rs.84,54,75,530/-. The tax payable of Rs.11,31,52,580/- was discharged by way of tax deduction at source amounting to Rs.5,57,79,807/- and payment of self assessment tax amounting to Rs.5,86,16,629/-. The AO, while completing the assessment, determined the interest liability u/s 234B and 234C of the Act amounting to Rs.46,89,330/- and Rs.41,32,453/- respectively.
4. Aggrieved by the levy of interest, the assessee carried the matter in appeal before the first appellate authority. Page 3 of 4 3 ITA No.39/Bang/2011
5. The first appellate authority, by following the order of the Tribunal in assessee's own case for the asst. years 2003-04 to 2005-06, allowed the appeal of the assessee and held that the assessee is not liable for interest u/s 234B and 234C of the Act.
6. Aggrieved by the order of the CIT(A), the department is in appeal before us.
7. The learned DR supported the order of assessment and submitted that the order of the Tribunal, which is relied on by the CIT(A), has not been accepted by the revenue and an appeal u/s 260A of the Act has been filed before the Hon'ble High Court of Karnataka.
8. The learned AR submitted that the issue in question is squarely covered by the order of the Tribunal in assessee's own case cited supra.
9. We have heard the rival submissions and perused the material on record. The Tribunal in assessee's own case on identical facts had categorically held that the assessee is not liable for interest u/s 234B and 234C of the Act. The findings of the Tribunal are elaborately reproduced in the impugned order of the CIT(A). Hence, it is not reiterated here. The facts being identical, we follow the coordinate bench decision of the Tribunal in assessee's own case and hold that the assessee is not liable for interest u/s 234B and 234C of the Act. Hence, we uphold the order of the CIT(A).
Page 4 of 4 4 ITA No.39/Bang/2011
10. In the result, the appeal filed by the revenue is dismissed.
Order pronounced in the open court on 17th day of October, 2011 Sd/- Sd/-
(N K SAINI) (GEORGE GEORGE K)
ACCOUNTANT MEMBER JUDICIAL MEMBER
Copy to:-
1.The Revenue 2. The Assessee 3. The CIT concerned 4. The CIT(A)
concerned 5. The DR 6. GF
MSP/- By Order
Asst. Registrar, ITAT, Bangalore.