DDIT (IT)-1(1), MUMBAI v. THE FIRM A.P.MOLLER, MUMBAI

ITA 5907/MUM/2008 | 1998-1999
Pronouncement Date: 27-10-2010 | Result: Dismissed

Appeal Details

RSA Number 590719914 RSA 2008
Assessee PAN AAACA8917F
Bench Mumbai
Appeal Number ITA 5907/MUM/2008
Duration Of Justice 2 year(s) 1 month(s)
Appellant DDIT (IT)-1(1), MUMBAI
Respondent THE FIRM A.P.MOLLER, MUMBAI
Appeal Type Income Tax Appeal
Pronouncement Date 27-10-2010
Appeal Filed By Department
Order Result Dismissed
Bench Allotted L1
Tribunal Order Date 27-10-2010
Date Of Final Hearing 21-06-2010
Next Hearing Date 21-06-2010
Assessment Year 1998-1999
Appeal Filed On 26-09-2008
Judgment Text
1 IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH L MUMBAI BEFORE SHRI R.V. EASWAR HONBLE PRESIDENT AND SHRI J. SUDHAKAR REDDY ACCOUNTANT MEMBER I.T.A. NO. 5907 & 5908/MUM/2008. ASSESSMENT YEAR : 1998-99 & 2000-01. DY. DIRECTOR OF INCOME-TAX (IT) THE FIRM A.P. MOLLER 1(1) MUMBAI. VS. C/O MAERSK INDIA PVT. LTD. C.G. HOUSE 11 TH FLOOR DR. ANNIE BESANT ROAD PRABHADEVI MUMBAI 400 025. PAN AAACA8917F. (APPELLANT) (RE SPONDENT) APPELLANT BY : SHRI NARENDRA SINGH RESPONDENT BY : SHRI DIVESH CHAWLA. . O R D E R PER J. SUDHAKAR REDDY : THESE ARE THE APPEALS FILED BY THE REVENUE DIR ECTED AGAINST THE SEPARATE ORDERS OF THE CIT(APPEALS)-XXXI MUMBAI D ATED 16-07-2008 FOR ASSESSMENT YEAR 1998-99 AND 2000-01 ON THE FOLLOWI NG GROUNDS : 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE A ND IN LAW THE LD. CIT(A) HAS ERRED IN DELETING THE INTEREST CHARGED U NDER SECTION 234B OF THE INCOME-TAX ACT 1961 ON THE GROUND THAT BEING A NON-RESIDENT ASSESSEE THERE WAS NO LIABILITY 2 I) THAT INTEREST IS IN THE NATURE OF COMPENSATORY PAYM ENT AND IS OF PENAL IN CHARACTER. II) THAT SINCE THE ASSESSEE FAILED TO PAY THE ADVANCE-T AX THE PROVISIONS OF SECTION 234B HAVE BEEN CORRECTLY APPL IED BY THE ASSESSING OFFICER. 2. THE APPELLANT PRAYS THAT THE ORDER OF THE LD. CIT(A ) ON THE ABOVE GROUNDS BE SET ASIDE AND THAT OF THE AO RESTORED. 2. SHRI NARENDRA SINGH THE LEARNED CIT-DR AND SHR I DIVESH CHAWLA LEARNED COUNSEL FOR THE ASSESSEE AGREED THAT THE I SSUE IN QUESTION I.E. WHETHER INTEREST IS LEVIABLE U/S 234B WHEN A DUTY CAST ON THE PAYER TO DEDUCT THE TAX AT SOURCE AND THE PAYER DOES NOT DO SO IS COVERED IN FAVOUR OF THE ASSESSEE AND AGAINST THE REVENUE BY THE DECISION OF THE JURISDIC TIONAL HIGH COURT IN THE CASE OF DIRECTOR OF INCOME-TAX (IT) VS. M/S. NGC NETWORK A SIA LLC REPORTED IN 313 187 (BOM.). 3. IN THIS JUDGMENT THE HONBLE BOMBAY HIGH COURT HELD AS FOLLOWS: WE ARE IN RESPECTFUL AGREEMENT WITH THE VIEW TAKE N IN CASE OF COMMISSIONER OF INCOME TAX & ANR. VS. SEDCO FOREX INTERNATIONAL DRILLING CO. LTD. (2003) 264 ITR 320 BY THE UTTARAN CHAL HIGH COURT. WE ARE CLEARLY OF THE OPINION THAT WHEN A DUTY IS CAST ON THE PAYER TO PAY THE TAX AT SOURCE ON FAILURE NO INTEREST CAN BE IMPOSED ON T HE PAYEE-ASSESSEE. 3 4. A SIMILAR VIEW WAS TAKEN BY THE F-BENCH OF THE MUMBAI TRIBUNAL IN ASSESSEES OWN CASE FOR THE ASSESSMENT YEAR 20 01-02. 5. RESPECTFULLY FOLLOWING THE SAME WE UPHOLD THE ORDER OF THE FIRST APPELLATE AUTHORITY WHEREIN HE HAS HELD THAT THE EN TIRE INCOME WAS LIABLE TO DEDUCTION OF TAX AT SOURCE AND IN SUCH A SITUATION NO INTEREST U/S 234B CAN BE LEVIED. 5. IN THE RESULT THE APPEALS OF THE REVENUE ARE DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 2 7 TH OCT. 2010. SD/- S D/- (R.V. EASWAR) (J. SUDHAK AR REDDY) PRESIDENT AC COUNTANT MEMBER MUMBAI DATED: 27 TH OCT. 2010. WAKODE COPY TO : 1. APPELLANT 2. RESPONDENT 3. C.I.T. 4. CIT(A) 5. DR L-BENCH (TRUE COPY) BY ORDER ASSTT. R EGISTRAR ITAT MUMBAI B ENCHES MU MBAI.