M/s. Ansaldo Energia S.P.A, CHENNAI v. ADIT, CHENNAI

ITA 1378/CHNY/2010 | 2000-2001
Pronouncement Date: 11-03-2011 | Result: Partly Allowed

Appeal Details

RSA Number 137821714 RSA 2010
Assessee PAN AACCA4151H
Bench Chennai
Appeal Number ITA 1378/CHNY/2010
Duration Of Justice 6 month(s) 19 day(s)
Appellant M/s. Ansaldo Energia S.P.A, CHENNAI
Respondent ADIT, CHENNAI
Appeal Type Income Tax Appeal
Pronouncement Date 11-03-2011
Appeal Filed By Assessee
Order Result Partly Allowed
Bench Allotted B
Tribunal Order Date 11-03-2011
Date Of Final Hearing 08-03-2011
Next Hearing Date 08-03-2011
Assessment Year 2000-2001
Appeal Filed On 23-08-2010
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL BENCH B CHENNAI BEFORE SHRI ABRAHAM P. GEORGE ACCOUNTANT MEMBER AN D SHRI GEORGE MATHAN JUDICIAL MEMBER .. I.T.A. NO. 1378/MDS/2010 ASSESSMENT YEAR : 2000-01 M/S. ANSALDO ENERGIA SPA VIA. N. LORENZI 8 16152 GENOA ITALY. C/O M/S. S.R. BATLIBOI & CO. TPL HOUSE 3 CENATOPH ROAD CHENNAI-600 018. V. THE ADDITIONAL DIRECTOR OF INCOME-TAX (INTERNATIONAL TAXATION) CHENNAI. (PAN: AACCA4151H) (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI R. VIJAYARAGHAVAN RESPONDENT BY : SHRI K.E.B. RENGARAJAN JR. STANDING COUNSEL O R D E R PER GEORGE MATHAN JUDICIAL MEMBER : THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST THE ORDER OF THE LEARNED CIT(APPEALS)-IV CHENNAI IN APPEAL NO.CIT(A)-IV/CHE /65/09-10 DATED 06-05- 2010 FOR THE ASSESSMENT YEAR 2000-01. I.T.A. NO.1378/MDS/2010 2 2. SHRI R. VIJAYARAGHAVAN ADVOCATE REPRESENTED ON BEHALF OF THE ASSESSEE AND SHRI K.E.B. RENGARAJAN JR. STANDING COUNSEL REP RESENTED ON BEHALF OF THE REVENUE. 3. AT THE TIME OF HEARING IT WAS SUBMITTED BY THE L EARNED AUTHORISED REPRESENTATIVE THAT THERE WERE TWO GROUNDS CHALLENG ED IN THE APPEAL THE FIRST BEING IN REGARD TO THE GROUND NO.2 BEING AGAINST TH E ACTION OF THE LEARNED CIT(A) IN CONFIRMING THE ACTION OF THE ASSESSING OF FICER IN COMPUTING THE TAX AT 20% ON THE INCOME FROM DESIGN AND ENGINEERING SERVI CES BY DISREGARDING THE ORDER OF THE TRIBUNAL. IT WAS THE SUBMISSION THAT THE SECOND ISSUE WAS AGAINST THE ACTION OF THE LEARNED CIT(A) IN CONFIRMING THE LEVY OF INTEREST U/S 234B BY THE ASSESSING OFFICER CONTRARY TO THE ORDER OF THE TRIBUNAL IN THE ASSESSEES OWN CASE. IT WAS THE SUBMISSION THAT THAT IN REGARD TO THE ISSUE OF COMPUTATION OF TAX AT 20% ON THE INCOME FROM DESIGN AND ENGINEERIN G SERVICES THE ASSESSEE DID NOT WISH TO PRESS THE SAID GROUND. CONSEQUENTLY G ROUND NO.2 OF THE ASSESSEES APPEAL STANDS DISMISSED AS NOT PRESSED. 4. IN REGARD TO GROUNDS NO.3 AND 4 IT WAS SUBMITTED BY THE LEARNED AUTHORISED REPRESENTATIVE THAT THE CO-ORDINATE BENC H OF THIS TRIBUNAL IN THE ASSESSEES CASE IN ITA NO. 411/MDS/2006 VIDE AN ORD ER DATED 11.05.2007 HAD CATEGORICALLY HELD THAT THE INTEREST U/S. 234B WHIC H IS MANDATORY IN NATURE CAN BE CHARGED ONLY ON THE AMOUNT WHICH IS PAYABLE BY T HE ASSESSEE AFTER REDUCING THE AMOUNT OF TAX WHICH WAS DEDUCTIBLE. THE LEARNE D AUTHORISED REPRESENTATIVE I.T.A. NO.1378/MDS/2010 3 DREW OUR ATTENTION TO PARA 61 OF THE SAID ORDER WH ERE THE TRIBUNAL HAS HELD THAT INTEREST U/S. 234B WAS LEVIABLE ONLY ON THE AMOUNT WHICH IS PAYABLE BY THE ASSESSEE AFTER REDUCING THE AMOUNT OF TAX WHICH WAS DEDUCTIBLE. HE FURTHER DREW OUR ATTENTION TO THE ORDER GIVING EFFECT TO TH E ORDER OF THE TRIBUNAL AT PAGES 185 TO 193 OF THE PAPER BOOK. IN REGARD TO THE LEV Y OF INTEREST U/S 234B IT WAS THE SUBMISSION THAT THE TRIBUNAL HAD HELD THAT THE INCOME FROM NEYVELI LIGNITE CORPORATION RELATING TO CONTRACTS III AND IV WAS LI ABLE FOR DEDUCTION OF TAX AT SOURCE. HE DREW OUR ATTENTION TO THE ORDER OF THE TRIBUNAL WHEREIN THE CO- ORDINATE BENCH OF THIS TRIBUNAL HAD UPHELD THE ORDE R OF THE LEARNED CIT(A) AND HAD DIRECTED THE ASSESSING OFFICER TO TAX THE PROFI TS AT 7% IN THE CONTEXT OF CONTRACTS I III AND IV . FURTHER THE TRIBUNAL HAD UPHELD THE FINDING OF THE LEARNED CIT(A) THAT TAX WAS LIABLE TO BE DEDUCTED A T 48%. IT WAS THUS THE SUBMISSION THAT AS THE TRIBUNAL HAD HELD THAT THE I NCOME FROM M/S. NEYVELI LIGNITE CORPORATION RELATING TO CONTRACTS III AND I V WAS SUBJECT TO THE TAX DEDUCTION AT SOURCE AT 48% NO INTEREST UNDER SECTI ON 234B OF THE ACT WAS LEVIABLE. IT WAS THUS THE SUBMISSION THE INTEREST OF ` 92 75 455/- AS LEVIED BY THE ASSESSING OFFICER WAS LIABLE TO BE DELETED. 5. IN REPLY THE LEARNED DR SUBMITTED THAT IN REGAR D TO THE CONTRACTS III AND IV NO TDS HAD BEEN MADE BY THE ASSESSEE. IT WAS T HE SUBMISSION THAT THE ASSESSEE HAD ORIGINALLY CLAIMED THAT IN REGARD TO C ONTRACTS III AND IV NO TDS I.T.A. NO.1378/MDS/2010 4 WAS LIABLE TO BE MADE. IT WAS THE SUBMISSION THAT AS NO TDS HAD BEEN MADE THE LEVY OF INTEREST UNDER SECTION 234B WAS RIGHTLY MADE. 6. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. FROM A PERUSAL OF THE ORDER OF THE CO-ORDINATE BENCH OF THIS TRIBUNAL IN THE CASE OF THE ASSESSEE IN ITA NO. 411/MDS/2006 DATED 11-05-2007 IT IS CLEAR IN PARA 6 1 THEREOF THAT INSOFAR AS INTEREST U/S 234B WHICH IS MANDATORY IN NATURE CAN BE CHARGED ONLY ON THE AMOUNT WHICH IS PAYABLE BY THE ASSESSEE AFTER REDUC ING THE AMOUNT OF TAX WHICH WAS DEDUCTIBLE. HERE THE WORD USED IS DEDUCTIBLE AND NOT DEDUCTED. A PERUSAL OF THE PROVISIONS OF SEC. 234B READ WITH SE CTION 209(1)(D) OF THE ACT CLEARLY SHOWS THAT WHEN COMPUTING THE ADVANCE TAX T HE INCOME-TAX CALCULATED IS TO BE REDUCED BY THE AMOUNT OF INCOME-TAX WHICH WOU LD BE DEDUCTIBLE OR COLLECTIBLE AT SOURCE DURING THE SAID FINANCIAL YEA R UNDER ANY PROVISION OF THIS ACT FROM ANY INCOME WHICH HAS BEEN TAKEN INTO ACCOUNT F OR COMPUTING THE CURRENT INCOME OR AS THE CASE MAY BE THE TOTAL INCOME. THUS ONCE THE INCOME IS LIABLE FOR TAX DEDUCTION AT SOURCE THEN ON SUCH INCOME IN TEREST UNDER SECTION 234B CANNOT BE LEVIED. IN THE CIRCUMSTANCES WE ARE OF THE VIEW THAT THE INTEREST UNDER SECTION 234B LEVIED BY THE ASSESSING OFFICER ON THE INCOME FROM M/S. NEYVELI LIGNITE CORPORATION RELATING TO CONTRACTS I II AND IV AMOUNTING TO ` 92 75 455/- IS NOT IN ACCORDANCE WITH THE DIRECTION OF THE CO-ORDINATE BENCH OF THIS TRIBUNAL IN THE ASSESSEES OWN CASE IN ITA NO. 411/MDS/ 2006 DATED I.T.A. NO.1378/MDS/2010 5 11.05.2007 AND CONSEQUENTLY THE SAME STANDS DELETED . IN THE CIRCUMSTANCES THE APPEAL OF THE ASSESSEE STANDS PARTLY ALLOWED. 7. THE ORDER WAS PRONOUNCED IN THE COURT ON 11/03/2 011. SD/- SD/- (ABARAHAM P. GEORGE) (GEORGE MATHAN) ACCOUNTANT MEMBER JUDICIAL MEMBER CHENNAI DATED THE 11 TH MARCH 2011. H. COPY TO: ASSESSEE/AO/CIT (A)/CIT/D.R./GUARD FILE