Asia Satellite Telecommunications Co. Ltd, v. DCIT , Non Resident Circle,

ITA 1484/DEL/2008 | 1998-1999
Pronouncement Date: 23-03-2010 | Result: Partly Allowed

Appeal Details

RSA Number 148420114 RSA 2008
Assessee PAN TEDIN2010T
Bench Delhi
Appeal Number ITA 1484/DEL/2008
Duration Of Justice 1 year(s) 11 month(s) 2 day(s)
Appellant Asia Satellite Telecommunications Co. Ltd,
Respondent DCIT , Non Resident Circle,
Appeal Type Income Tax Appeal
Pronouncement Date 23-03-2010
Appeal Filed By Assessee
Order Result Partly Allowed
Bench Allotted D
Tribunal Order Date 23-03-2010
Date Of Final Hearing 23-03-2010
Next Hearing Date 23-03-2010
Assessment Year 1998-1999
Appeal Filed On 21-04-2008
Judgment Text
I.T.A. NO. 1484-1491 /DEL/2008 1/12 IN THE INCOME TAX APPELLATE TRIBUNAL NEW DELHI BENCH D BEFORE SHRI K. D. RANJAN ACCOUTANT MEMBER AND SHRI GEORGE MATHAN JUDICIAL MEMBER ITA NO. 1484 1485 1486 1487 1488 1489 1490 & 1491 1491/DEL/2008 (ASSESSMENT YEAR 1998-99 1999-2000 2000-01 2001- 02 2002-03 2003-04 2004-05 2005-06 RESPECTIVELY) ASIA SATELLITE TELECOMMUNICATIONS VS. DCIT NR CIRC LE COMPANY LTD. SUCHETA BHAWAN NEW DELHI LOK KALYAN SAMITI (GAE NO.2) 110A VISHNU DIGAMBAR MARG NEW DELHI-110 002. (APPELLANTS) (RESPONDENTS) PAN / GIR NO. APPLIED FOR APPELLANT BY: SHRI C.S. AGGARWAL SR. ADVOCATE SHRI SANDEEP PURI RAJIV ANAND & SHRI ARVIND RAJAN CAS RESPONDENT BY: SHRI ASHWANI MAHAJAN CIT DR ORDER PER BENCH: 1. THESE ARE THE APPEALS AGAINST THE ORDER OF CIT(A ) XXIX NEW DELHI IN APPEAL NO.30/01-02 10 9 8 195/04-05 40 218 & 109/06-07 DATED 29.902.2008 FOR THE ASSESSMEN T YEARS 1998-99 1999-2000 2000-01 2001-02 2002-03 I.T.A. NO. 1484-1491 /DEL/2008 2/12 2003-04 2004-05 & 2005-06. IN ALL THESE APPEALS THE ASSESSEE HAS CHALLENGED THE ORDER OF LD. CIT(A) IN RESPECT OF THE VALIDITY OF THE ASSESSMENT MORE SPECIFICALLY IN GROUND NO.1 FOR THE ASSESSMENT YEARS 1998-99 1999- 2000 & 2000-01. NO SPECIFIC ARGUMENT HAD BEEN PLAC ED IN REGARD TO THIS GROUND AND CONSEQUENTLY THE SAME IS DISMISSED AS NOT CONTESTED. 2. IN GROUND NO.2 FOR THE ASSESSMENT YEAR 1998-99 1999- 2000 2000-01 AND GROUND NO.1 FOR THE ASSESSMENT YE ARS 2001-02 2002-03 2003-04 2003-04 2004-05 & 2005- 06 THE ASSESSEE HAS CHALLENGED THE FINDING OF LD. CIT( A) IN HOLDING THAT THE ASSESSEE HAS BUSINESS CONNECTION I N INDIA. IT WAS THE SUBMISSION BY THE LD. A.R. THAT THIS ISS UE HAD COME UP FOR THE ASSESSMENT YEAR 1997-98 AND THE ISS UE HAD BEEN HELD AGAINST THE ASSESSEE WHEREIN IT HAD B EEN HELD THAT THERE WAS A BUSINESS CONNECTION IN INDIA BUT THE ASSESSEE DID NOT CARRY ANY BUSINESS ACTIVITIES IN I NDIA. IT WAS THE FURTHER SUBMISSION THAT THIS ISSUE WAS PEND ING BEFORE THE HON'BLE HIGH COURT OF DELHI AND THE MATT ER WAS ALSO PARTLY HEARD. HE HAD NO OBJECTION IF THIS ISS UE IS RESTORED TO THE FILE OF THE A.O. TO DECIDE THE ISSU E IN LINE WITH THE DECISION OF HON'BLE HIGH COURT OF DELHI. IN I.T.A. NO. 1484-1491 /DEL/2008 3/12 REPLY THE LD. D.R. SUBMITTED THAT THE ORDER OF THI S TRIBUNAL FOR THE ASSESSMENT YEAR 1997-98 WAS TO BE FOLLOWED. 2.1 WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. IT I S NOTICED THAT THIS ISSUE HAS ALREADY BEEN DECIDED BY US FOR THE ASSESSMENT YEAR 1997-98 IN I.T.A. NO. 166 AND 861/DEL/2001 DATED 01.11.2002 REPORTED IN 85 ITD 47 8. AS IT IS NOTICED THAT THIS ISSUE WAS DECIDED BY US FOR THE ASSESSMENT YEAR 1997-98 RESPECTFULLY FOLLOWING THE DECISION OF COORDINATE BENCH OF THIS TRIBUNAL IN TH E ASSESSEES OWN CASE FOR THE ASSESSMENT YEAR 1997-98 THE FINDINGS OF LD. CIT(A) ON THIS ISSUE IS UPHELD. CONSEQUENTLY THE GROUND NO.2 FOR THE ASSESSMENT YE AR 1998-99 1999-2000 2000-01 AND GROUND NO.2 FOR THE ASSESSMENT YEAR 2001-02 TO 2005-06 STAND DISMISSED. 3. IN GROUNDS NOS. 3 & 4 FOR THE ASSESSMENT YEARS 1 998-99 1999-2000 & 2000-01 GROUNDS NOS. 2 & 3 FOR THE ASSESSMENT YEARS 2001-02 GROUNDS NOS. 2 3 & 4 FOR THE ASSESSMENT YEARS 2002-03 TO 2005-06 THE ASSESSEE H AS CHALLENGED THE ACTION OF THE LD. CIT(A) IN HOLDING THAT THE INCOME OF THE ASSESSEE HAD THE CHARACTERISTIC OF RO YALTY AS DEFINED IN CLAUSE (III) READ WITH CLAUSE (VI) OF EX PLANATION (2) TO SECTION 9(1)(VI) OF THE I. T. ACT. IT WAS F AIRLY AGREED BY BOTH THE SIDES THAT THIS ISSUE WAS SQUARELY COVE RED BY I.T.A. NO. 1484-1491 /DEL/2008 4/12 THE DECISION OF THIS TRIBUNAL IN ASSESSEES OWN CAS E FOR THE ASSESSMENT YEAR 1997-98 REFERRED TO SUPRA. EVEN TH OUGH SUBSTANTIAL ARGUMENTS HAD BEEN PLACED BY THE LD. A. R. AND ATTEMPT HAD BEEN MADE TO DISTINGUISH THE FACTS FOR THE RELEVANT ASSESSMENT YEARS AS AGAINST THE FACTS FOR THE ASSESSMENT YEAR 1997-98 WE ARE NOT INCLINED TO ACC EPT THE ARGUMENT MORE SPECIFICALLY THE FACTS AS GIVEN T HE WRITTEN SUBMISSION. IN THESE CIRCUMSTANCES RESPEC TFULLY FOLLOWING THE DECISION OF COORDINATE BENCH OF THIS TRIBUNAL IN THE ASSESSEES OWN CASE FOR THE ASSESSM ENT YEAR 1997-98 IN THE CASE OF THE ASSESSEE AS ALSO TH E DECISION IN THE CASE OF N V SATELLITE REPORTED IN 3 19 ITR (AT) 269 S.B. THE FINDING OF LD. CIT(A) ON THIS ISS UE STANDS CONFIRMED. CONSEQUENTLY GROUNDS RAISED BY T HE ASSESSEE CHALLENGING THE ACTION OF LD. CIT(A) IN TR EATING THE INCOME OF THE ASSESSEE AS ROYALTY STANDS DISMI SSED. 4. IN GROUND NO.5 FOR THE ASSESSMENT YEAR 1998-99 1999- 2000 GROUNDS NOS. 5 6 & 7 FOR THE ASSESSMENT YEAR 2000-01 GROUNDS NOS. 4 5 6 FOR THE ASSESSMENT YEAR S 2001-02 AND GROUNDS NOS. 5 6 7 FOR THE ASSESSMENT Y EAR 2002-03 2003-04 AND 2005-06 AND GROUNDS NOS. 5 & 6 FOR THE ASSESSMENT YEAR 2004-05 THE ASSESSEE HAS CHALLENGED THE ACTION OF LD. CIT(A) IN HOLDING THAT THE I.T.A. NO. 1484-1491 /DEL/2008 5/12 INCOME EARNED BY THE ASSESSEE FROM ITS NON RESIDENT CUSTOMERS WAS TAXABLE U/S 9(1)(VI)(C) OF THE I. T. ACT. IT WAS FAIRLY AGREED BY BOTH THE SIDES THAT THIS ISSUE WAS ALSO SQUARELY COVERED BY THE DECISION OF COORDINATE BENC H OF THIS TRIBUNAL IN THE ASSESSEES OWN CASE FOR THE ASSESSMENT YEAR 1997-98 REFERRED TO SUPRA. IT WAS THE SUBMISSION THAT THE FACTS DURING THE PRESENT ASSESS MENT YEARS WERE DIFFERENT FOR WHICH PURPOSE THE LD. A.R. HAD PLACED SUBSTANTIAL ARGUMENTS AND HAD ALSO FILED DET AILED WRITTEN SUBMISSIONS. IN REPLY THE LD. D.R. VEHEMEN TLY SUPPORTED THE ORDERS OF THE A.O. AND THE LD. CIT(A) . IT WAS THE SUBMISSION THAT THERE WAS NO DIFFERENCE IN THE FACTS FOR THE RELEVANT ASSESSMENT YEARS AND FOR THE ASSESSMENT YEAR 1997-98 AND THE DECISION OF THE COORDINATE BENCH OF THIS TRIBUNAL SHOULD SQUARELY B E APPLIED. 4.1 WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. WE HA VE ALSO PERUSED THE WRITTEN SUBMISSION AS FILED BY THE LD. A.R. WE ARE UNABLE TO AGREE WITH THE LD. A.R. THAT THE F ACTS DURING THE RELEVANT ASSESSMENT YEARS ARE DIFFERENT FROM THE FACTS AS WERE AVAILABLE FOR THE ASSESSMENT YEAR 1997- 98. IN THESE CIRCUMSTANCES RESPECTFULLY FOLLOWING THE DECISION OF COORDINATE BENCH OF THIS TRIBUNAL IN TH E I.T.A. NO. 1484-1491 /DEL/2008 6/12 ASSESSEES OWN CASE FOR THE ASSESSMENT YEAR 1997-98 THE FINDINGS OF LD. CIT(A) ON THIS ISSUE STANDS CONFIRM ED. CONSEQUENTLY ALL THE GROUNDS RAISED BY THE ASSESSEE FOR THE RELEVANT ASSESSMENT YEARS AGAINST THE ACTION OF LD. CIT(A) IN HOLDING THAT THE INCOME EARNED BY THE ASS ESSEE FROM THE NON RESIDENT CUSTOMERS WERE TAXABLE U/S 9(1)(VI)(C) OF THE I. T. ACT STANDS DISMISSED. 5. IN GROUNDS NOS. 6 7 & 8 FOR THE ASSESSMENT YEAR 1998-99 GROUNDS NOS. 6 7 8 & 9 FOR THE ASSESSMENT YEAR 19 99- 2000 GROUNDS NOS. 8 TO 13 FOR THE ASSESSMENT YEAR 2000- 01 GROUNDS NOS. 7 TO 11 FOR THE ASSESSMENT YEAR 20 01- 02 GROUNDS NOS. 8 TO 12 FOR THE ASSESSMENT YEAR 20 02- 03 GROUNDS NOS. 8 TO 14 FOR THE ASSESSMENT YEAR 20 03- 04 GROUNDS NOS. 7 TO 12 FOR THE ASSESSMENT YEAR 20 04-05 AND GROUNDS NOS. 8 TO 13 FOR THE ASSESSMENT YEAR 20 05-06 AGAINST THE ACTION OF LD. CIT(A) IN QUANTIFYING THE INCOME ATTRIBUTABLE I.E. LIABLE TO BE TAXED IN INDIA IT W AS FAIRLY AGREED BY BOTH THE SIDES THAT THIS ISSUE WAS SQUARE LY COVERED BY THE DECISION OF COORDINATE BENCH OF THIS TRIBUNAL IN THE ASSESSEES OWN CASE FOR THE ASSESSM ENT YEAR 1997-98 REFERRED TO SUPRA WHEREIN THIS ISSUE W AS RESTORED TO THE FILE OF THE A.O. FOR RE-ADJUDICATIO N AFTER TAKING INTO CONSIDERATION THE FACT THAT THE GROSS R ECEIPTS I.T.A. NO. 1484-1491 /DEL/2008 7/12 RELATABLE TO INDIA WAS TO BE CONSIDERED AND THE EXP ENSES DEDUCTIBLE IN RELATION TO THE INCOME ATTRIBUTABLE T O INDIA WAS TO BE ALLOWED. IT WAS THE SUBMISSION THAT IN T HE ORDER GIVING EFFECT TO THE ORDER OF THIS TRIBUNAL FOR THE ASSESSMENT YEAR 1997-98 REFERRED TO SUPRA THE A.O. HAD MADE THE COMPUTATION AND THE SAME WAS SUBSEQUENTLY FIXED @ 33.11%. IT WAS THE SUBMISSION THAT AN AD-H OC @ 33.11% SHOULD NOT BE APPLIED AND THE FIGURE FOR EAC H YEAR SHOULD BE CONSIDERED SEPARATELY. IT WAS AGREED THAT THE DECISION GIVEN BY THE TRIBUNAL REFERRED TO SUPRA FO R THE ASSESSMENT YEAR 1997-98 FOR COMPUTING THE INCOME ATTRIBUTABLE FOR EACH OF THE SUBSEQUENT ASSESSMENT YEARS AND THE METHOD OF COMPUTATION AS SPECIFIED IN THE O RDER OF THE TRIBUNAL BE FOLLOWED FOR THESE YEARS ALSO. WE H AVE CONSIDERED HE RIVAL SUBMISSIONS. IT IS NOTED THAT THE COORDINATE BENCH OF THIS TRIBUNAL HAS LAID DOWN THE METHOD OF COMPUTATION OF THE INCOME ATTRIBUTABLE FO R THE ASSESSMENT YEAR 1997-98. AS THE METHOD OF COMPUTAT ION HAS NOT BEEN SHOWN TO BE ERRONEOUS BY EITHER SIDE IT IS HELD THAT THE SAME METHOD IS TO BE APPLIED FOR COMP UTING THE INCOME ATTRIBUTABLE FOR THE YEAS IN APPEAL IN T HIS ORDER. IN THESE CIRCUMSTANCES THE GROUNDS RAISED BY THE AS SESSEE I.T.A. NO. 1484-1491 /DEL/2008 8/12 AGAINST THE QUANTIFICATION OF INCOME ATTRIBUTABLE S TANDS PARTLY ALLOWED FOR STATISTICAL PURPOSES. 6. IN REGARD TO GROUND NO.9 FOR THE ASSESSMENT YEAR 1998- 99 GROUNDS NOS. 10 & 11 FOR THE ASSESSMENT YEAR 19 99- 2000 GROUNDS NOS. 14 & 15 FOR THE ASSESSMENT YEAR 2000-01 GROUNDS NOS. 12 & 13 FOR THE ASSESSMENT YE AR 2001-02 GROUNDS NOS. 13 & 14 FOR THE ASSESSMENT YE AR 2002-03 GROUNDS NO. 15 FOR THE ASSESSMENT YEAR 200 3- 04 GROUND NO.13 FOR THE ASSESSMENT YEAR 2004-05 AN D GROUND NO.14 FOR THE ASSESSMENT YEAR 2005-06 IT WA S SUBMITTED THAT THESE GROUNDS WERE AGAINST THE LEVY OF INTEREST U/S 234B OF THE ACT. IT WAS SUBMITTED BY THE LD. A.R. THAT THIS ISSUE WAS ALSO SQUARELY COVERED BY T HE DECISION OF COORDINATE BENCH OF THIS TRIBUNAL IN TH E ASSESSEES OWN CASE FOR THE ASSESSMENT YEAR 1997-98 REFERRED TO SUPRA WHEREIN THIS TRIBUNAL HAD DELETED THE LEVY OF INTEREST AFTER CONSIDERING THAT THE INCOME OF THE ASSESSEE WAS LIABLE FOR TAX DEDUCTION AT SOURCE. I T WAS THE FURTHER SUBMISSION THAT EVEN IN VIEW OF THE DECISIO N OF SPECIAL BENCH OF THIS TRIBUNAL IN THE CASE OF MOTOR OLA REPORTED IN 95 ITD 269 INTEREST U/S 234B WAS NOT L EVIABLE. IN REPLY THE LD. D.R. SUBMITTED THAT THE INTEREST U/S 234B WAS CHARGEABLE IN VIEW OF THE DECISION OF HON'BLE H IGH I.T.A. NO. 1484-1491 /DEL/2008 9/12 COURT OF DELHI IN THE CASE OF INSILCO REPORTED IN 2 010 TOIL 167 H.C. DEL. IT. IT WAS SUBMITTED THAT AS PE R THE DECISION OF HON'BLE HIGH COURT OF DELHI THE PLEA O F BONA FIDE DEFAULT WOULD BE TOTALLY ALIEN TO THE ISSUE OF LEVY OF INTEREST AND THE DELETION OF INTEREST U/S 234B OF T HE ACT. 6.1 WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. THE DECISION REFERRED TO BY THE LD. D.R. IN THE CASE OF INSILCO LTD. REFERRED SUPRA WOULD NOT HELP THE CASE OF THE REVEN UE IN SO FAR AS IT WAS NOT A DECISION IN WHICH THE QUESTION AS TO WHETHER WHEN THE INCOME OF THE ASSESSEE WAS LIABLE FOR TAX DEDUCTION AT SOURCE INTEREST U/S 234B WAS LEVIABLE OR NOT WHICH WAS CONSIDERED. IT WAS A CASE WHERE THE ISSU E WHETHER THE BONA FIDE OF THE ASSESSEE COULD BE CONS IDERED FOR THE PURPOSE OF LEVY OF INTEREST U/S 234B AND TH E CASE BEFORE US IS NOT A CASE WHERE BONA FIDE OF THE ASSE SSEE HAD BEEN RAISED. THE CASE OF THE ASSESSEE IS THAT IF TH E INCOME IS LIABLE TO BE TREATED AS ROYALTY THEN THE SAME IS LIABLE FOR TDS U/S 195 OF THE ACT. IN THESE CIRCUMSTANCES AS THE INCOME OF THE ASSESSEE HAS BEEN HELD TO BE THE ROYA LTY THE SAME IS LIABLE FOR DEDUCTION U/S 195 OF THE ACT AND AS THE INCOME OF THE ASSESSEE IS LIABLE FOR TAX DEDUCTION AT SOURCE NO INTEREST U/S 234B IS LEVIABLE. IN THESE CIRCUMS TANCES RESPECTFULLY FOLLOWING THE DECISION OF COORDINATE B ENCH OF I.T.A. NO. 1484-1491 /DEL/2008 10/12 THIS TRIBUNAL IN THE ASSESSEES OWN CASE AS ALSO TH E DECISION OF SPECIAL BENCH OF THIS TRIBUNAL IN THE C ASE OF MOTOROLA THE INTEREST LEVIED U/S 234B FOR ALL THE ASSESSMENT YEARS UNDER APPEAL STAND CANCELLED. IN THESE CIRCUMSTANCES THE ORDERS OF LOWER AUTHORITIES STAN D MODIFIED TO THIS EXTENT AND THE GROUNDS ON THIS ISS UE STAND ALLOWED. 7. IN GROUNDS 10 & 11 FOR THE ASSESSMENT YEAR 1998- 99 GROUNDS NOS. 15 & 16 FOR THE ASSESSMENT YEAR 2002-0 3 THE ASSESSEE HAS CHALLENGED THE LEVY OF INTEREST U/ S 234C OF THE ACT. IT WAS SUBMITTED BY THE LD. D.R. THAT THE LEVY IS CONSEQUENTIAL IN NATURE AND THE SAME HAS TO BE LEVI ED. THE LEVY OF INTEREST U/S 234C IS FOR THE DIFFERENCE OF ADVANCE TAX. IF THE ADVANCE TAX IS PAYABLE THEN INTEREST U /S 234C IS LEVIABLE. BUT IF THE TDS IS LIABLE TO BE MADE THE SAME TAKES THE NATURE OF ADVANCE TAX AND IT IS ONLY ON T HE SHORTFALL BETWEEN THE TDS LEVIABLE AND THE ADVANCE TAX PAYABLE THE LEVY CAN BE MADE. IN THESE CIRCUMSTANC ES THE COMPUTATION OF THE LEVY OF INTEREST U/S 234C IS RES TORED TO THE FILE OF THE A.O. FOR RECOMPUTATION AFTER VERIFY ING AS TO WHETHER THERE HAS BEEN ANY SHORTFALL OF ADVANCE TAX IN ACCORDANCE WITH LAW. I.T.A. NO. 1484-1491 /DEL/2008 11/12 8. GROUNDS NOS. 12 14 FOR THE ASSESSMENT YEAR 199 9-2000 GROUNDS 6-18 FOR THE ASSESSMENT YEAR 2000-01 GROUN DS 14-16 FOR THE ASSESSMENT YEAR 2001-02 GROUNDS 17-1 9 FOR THE ASSESSMENT YEAR 2002-03 GROUNDS 16-18 FOR THE ASSESSMENT YEAR 2003-04 GROUNDS NOS. 14-16 FOR THE ASSESSMENT YEAR 2005-06 HAVE NOT BEEN PRESSED CONSEQUENTLY THE SAME ARE DISMISSED AS NOT PRESSED. 9. AT THE TIME OF HEARING IT WAS FURTHER SUBMITTED BY THE LD. A.R. THAT WHILE GIVING EFFECT TO THE ORDER OF THIS TRIBUNAL FOR QUANTIFYING THE INCOME ATTRIBUTABLE AND TAXABLE IN INDIA WHICH HAS BEEN RESTORED TO THE FILE OF THE A.O. TH E ASSESSEE SHOULD NOT BE PUT INTO A WORSE POSITION TH AN TO WHICH HE WAS AFTER THE ORDER OF CIT(A). IT WAS THE FURTHER SUBMISSION THAT THIS IS BECAUSE THE REVENUE HAS NOT FILED ANY APPEAL AGAINST THE ORDER OF THE CIT(A). WE FIND MERIT IN THE SUBMISSION OF THE LD. A.R. CONSEQUENTLY IT IS DIRECTED THAT AS THE REVENUE HAS NOT FILED ANY APPE AL AGAINST THE ORDER OF THE LD. CIT(A) WHILE GIVING EF FECT TO THE ORDER OF THIS TRIBUNAL IF THE INCOME OF THE ASS ESSEE ATTRIBUTABLE AND TAXABLE IN INDIA EXCEEDS THE INCOM E AS COMPUTED AFTER GIVING EFFECT TO THE ORDER OF THE CI T(A) THE SAME SHALL BE RESTRICTED TO THE AMOUNT AS ARRIV ED AT ON GIVING EFFECT TO THE ORDER OF CIT(A). IN THESE I.T.A. NO. 1484-1491 /DEL/2008 12/12 CIRCUMSTANCES THE APPEAL OF THE ASSESSEE IS PARTLY ALLOWED FOR STATISTICAL PURPOSES. 10. IN THE RESULT ALL THE APPEALS OF THE ASSESSEE STAND PARTLY ALLOWED FOR STATISTICAL PURPOSES. 11. THIS DECISION WAS PRONOUNCED IN THE OPEN COURT ON 23 RD MAR. 2010. SD./- SD./- (K.D.RANJAN) (GEORGE MATHAN) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED:23 RD MAR. 2009 SP. COPY FORWARDED TO 1. APPELLANT 2. RESPONDENT 3. CIT TRUE COPY: BY ORDER 4. CIT(A) 5. DR DY. REGISTRAR ITAT NEW DELHI