Income Tax Appellate Tribunal - Bangalore
Deputy Commissioner Of Income Tax ... vs M/S Ibm World Trade Corporation , ... on 7 September, 2018
IN THE INCOME TAX APPELLATE TRIBUNAL
'A' BENCH, BENGALURU
BEFORE SHRI SUNIL KUMAR YADAV, JUDICIAL MEMBER
and
SHRI ARUN KUMAR GARODIA, ACCOUNTANT MEMBER
IT(IT)A Nos.2168, 2169 & 2170/Bang/2017
(Assessment years: 2013-14, 2012-13 & 2011-12)
Deputy Commissioner of Income-tax,
International Taxation,
Circle 1(2),
Bengaluru. ... Appellant
Vs.
M/s.IBM World Trade Corporation,
Level-3, Prestige Nebula-1, 9-12
Cubbon Road,
Bengaluru-560001. ... Respondent
PAN:AAACI 1209 G
Appellant by : Shri C.H.Sundar Rao, CIT (DR).
Respondent by : Shri Sharath Rao, CA.
Date of hearing : 27/06/2018
Date of pronouncement : 07/09/2018
O R D E R
Per ARUN KUMAR GARODIA, AM:
All these three appeals are filed by the Revenue and these are directed against three separate orders of the learned Commissioner of Income-tax(Appeals)-12, Bengaluru,[CIT(A)] all dated 15/09/2017 for assessment years 2011-12, 2012-13 and 2013-14. All these appeals were heard together and are being disposed of by way of this common order for the sake of convenience.
2. The identical grounds raised by the revenue in all the three appeals are as under:
IT(IT)A Nos.2168 to 2170/Bang/2017 Page 2 of 15
3. During the course of hearing before us, it was submitted by the ld. AR of the assessee that only two issues are involved in these three appeals of the Revenue and on both these issues, the ld.CIT(A) has decided the issues in favour of the assessee. He submitted that the first issue regarding chargeability of tax rate on royalty income was decided by following earlier Tribunal order in assessee's own case for AY 2007-08, 2008-09 and 2009-10. and for second issue, the ld.CIT(A) has followed the tribunal order for AYs 2003-04 and this issue is in respect of chargeability of interest u/ss. 234A, 234B and 234C of the IT Act. He submitted that the relevant tribunal orders are available in the paper book filed by the assessee IT(IT)A Nos.2168 to 2170/Bang/2017 Page 3 of 15 at pages 210 to 223 for AYs. 2008-09, 224 to 227 for AY 2010-11. As against this, the ld. DR of the revenue supported the assessment order and he filed written submissions which are reproduced herein below:
IT(IT)A Nos.2168 to 2170/Bang/2017 Page 4 of 15 IT(IT)A Nos.2168 to 2170/Bang/2017 Page 5 of 15
4. We have considered rival submission and we find force in the submissions of the ld.AR of the assessee regarding first issue in respect of tax rate on royalty income. The ld. DR could not point out any difference in facts in the present years and earlier years. This issue was decided by the ld.CIT(A) as per relevant paragraph available at pages 6 to 12 of order for AY 2013-14. For ready reference, these paras. are reproduced herein below because the ld.CIT(A) has reproduced relevant paragraphs of the Tribunal order in assessee's own case for AY 2007-08, 2008-09 and 2009-10. These are as under:
IT(IT)A Nos.2168 to 2170/Bang/2017 Page 6 of 15 IT(IT)A Nos.2168 to 2170/Bang/2017 Page 7 of 15 IT(IT)A Nos.2168 to 2170/Bang/2017 Page 8 of 15 IT(IT)A Nos.2168 to 2170/Bang/2017 Page 9 of 15 IT(IT)A Nos.2168 to 2170/Bang/2017 Page 10 of 15 IT(IT)A Nos.2168 to 2170/Bang/2017 Page 11 of 15
5. From above paras reproduced from the order of the ld.CIT(A), it is seen that while deciding the first issue, being tax rate for royalty income, the ld.CIT(A) has followed the Tribunal order in assessee's own case for earlier years 2007-08, 2008-09 and 2009-
10. In para.7.8 of the Tribunal order reproduced by him, it is noted by the Tribunal that the assessee has adopted different rates for royalty income arising as per agreement entered into before IT(IT)A Nos.2168 to 2170/Bang/2017 Page 12 of 15 01/06/2005 and similar royalty income as per agreement entered into on or after 1/6/2005. The Tribunal had given a categorical finding that royalty income in respect of agreement entered into before 1/6/2005 is from one source and royalty income in respect of agreements entered into on or after 1/6/2005 are from difference source. Since no difference in facts could be pointed out by the ld. DR of the Revenue as per written submissions reproduced above, we find no reason to take a contrary view in the present years. Therefore, respectfully following the earlier Tribunal order followed by the ld.CIT(A), in the present years, we decline to interfere with the order of the ld.CIT(A) on this issue in all these three years. This issue is decided in favour of the assessee and against the revenue.
6. The second issue has been decided by the ld.CIT(A) as per para.6 of his order in which he reproduced the relevant finding of the Tribunal in assessee's own case for AY 2003-04. Hence, for ready reference, this paragraph of the order of the ld.CIT(A) is reproduced herein below:
IT(IT)A Nos.2168 to 2170/Bang/2017 Page 13 of 15
7. From above Para. reproduced from the order of the ld.CIT(A), it is seen that the decision of the ld.CIT(A) is based on the decision of the Tribunal in assessee's own case for AY 2003-04. From the relevant Para of this Tribunal order for AY 2003-04 reproduced by the ld.CIT(A), it is seen that the Tribunal decision is only on this basis that the assessee has to estimate current tax liability after reducing tax deductible or collectible at source and Advance Tax is to be paid only if amount of tax has to be paid as advance-tax after such reduction of tax deductible or collectible at source. In this regard, this was the submission of the ld. DR of the Revenue before us that there is amendment in the provisions of section 209 by the Finance Act, 2012 w.e.f. 1/4/2012 by way of insertion of a Proviso below sub-section (1) of section 209. It was pointed out that as per this proviso, the amount of income-tax which would be deductible or collectible during the relevant financial year is not required to be reduced from the liability for advance-tax, if the person responsible for deducting tax has not made the deduction of TDS or the recipient has not collected the tax. For ready reference, the IT(IT)A Nos.2168 to 2170/Bang/2017 Page 14 of 15 contents of this proviso to sub-section (1) to section 209 are reproduced herein below:
"Provided that for computing liability for advance tax, income-tax calculated under clause (a) or clause (b) or clause (c) shall not, in each case, be reduced by the aforesaid amount of income-tax which would be deductible or collectible at source during the said financial year under any provision of this Act from any income, if the person responsible for deducting tax has paid or credited such income without deduction of tax or it has been received or debited by the person responsible for collecting tax without collection of such tax."
8. Before us, three years are involved i.e. AY 2011-12, 2012-13 and 2013-14. In AY 2011-12, this proviso is not applicable because the same is applicable from 1/4/2012 i.e. AY 2012-13. Therefore, insofar as AY 2011-12 is concerned, we find no reason to interfere with the order of the ld.CIT(A), but for AY 2012-13 and 2013-14, this proviso is applicable and since the ld.CIT(A) has not considered the amendment to section 209, we feel it proper to send the matter back to the file of the ld.CIT(A) for fresh decision in the light of this proviso to section 209 (1) of the Act.
9. In the result, the appeal of the revenue for AY 2011-12 is dismissed and remaining two appeals for AYs 2012-13 and 2013-14 are partly allowed for statistical purposes.
Order pronounced in the open court on 07th September, 2018 sd/- sd/-
(SUNIL KUMAR YADAV) (A.K. GARODIA)
JUDICIAL MEMBER ACCOUNTANT MEMBER
Place : Bengaluru.
D a t e d : 07/09/2018
srinivasulu, sps
IT(IT)A Nos.2168 to 2170/Bang/2017
Page 15 of 15
Copy to :
1 Appellant
2 Respondent
3 CIT(A)
4 CIT
5 DR, ITAT, Bangalore.
6 Guard file
By order
Senior Private Secretary
Income-tax Appellate Tribunal
Bangalore