Income Tax Appellate Tribunal - Mumbai
Ge Asset Management Incorporated, ... vs Department Of Income Tax
1
ITA 6015/M/2009
M/s GE Asset Mgt. Incoporated A/c General Electric PensionTrust
IN THE INCOME TAX APPELLATE TRIBUNAL
MUMBAI BENCHES "G"
BEFORE SHRI D.K. AGARWAL, J.M. AND SHRI R.K. PANDA, A.M.
ITA No. 6015/Mum/2009
Assessment year 2005-06
DDIT (IT) 3(1), M/s G.E. Asset Management
Scindia House, Incorporated A/c General Electric
R. No. 136, Ist floor, Pension Trust,
N.M. Road, Vs. GE Asset Management Inc.,
MUMBAI. C/o Deutsche Bank Operations
Custody Operations Department
Process Supervisor,
Tower No. 2nd Floor Logitech
Park,
M.V. Road, Saki Naka,
Andheri (E),
Mumbai.400072.
PAN AAATG3740P
Applicant Respondent
Appellant by Shri T.T. Jacob
Respondent by Ms. Deepali Pandit
ORDER
PER R.K. PANDA A.M. This appeal by the Revenue is directed against the order of CIT(A)- XXXIII, Mumbai dated 7.08.2009 relating to A.Y. 2004-05.
2. The grounds raised by the Revenue are as under:-
"1. On the facts and in the circumstances of the case and in law, the ld. CIT (Appeals) erred in holding that the assessee is entitled to interest under section 244A on the amount of self assessment tax paid.2
ITA 6015/M/2009 M/s GE Asset Mgt. Incoporated A/c General Electric PensionTrust
2. Without prejudice to the above, the Ld. CIT(Appeals) erred in holding that the assessee is entitled to the said interest from the date of payment of self assessment tax.
3. The appellant prays that the order of the ld. CIT(Appeals) on the above grounds be set aside and that of the Assessing Officer restored."
2.1 Facts of the case in brief are that the assessee is a US Pension Trust established for the purpose of providing payment of pensions and other benefits under the GE Pension Plan to participating US employees of GE Company and its affiliates. The assessee has been registered with the Securities and Exchange Board of India as a sub-account of GE Asset Management Incorporated and makes investments in India under the Foreign Institutional Investor (FII) route. The assessee had filed its return of income on October 27, 2004 computing its income under the head "capital gains". The assessee furnished a revised return of income on June 29, 2005 wherein the assessee reported its income under the head "business income" and claimed treaty benefits under the India - US Tax Treaty. The assessee contended that in absence of a permanent establishment in India, the business income was not taxable in India. Accordingly, the assessee reported taxable income as 'nil'. In April 2005, the assessee approached the Hon'ble Authority of Advance Rulings (AAA) for seeking a ruling in relation to the characterization of its income from sale of securities and taxability of its income in India. The AAR vide its Ruling dated December 20, 2005 held that profits arising from the sale of portfolio investments in India will be treated as business income. It was further held that the assessee was not a tax resident of the USA in terms of Article 4(1)(b) of the Treaty and hence not entitled to benefits of the India-USA treaty. Notice u/s 142(1) of the Act was served on the assessee and information/documents as called for by the A.O., were submitted by the assessee from time to time. The assessment was completed vide assessment order dated December 27, 2006, and the assessee's total income was assessed 3 ITA 6015/M/2009 M/s GE Asset Mgt. Incoporated A/c General Electric PensionTrust as "business income" at ` 21,87,74,470/- without providing treaty benefits under the India-US treaty.
2.2 The assesse preferred an appeal before the CIT(A) against the assessment order on January 29, 2007. The assessee also filed a Special Leave Petition before the Hon'ble Supreme Court in May 2007 against the AAR ruling. The Hon'ble Supreme Court after hearing the matter, vide its order dated august 26, 2008 quashed the AAR ruling.
2.3 As regards the appeal filed before CIT(A) against the assessment order, after considering the arguments of the assessee, the CIT(A) vide order dated September 19, 2008 held that the AAR Ruling did not apply to AY 2004-05. Further, the CIT(A) also held that income of the assessee should be taxable as 'Capital gains' and not as 'business income'. To give effect to the above, the A.O. passed an order on November 24, 2008 and determined the tax liability of the assessee at ` 4,17,12,555/-. The assessee had paid advance tax amounting to ` 4,19,77,028/- and self assessment tax amounting to ` 3,71,06,783/-. Accordingly, ` 3,75,39,970/- (i.e. ` 4,33,187 out of advance tax and ` 3,71,06,783/- out of self assessment tax) was refundable to the assessee. The A.O. issued a refund cheque dated February 5, 2009 for ` 3,75,39,970/- but did not grant any interest under section 244A of the Act. In appeal, the ld. CIT(A) directed the A.O. to grant interest u/s 244A(1)(b) on the refund arising out of self assessment tax paid by the assessee. While doing so, he relied on the decision of Hon'ble Madras High Court in the case of CIT vs. Ashok Leyland Ltd. (2002) 254 ITR 641 (Mad.), Hoogly Mills Co. Ltd. DCIT, 74 ITD 309[Cal ITAT] and Mumbai ITAT decision in the case of DCIT vs. BSES Ltd., 113 TTJ 227 (Mum).
2.4 Aggrieved by such order of the ld. CIT(A), the Revenue is in appeal before us.
4ITA 6015/M/2009 M/s GE Asset Mgt. Incoporated A/c General Electric PensionTrust
3. We have considered the rival submission made by both the sides, perused the orders of A.O. and the CIT(A). We have also considered the decisions cited before us. The only dispute in the appeal is regarding allowability of interest u/s 244A on account of self assessment tax. We find the ld. CIT(A) while holding that interest u/s 244A(1)(b) is payable, has relied on a couple of decisions. We find recently, the Hon'ble Delhi High Court in the case of CIT vs. Sutlej Industries Ltd. [2010] 325 ITR 331 (Delhi) has held that where self assessment tax paid by the assessee u/s 140A is refunded, the assessee should be, on principle, entitled to interest thereon since the self assessment tax falls within the expression "refund of any amount". The ld. D.R. could not point out any contrary decision. In view of the above and since the order of the ld. CIT(A) is in consonance with the decision of Hon'ble Madras High Court in the case of Ashok Leyland Ltd. (supra) and Hon'ble Delhi High Court in the case of Sutlej Industries Ltd. (supra) and the decisions of co- ordinate Benches of the Tribunal, therefore, in absence of any contrary decision brought to our notice by the ld. D.R., the same is upheld. The grounds raised by the Revenue are accordingly dismissed.
4. In the result, the appeal filed by the Revenue is dismissed.
Order pronounced on 31.5.2011.
Sd/- sd/-
(D.K. AGARWAL) (R.K. PANDA)
JUDICIAL MEMBER ACCOUNTANT MEMBER
Mumbai, dated 31st May, 2011.
RK
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ITA 6015/M/2009
M/s GE Asset Mgt. Incoporated A/c General Electric PensionTrust Copy to...
1. The appellant
2. The Respondent
3. The CIT(A) - XXXII, Mumbai
4. The DIT (International Taxation)- Mumbai
5. The DR Bench, "G"
6. Master File // Tue copy// BY ORDER DY/ASSTT. REGISTRAR ITAT, MUMBAI 6 ITA 6015/M/2009 M/s GE Asset Mgt. Incoporated A/c General Electric PensionTrust Date Initials 1 Draft dictated on 26.5.2011, Sr. PS 2 Draft placed before the Author 26.5.2011 Sr. PS 3 Draft placed before the second Member 4 Approved draft comes to the Sr. PS Sr. PS 5 Kept for pronouncement on Sr. PS 6 File sent to the Bench Clerk Sr. PS 7 Date on which file goes to the Head Clerk 8 Date on which file goes to the AR 9 Date of dispatch of order