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09-09-2019, Tetra Pak India, Section 201(1), 90(2), Tribunal Pune

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5 days 4 hours ago #10773 by amit
Section - 201(1), 90(2), 9(1)(vi), 195A, 195
Order Date - 09-09-2019
Favouring - Assessee Partly
Court - Tribunal Pune
Appellant - DDIT
Respondent - Tetra Pak India Pvt. Ltd.
Justice - SUSHMA CHOWLA, JM & ANIL CHATURVEDI, AM
Citation - 919Taxpundit94
Appeal No. - ITA Nos.1857 to 1859/PUN/2014
Asstt. Year - 2009-10 to 2011-12

Order

PER : SUSHMA CHOWLA, JM

This bunch of cross appeals filed by Revenue and assessee are against consolidated order of CIT(A)-IT/TP, Pune, dated 28.07.2014 relating to assessment years 2009-10 to 2011-12 against respective orders passed under section 201(1) and 201(1A) of the Income-tax Act, 1961 (in short ‘the Act’).

2. The cross appeals filed by Revenue and assessee against assessment years 2009-10 to 2011-12 were heard together and are being disposed of by this consolidated order for the sake of convenience

3. In all these appeals, the issue which arises is against order passed under section 201(1) and 201(1A) of the Act i.e. demand raised and interest charged on failure of assessee to deduct tax at source on different items. So, first we take up the appeal for assessment year 2009-10.

4. The Revenue in ITA No.1857/PUN/2014, relating to assessment year 2009-10 has raised the following grounds of appeal:-

1. On the facts and circumstances of this case, the Ld. CIT(A) was not correct in deleting the additions made on account of payment for design services and technical consultancy charges since the assessee company could not prove whether the recipient was the beneficial owner of the royalties or fees for technical services as per Article 12 of the DTAA with Singapore and Switzerland.

2. The CIT(A) erred in not considering the fact that the payment for design services and technical consultancy charges was rightly treated by the AO as FTS under the Act as well as relevant DTAA.

3. The CIT(A) erred in law by concluding that, if the payment, made for design services and technical consultancy charges, is treated as FTS, the same will not satisfy the "make available" clause without discussing the facts as mentioned by the AO in his order.

4. The CIT(A) erred in law in concluding that sec 206AA is not applicable in case of non-residents as the DTAA overrides the Act as per section 90(2).

5. The decision of the CIT(A) is not according to the law and erred in ignoring the memorandum explaining the provisions of the Finance (No. 2) Bill, 2009 which clearly states that the sec 206AA applies to nonresidents and also Press Release of CBDT No.402/92/2006-MC (04 of 2010) dated 20.01.2010 which reiterates that sec. 206AA will also apply to all non-residents in respect of payments/remittances liable to TDS.

6. The CIT(A) is erred in ignoring the decision of the ITAT Bangalore in the case of Bosch Ltd. vs ITO, ITA No.552 to 558 (Bang.) of 2011 dated 11.10.2012, in which it was held that if the recipient has not furnished the PAN to the deductor, the deductor is liable to withhold tax at the higher rates prescribed u/s.206AA.

7. On the facts and circumstances of the case the Ld CIT(A) was not correct in deleting the additions made on account of grossing up u/s 195A of the IT Act, 1961 on account of amounts paid to foreign companies under the head of Royalties/FTS within the meaning of section 9(1)(vi)/9(1)(vii) of the Act as well as Article 12 of the DTAA between India and Switzerland / Singapore as such.

8. On the facts and circumstances of this case, the Ld. CIT(A) was not correct in holding that s nce the assessee did not produce any agreement regarding to grossing up / non grossing up of the amounts liable for deduction u/s 195 the AO was wrong in grossing up the amounts paid.

9. The Ld CIT(A) erred in not considering the fact that the assessee had not deducted TDS u/s 195 from the payment of Royalty/Fees for technical services which clearly shows that the entire payment was made to the AE and no recovery on account of TDS liability u/s 195 has been made by the assessee from the AE and hence it transpires that the TDS liability is borne by the assessee.

5. The assessee in ITA No.1864/PUN/2014, relating to assessment year 2009-10 has raised the following grounds of appeal:- The following Grounds are taken without prejudice to each other. On the facts and in law,

1.1 The learned CIT(A) - IT / TP erred in holding that the assessee company should have deducted TDS on the payments made to Tetra Pak Global Information Management, Singapore of Rs.20,29,919/- on account of software license fees and IT support services on the ground that the same was taxable under the Income Tax Act as well as under the DTAA as Royalty.

1.2 The learned CIT(A) erred in not appreciating that the amount of Rs.20,29,919/- was not covered under Royalties and / or fees for technical services of the DTAA between India and Singapore and that the Appellant Company was not required to withhold tax u/s. 195 on above amounts.

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