Income Tax Appellate Tribunal - Mumbai
Daimler Chrysler Ag, Mumbai vs Department Of Income Tax
IN THE INCOME TAX APPELLATE TRIBUNAL
MUMBAI BENCH "D": MUMBAI
BEFORE SHRI S.V. MEHROTRA (AM) AND
SHRI R.S. PADVEKAR (JM)
ITA No. 3727/Mum/2009
(Asstt. Year : 1997-98)
DDIT(IT)-1(2), Mumbai ... Appellant
Room No. 119,
Scindia House, 1st floor,
Ballard Estate, N.M. Road,
Mumbai 400 038
V/s.
M/s. Daimler Chrysler AG ... Respondent
C/o. S.R. Batliboi & Co.C.A.,
18th floor, Express Towers,
Nariman Point, Mumbai-400 021
PAN : AABCD2354C
Appellant by : Shri R.N. Jha (CIR DR)
Respondent by :Ms. Aashish Kasad
:ORDER:
PER R.S. PADVEKAR, J.M
The Revenue has filed this appeal challenging the impugned order of the Ld CIT(A)- Central XXXI, Mumbai dated 20.03.2009 for the A.Y. 2003-04 for the A.Y. 1997-98.
2. The Revenue has taken the following effective Ground :
"1. On the facts and in the circumstances of he case and in law, the ld. CIT(A) erred in holding that the findings of CIT(Appeals) that interest under section 234B of the Act was not chargeable in the case of the non-resident assessee whose income is liable to deduction of tax at source under section 195 of the Income-tax Act, 1961."2 ITA No. 3727/Mum/2009
3. The short controversy is in respect of the interest to be charged u/s. 234B of the Act. The assessee company is a Tax resident of Germany. The assessee filed the return of income in which the royalty received from Bajaj Tempo was declared. Originally, the assessee's assessment was completed u/s. 143(3) read with section 147 of the I.T. Act vide order dt. 28.3.2002 determining the income of the assessee at Rs. 6,93,14,161/-. It appears that the said assessment order was the subject matter of the challenge before the CIT(A) and then to the ITAT. It further appears that the Tribunal set aside the matter to the file of the A.O. As per directions of the Tribunal, the A.O passed the assessment order determining the total income of the assessee at Rs. 3,54,28,070/- and also charged interest u/s. 234-B of the Act. The assessee challenged the issue of interest levied by the A.O u/s. 234B before the first appellate authority. The Ld CIT(A) was of the opinion that the assessee is a foreign company and hence, the assessee's income was subject to provisions of the TDS u/s. 195 of the Act and hence, the assessee was not required to pay any advance tax u/s. 208 r.w.s 209 of the I.T. Act. The Ld CIT(A) also placed his reliance on the following decisions :
i) CIT v/s. Halliburton Offshore Services Inc., 271 ITR 395 (Uttaranchal),
ii) Motorola Inc. v/s. DCIT, 95 ITD 269 (Del) (SB)
iii) SNC-Lavalin International Inc. v DCIT, 13 DTR 449 (Del) (Trib)
iv) Sedco Forex International, 72 ITD 415 (Del) etc., Now the Revenue is in appeal before us.
4. We have heard the parties. The Ld Counsel for the assessee submitted that now the issue stands covered in favour of the assessee by the decision of the Hon'ble High Court of Bombay in the case of DIT (IT) v/s. NGC Network Asia LLC, 222 CTR 86 (Bom). In this case, it is not disputed that the assessee is a non-resident and payments made to the assessee company are subjected to TDS u/sec. 195(1) of the Act. This fact has not been controverted by the 3 ITA No. 3727/Mum/2009 Revenue. In this case, merely because there is a failure on the part of the person who made payments to the assessee to deduct tax at source to which the provisions of Section 195(1) are attracted, to the extent of the income/payments which are in the mischief of TDS provision no liability to pay advance tax is put of the recipient. Once the income is subjected to TDS provision, then that is outside the provisions of the advance tax as per the mandate of Section 209 of the Act and this view has been fortified by the decision of the Hon'ble High Court of Bombay in the case of NGC Network Asia LLC (supra). We do not find any reason to interfere with the order of the CIT(A) as the principles laid down in the case of NGC Network Asia LLC (supra) are squarely applicable to the facts of the case. We accordingly confirm the order of the CIT(A).
5. In the result, Revenue's appeal is dismissed.
Order pronounced in the open court on 24th day of March, 2010.
Sd/- Sd/-
(S.V. MEHROTRA) (R.S. PADVEKAR)
ACCOUNTANT MEMBER JUDICIAL MEMBER
Mumbai, on this 24th day of March, 2010.
:US
Copy to:
1. Appellant
2. Respondent ,
3.The CIT(A)- XXXI, Mumbai
4.The CIT conce rned, Mumbai
5.The DR, "D" bench, Mumbai
6.Guard File
BY ORDER
True co py
Asstt..Re gistrar, ITAT, Mumbai.
4 ITA No. 3727/Mum/2009
US
Date Initials
1. Draft dictated on 17/ 3/10 --------------- Sr.P.S.
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