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Delmas (Uk) Limited, Mumbai vs Ddit (It)-4(2), Mumbai on 27 May, 2020 cites

Otters Club, Mumbai vs Dit (E), Mumbai on 15 June, 2018

14. In the light of the above discussions, we are of the considered view that rather than taking a pedantic view of the rule requiring pronouncement of orders within 90 days, disregarding the important fact that the entire country was in lockdown, we should compute the period of 90 days by excluding at least the period during which the lockdown was in force. We must factor ground realities in mind while interpreting the time limit for the pronouncement of the order. Law is not brooding omnipotence in the sky. It is a pragmatic tool of the social order. The tenets of law being enacted on the basis of pragmatism, and that is how the law is required to interpreted. The interpretation so assigned by us is not only in consonance with the ITA Nos. 2496/Mum/2009, 8423/Mum/2010 Assessment years: 2005-06 and 2007-08 Page 8 of 9 letter and spirit of rule 34(5) but is also a pragmatic approach at a time when a disaster, notified under the Disaster Management Act 2005, is causing unprecedented disruption in the functioning of our justice delivery system. Undoubtedly, in the case of Otters Club Vs DIT [(2017) 392 ITR 244 (Bom)], Hon'ble Bombay High Court did not approve an order being passed by the Tribunal beyond a period of 90 days, but then in the present situation Hon'ble Bombay High Court itself has, vide judgment dated 15th April 2020, held that directed "while calculating the time for disposal of matters made time-bound by this Court, the period for which the order dated 26th March 2020 continues to operate shall be added and time shall stand extended accordingly". The extraordinary steps taken suo motu by Hon'ble jurisdictional High Court and Hon'ble Supreme Court also indicate that this period of lockdown cannot be treated as an ordinary period during which the normal time limits are to remain in force. In our considered view, even without the words "ordinarily", in the light of the above analysis of the legal position, the period during which lockout was in force is to excluded for the purpose of time limits set out in rule 34(5) of the Appellate Tribunal Rules, 1963. Viewed thus, the exception, to 90-day time-limit for pronouncement of orders, inherent in rule 34(5)(c), with respect to the pronouncement of orders within ninety days, clearly comes into play in the present case. Of course, there is no, and there cannot be any, bar on the discretion of the benches to refix the matters for clarifications because of considerable time lag between the point of time when the hearing is concluded and the point of time when the order thereon is being finalized, but then, in our considered view, no such exercise was required to be carried out on the facts of this case.
Income Tax Appellate Tribunal - Mumbai Cites 5 - Cited by 152 - Full Document

Smit Singapore Pte Ltd, Mumbai vs Ddit (It) Rg 2(1), Mumbai on 18 January, 2017

Learned counsel for the assessee, however, has subsequently filed a written note justifying the claim of treaty protection under article 9 and dealing with other arguments which were not subject matter of consideration in the open court proceedings before us. In the case of Set Satellite (supra), Hon'ble jurisdictional High Court has , after taking note of Hon'ble Supreme Court's judgment in the case of CIT Vs Morgan Stanley & Co Inc [(2007) 292 ITR 416 (SC)], held that, "In our opinion considering the judgment, if the correct arm's length price is applied and paid then nothing further would be left to be taxed in the hands of the Foreign Enterprise.". Viewed thus, and having regard to the fact that the payment of arm's length remuneration to the agent, and taxability of income embedded in such payment in India, is not even in dispute before us, the stand of the authorities below cannot be approved. Given this finding, it is immaterial as to whether the DAPE existed or not, for the simple reason that, as the binding legal position is, the existence of DAPE is wholly tax neutral. We are aware that on a conceptual note, a PE, whether a fixed base PE, DAPE or any other type of PE, provides for threshold limits to trigger taxation in the source state, but then if as a result of a DAPE, no additional profits, other than agent's remuneration in the source country - which is taxable in the source state anyway de hors the existence of PE, become taxable in the source state, the very approach to the DAPE profit attribution may indeed seems incompatible with the above legal position. It may sound incongruous from an academic point of view but then that's what the law is. Respectfully following the esteemed views of Hon'ble jurisdictional High Court, we hold that once an agent has been paid arm's length remuneration, and the income embedded in such remuneration has been taxed in India, no further profits can be taxed in the hands of the DAPE. Accordingly, the action of the authorities below, in bringing income of the DAPE- independent of the agency remuneration received by the agent of the assessee, is unsustainable in law. We, therefore, uphold the plea of the assessee and delete the impugned addition of Rs 54,84,213 in the hands of the assessee. Learned representatives fairly agree that in the event of this core issue being decided in favour of the assessee, all other grievances will be rendered academic.
Income Tax Appellate Tribunal - Mumbai Cites 6 - Cited by 6 - Full Document

Pr. Commissioner Of Income Tax-4 vs Morgan Stanley India Co. Pvt. Ltd on 14 January, 2019

Learned counsel for the assessee, however, has subsequently filed a written note justifying the claim of treaty protection under article 9 and dealing with other arguments which were not subject matter of consideration in the open court proceedings before us. In the case of Set Satellite (supra), Hon'ble jurisdictional High Court has , after taking note of Hon'ble Supreme Court's judgment in the case of CIT Vs Morgan Stanley & Co Inc [(2007) 292 ITR 416 (SC)], held that, "In our opinion considering the judgment, if the correct arm's length price is applied and paid then nothing further would be left to be taxed in the hands of the Foreign Enterprise.". Viewed thus, and having regard to the fact that the payment of arm's length remuneration to the agent, and taxability of income embedded in such payment in India, is not even in dispute before us, the stand of the authorities below cannot be approved. Given this finding, it is immaterial as to whether the DAPE existed or not, for the simple reason that, as the binding legal position is, the existence of DAPE is wholly tax neutral. We are aware that on a conceptual note, a PE, whether a fixed base PE, DAPE or any other type of PE, provides for threshold limits to trigger taxation in the source state, but then if as a result of a DAPE, no additional profits, other than agent's remuneration in the source country - which is taxable in the source state anyway de hors the existence of PE, become taxable in the source state, the very approach to the DAPE profit attribution may indeed seems incompatible with the above legal position. It may sound incongruous from an academic point of view but then that's what the law is. Respectfully following the esteemed views of Hon'ble jurisdictional High Court, we hold that once an agent has been paid arm's length remuneration, and the income embedded in such remuneration has been taxed in India, no further profits can be taxed in the hands of the DAPE. Accordingly, the action of the authorities below, in bringing income of the DAPE- independent of the agency remuneration received by the agent of the assessee, is unsustainable in law. We, therefore, uphold the plea of the assessee and delete the impugned addition of Rs 54,84,213 in the hands of the assessee. Learned representatives fairly agree that in the event of this core issue being decided in favour of the assessee, all other grievances will be rendered academic.
Bombay High Court Cites 0 - Cited by 1 - Full Document
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