DCIT, CHENNAI v. Sift Communications Limited, CHENNAI

ITA 851/CHNY/2013 | 2008-2009
Pronouncement Date: 04-10-2013 | Result: Dismissed

Appeal Details

RSA Number 85121714 RSA 2013
Assessee PAN AAECS9191P
Bench Chennai
Appeal Number ITA 851/CHNY/2013
Duration Of Justice 5 month(s) 1 day(s)
Appellant DCIT, CHENNAI
Respondent Sift Communications Limited, CHENNAI
Appeal Type Income Tax Appeal
Pronouncement Date 04-10-2013
Appeal Filed By Department
Order Result Dismissed
Bench Allotted B
Tribunal Order Date 04-10-2013
Date Of Final Hearing 30-09-2013
Next Hearing Date 30-09-2013
Assessment Year 2008-2009
Appeal Filed On 03-05-2013
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH CHENNAI BEFORE SHRI ABRAHAM P. GEORGE ACCOUNTANT MEMBER AND SHRI V. DURGA RAO JUDICIAL MEMBER I.T.A. NO. 851/MDS/2013 (ASSESSMENT YEAR : 2008-09) THE DEPUTY COMMISSIONER OF INCOME TAX LARGE TAXPAYER UNIT CHENNAI - 600 101. (APPELLANT) V. M/S SIFY COMMUNICATIONS LIMITED (NOW AMALGAMATED WITH SIFY TECHNOLOGIES LIMITED) 2 ND FLOOR TIDEL PARK 4 CANAL BANK ROAD TARAMANI CHENNAI - 600 113. PAN : AAECS 9191 P (RESPONDENT) APPELLANT BY : SHRI GURU BASHYAM JCIT RESPONDENT BY : SHRI SAROJ KUMAR PARIDA ADVOCATE DATE OF HEARING : 30.09.2013 DATE OF PRONOUNCEMENT : 04.10.2013 O R D E R PER ABRAHAM P. GEORGE ACCOUNTANT MEMBER : IN THIS APPEAL FILED BY THE REVENUE IT HAS RAISE D FOUR GROUNDS IN TOTAL OUT OF WHICH GROUNDS 1 AND 4 ARE GENERAL NEEDING NO ADJUDICATION. I.T.A. NO. 851/MDS/13 2 2. VIDE ITS GROUND NO.2 REVENUE ASSAILS ORDER DATE D 25.1.2013 OF COMMISSIONER OF INCOME TAX (APPEALS)-V CHENNAI DE LETING THE ADDITION OF ` 11 10 17 000/- MADE BY THE ASSESSING OFFICER FOR INVOICES RAISED BUT NOT SHOWN AS INCOME. 3. WHEN THE MATTER CAME UP ADV. SAROJ KUMAR PARIDA APPEARING FOR ASSESSEE POINTED OUT THAT LD. CIT(APPEALS) HAD FOLLOWED THE DECISION OF THIS TRIBUNAL ON AN IDENTICAL ISSUED IN ASSESSEE'S OWN CASE IN I.T.A. NO. 1954/MDS/2007 DATED 26 TH MAY 2009 FOR ASSESSMENT YEAR 2003-04. 4. SHRI GURU BASHYAM LEARNED D.R. FAIRLY ADMITTED THAT THE MATTER WAS COVERED AGAINST THE REVENUE BY VIRTUE OF DECISI ON OF THIS TRIBUNAL. NEVERTHELESS ACCORDING TO HIM ONCE INV OICES WERE RAISED IT CONSTITUTED A SALE AND THEREFORE ASSESSEE WAS B OUND TO ACCOUNT FOR IT. 5. WE HAVE HEARD THE CONTENTIONS. ON THE ISSUE REG ARDING ACCOUNTING OF INVOICES ON SERVICES WHICH WERE STILL TO BE RENDERED THIS TRIBUNAL HELD ON REVENUES APPEAL FOR ASSESSME NT YEAR 2003-04 AT PARAS 31 TO 35 OF ITS ORDER AS FOLLOWS:- 31. IT WAS NOTICED BY THE A.O. DURING ASSESSMENT PR OCEEDING THAT IN THE BALANCE SHEET AS ON 31.03.2003 ` 45 67 354 WAS SHOWN AS UNEARNED INCOME UNDER THE HEAD CURRENT LIABIL ITIES AS AGAINST ` I.T.A. NO. 851/MDS/13 3 15 13 162 SHOWN AS ON 31.03.2002. THE DETAILS FURN ISHED BY THE ASSESSEE SHOWED THAT ` 39 68 208 RECEIVED DURING THE YEAR ENDING 31.03.2003 WAS NOT OFFERED FOR TAX AND WAS CARRIED FORWARD TO NEXT YEAR. THE ASSESSEE EXPLAINED AS UNDER:- FOR REVENUE RELATING TO DEVELOPMENT OF E-LEARNING SOFTWARE. THE INVOICES ARE RAISED ON THE BASIS OF PAYMENT MI LESTONES WHERE AS REVENUE ARE RECOGNIZED ON THE BASIS OF THE MODULES DEVELOPED AND DELIVERED. THOUGH THE PAYMEN TS HAS BEEN RECEIVED ON THE BASIS OF INVOICES IF THE PROD UCTS ARE NOT DELIVERED SIFY E-LEARNING NEEDS TO REFUND THE A MOUNT IN FULL TO THE CUSTOMER. 32. THE A.O. REJECTED THE EXPLANATION AND ADDED ` 39 68 208 FOR THE REASONS GIVEN IN HIS ORDER AS UNDER. 4. THE SYSTEM OF ACCOUNTING FOLLOWED BY THE ASSES SEE WAS MERCANTILE. IN SUCH METHOD OF ACCOUNTING THE R ECEIPT ON SALE NEEDS TO BE RE RECOGNIZED ONCE A SALES INVO ICE WAS RAISED. ONCE A CUSTOMER IS BILLED THERE CAN BE NO OTHER TREATMENT EXCEPT TO RECOGNIZE THE SALE IN THE ASSES SEES BOOKS. IT IS ALSO A FACT ADMITTED BY THE ASSESSEE THAT PAYMENTS WERE RECEIVED ON THE BASIS OF INVOICES (SE E PARA E- 3). THE NON RECOGNITION OF A SALE IN THESE CIRCUMSTANC ES DOES NOT DEPEND UPON FINAL APPROVAL OF THE CUSTOMER WHO HAS BEEN MAKING PAYMENTS ON THE BASIS OF INVOICES RAISE D BY ASSESSEE. THE ARGUMENT OF THE ASSESSEE THAT IT NEEDS TO REFU ND THE AMOUNTS TO CUSTOMER UNDER CERTAIN CIRCUMSTANCES DOE S NOT HOLD GROUND. IN CASE A CUSTOMER RETURNS THE PRODUC TS SOLD BY THE ASSESSEE AND THE ASSESSEE IS REQUIRED TO REF UND THE PAYMENTS RECEIVED FROM THE CUSTOMER THE ASSESSEE C AN BOOK THE SAME AS SALES RETURNS. HENCE THE SYSTEM ADOPTED I.T.A. NO. 851/MDS/13 4 BY THE ASSESSEE CANNOT BE ACCEPTED AND SO THE UNREC OGNIZED INCOME OF ` 39 68 208 IS NOW TREATED AS INCOME. 33. THE CIT(A) DELETED THE ADDITION AND HIS ORDER HAS BEEN CHALLENGED BY THE DEPARTMENT IN THE PRESENT APPEAL. 34. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS IN TH E LIGHT OF MATERIAL ON RECORD IT WAS EXPLAINED BY THE LEARNED A.R. THAT THE SOFTWARE DEVELOPMENT WAS THE MAJOR SOURCE OF INCOME . IN THE WRITTEN SUBMISSION FILED BY THE AR BEFORE THE CIT(A ) THE BREAK- UP OF RECEIPTS WAS SHOWN AS UNDER: S.NO. PARTICULARS AMOUNT ( ` IN LACS) C THE MAJOR SERVICE INCOME ARE AS UNDER - INCOME FROM SOFTWARE DEVELOPMENT (IDC) LMNK 1175 INCOME FROM SOFTWARE DEVELOPMENT NON LMNK 162 INCOME FROM IT TRAINING 48 INCOME FROM SOFTWARE SERVICES - LMS 3 INCOME FROM - LL 2 MISCELLANEOUS OTHERS 4 TOTAL 1394 35. THE CIT(A) HAS DELETED THE ADDITION FOR THE RE ASONS GIVEN IN PARAGRAPH 4.3 OF HIS ORDER. HE HAS INTERALIA OBSERVED THAT THE REVENUE EARNED BY THE ASSESSEE FROM SOFTWARE AND CO NSULTANCY SERVICES WAS RECOGNIZED ON DELIVERY OF GOODS / SERV ICES THAT AS PER THE EXISTING SCHEME M/S SATYAM EDUCATION SERVI CES LIMITED WAS ASSIGNED THE RESPONSIBILITY TO SIGN OFF ON CO MPLETION OF THE PROJECT IN THE CASE OF ALL CUSTOMERS THAT THE ASSE SSEE-COMPANY WAS FOLLOWING THE AS 9 PRESCRIBED BY THE INSTITUTE WHICH WAS IN CONFORMITY WITH THE PROVISIONS OF SECTION 145(2) OF THE ACT. THE ASSESSEE WAS REGULARLY FOLLOWING THE PROJECT COMPL ETION METHOD WHICH IS A RECOGNIZED METHOD. THE COMPLETION OF EA CH PROJECT IS DETERMINED BY SIGN OFF. THERE IS NOTHING ON RECO RD TO SHOW THAT THERE WAS ANY INCONSISTENCY IN THIS REGARD. THE CI T(A) FOUND THAT THE DEFERRED INCOME AMOUNTING TO ` 39 68 208 WAS CARRIED FORWARD AND WAS DULY TAKEN INTO ACCOUNT IN THE NEXT ASSESSMENT YEAR. IN THE CIRCUMSTANCES THEREFORE WE SEE NO R EASON TO I.T.A. NO. 851/MDS/13 5 INTERFERE WITH THE CONCLUSIONS REACHED BY THE CIT(A ). THE GROUND NO. 4 IS ACCORDINGLY REJECTED. SINCE IT HAS BEEN CONCEDED BY BOTH THE PARTIES THAT THE FACT SITUATION IS VERY SIMILAR FOR IMPUGNED ASSESSMENT YEAR ALSO WE CANNOT FAULT LD. CIT(APPEALS) FOR DELETING THE ADDITION MADE BY THE ASSESSING OFFICER. 6. GROUND NO.2 OF THE REVENUE STANDS DISMISSED. 7. VIDE ITS GROUND NO.3 GRIEVANCE OF THE REVENUE I S THAT THE CIT(APPEALS) DELETED THE DISALLOWANCE MADE UNDER SE CTION 40(A)(IA) OF INCOME-TAX ACT 1961 (IN SHORT 'THE ACT') ON THE CLAIM OF NETWORKING COSTS FOR WANT OF DEDUCTION OF TAX AT SOURCE. 8. LEARNED A.R. SUBMITTED THAT THIS ISSUE WAS ALSO COVERED IN FAVOUR OF ASSESSEE BY THE DECISION OF THIS TRIBUNAL IN ASSESSEE'S OWN CASE FOR EARLIER YEARS. 9. LEARNED D.R. FAIRLY AGREED WITH THE SUBMISSION O F THE ASSESSEE. HOWEVER ACCORDING TO HIM NETWORKING COSTS WARRANT ED DEDUCTION OF TAX AT SOURCE AND ASSESSEE HAVING NOT DONE ASSESSI NG OFFICER WAS JUSTIFIED IN MAKING DISALLOWANCE UNDER SECTION 40(A )(IA) OF THE ACT. 10. WE HAVE HEARD CONTENTIONS OF BOTH THE PARTIES. ON REVENUES APPEAL FOR ASSESSMENT YEAR 2002-03 THIS TRIBUNAL I N I.T.A. NO. I.T.A. NO. 851/MDS/13 6 1084/MDS/2012 DATED 20.11.2012 HAD HELD AT PARA 13 OF ITS ORDER AS UNDER:- 13. WE HAVE HEARD THE RIVAL CONTENTIONS AND GONE T HROUGH THE RELEVANT FINDINGS AS WELL AS CASE LAW ABOVE SAID. T HE ONLY ISSUE BETWEEN THE PARTIES IS THAT PER REVENUE THE PAYMEN T IN QUESTION MADE BY THE ASSESSEE IS LIABLE TO TDS PROVISIONS AS COMPRISED IN CHAPTER XVII B OF THE ACT WHICH THE ASSESSEE IS D ISPUTING. WE NOTICE THAT THE COORDINATE BENCH IN I.T.A. NO. 1277 AND 1283/MDS/2008 (SUPRA) DECIDED ON 02.02.2012 [IN WHI CH ONE OF US N.S. SAINI A.M. MEMBER OF THE BENCH) HAS HELD AS U NDER: 4. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE ORDERS OF THE LOWER AUTHORITIES AS WELL AS THE CITED DECISIONS. W E FIND THAT THE LD. CIT(A) HAS DECIDED THIS ISSUE BY OBSERVING AS UNDER : 6. I HAVE CAREFULLY CONSIDERED THE FACTS OF THE C ASE AND THE RIVAL SUBMISSIONS AND ALSO EXAMINED THE ISSUES CARE FULLY WITH REFERENCE TO APPLICABILITY OF SEC. 195 WHICH HAS B EEN DENIED BY THE APPELLANT. THE APPELLANT COMPANY IS ENGAGED IN THE BUSINESS OF PROVIDING NETWORKING AND E-COMMERCE SER VICES BY WAY OF INTERNET. IN ORDER TO CARRY OUT ITS BUSINESS OF PROVIDING BROADBAND INTERNET CONNECTIVITY THE APPELLANT COMPA NY HAS ENTERED INTO AGREEMENTS WITH CERTAIN NON-RESIDENT C OMPANIES. THE ASSESSEE THEREFORE MADE CERTAIN REMITTANCES IN FOREIGN CURRENCY TOWARDS CONNECTIVITY CHARGES AND BANDWIDTH CHARGES WHICH ARE CALLED TELECOMMUNICATION CHARGES WITHOUT DEDUCTION OF TAX AT SOURCE. THE ASSESSING OFFICER E XAMINED THE MATTER AND FOUND THAT THE EQUIPMENTS USED BY THE AP PELLANT COMPANY THROUGH WHICH CONNECTIVITY WAS PROVIDED ARE USED BY THE ASSESSEE. THEREFORE IT TREATED THE PAYMENT AS ROYALTY FOR THE USE OF THE EQUIPMENTS. CONSEQUENTLY THE ASSESS ING OFFICER HELD THAT THE APPELLANT COMMITTED DEFAULT U/S 195 I N SO FAR AS IT HAD NOT DEDUCTED TAX AT SOURCE. HE THEREFORE WORKE D OUT SHORT DEDUCTION OF TAX U/S. 201(1) AT RS.3 45 99 751/- AN D RS.3 33 39 659/- FOR A.YS. 2002-03AND 2003-04 RESPE CTIVELY. THE ASSESSING OFFICER ALSO CHARGED INTEREST U/S. 20 1(1A) AMOUNTING TO RS.1 99 6S 927/- AND RS.1 52 71 474/- FOR A.YS. 2002-03 AND 2003-04 RESPECTIVELY. THE ASSESSING OFF ICER HAS THEREFORE TAKEN THE FOLLOWING ARGUMENTS FOR RAISIN G THE IMPUGNED DEMANDS. I.T.A. NO. 851/MDS/13 7 (1) THE SERVICE PROVIDED BY THE TELECOMMUNICATION S ERVICE PROVIDER IN THE CASE IS DIFFERENT FROM THAT PROVIDE D BY THE NON- RESIDENT COMPANIES IN THE PRESENT CASE. (2) TELEPHONE IS FUNDAMENTALLY DIFFERENT FROM A BAN DWIDTH SERVICE. (3) THE BANDWIDTH SERVICE IS NOT A SPECIFIED SERVIC E. (4) EQUIPMENT OF THE NONRESIDENT COMPANY THROUGH WH ICH CONNECTIVITY IS PROVIDED IS USED BY THE ASSESSEE TH E REQUISITE BANDWIDTH ALONG WITH EQUIPMENTS IS FOR EXCLUSIVE FO R THE ASSESSEE WHICH CANNOT BE USED BY OTHERS NOR BY THE NON- RESIDENT COMPANY; ON TERMINATION OF THE AGREEMENT T HE ASSESSEE MUST CEASE TO USE THE SERVICE AND ALL EQUI PMENT OF THE NON-RESIDENT COMPANY. THUS THE PAYMENT BY THE ASSES SEE CAN BE TREATED AS ROYALTY FOR USE OF EQUIPMENT. THE ITO FURTHER ARGUED THAT CASE HAS TO BE DISTINGUISHED FROM THE C ASE OF BSNL AND OTHERS VS. UNION OF INDIA (SUPREME COURT). IN THAT CASE THE SUPREME COURT DEALT WITH THE ISSUE OF USIN G STANDARD FACILITY PROVIDED TO AN AVERAGE HOUSEHOLDER OR CONS UMER WHEREAS IN THE PRESENT CASE IT DEALT WITH PAYMENT F OR USE OF EQUIPMENT. 6:1. IN THE REPORT DATED 07-09-2007 THE ASSESSING OFFICER HAS REITERATED THE ARGUMENTS MADE IN THE IMPUGNED O RDER. 6.2 ON THE OTHER HAND THE LEARNED AR HAS VEHEMENTL Y ARGUED THAT THE LEARNED ASSESSING OFFICER HAS NOT P ROPERLY APPRECIATED THE FACTS OF THE CASE AND SUBMITTED THA T THE BANDWIDTH CHARGES ARE PROVIDED EITHER BY WAY OF UND ERSEA CABLES OR BY SATELLITE EARTH STATIONS AND THE APPEL LANT DOES NOT HAVE ANY CONTROL OVER THE EQUIPMENTS AS IT HAS ONLY LEASED A PART OF THE TRANSPONDER CAPACITY AND NOT LEASED THE TRANSPONDER. THEREFORE THE RIGHT OF' USE OF THE EQ UIPMENT IS NOT EXCLUSIVELY WITH THE APPELLANT. FURTHER THE RI GHT TO USE EQUIPMENT MAINLY ARISES IF THERE IS PHYSICAL EQUIPM ENT AND SINCE THE EQUIPMENTS USED BY THE APPELLANT ARE NOT UNDER ITS CONTROL. THEREFORE THE PAYMENTS MADE DO NOT HAVE T HE CHARACTER OF ROYALTY. 6.3 ON THE ABOVE FACTS AND IN THE CIRCUMSTANCES OF THE CASE ONLY ONE QUESTION ARISES FOR DECISION WHETHER THE R EMITTANCES MADE BY THE APPELLANT COMPANY TO THE FOREIGN PARTIE S WOULD I.T.A. NO. 851/MDS/13 8 FALL WITHIN THE PURVIEW OF SEC. 195(1) WHICH REQUIR ES DEDUCTION OF TAX AT SOURCE. BANDWIDTH IS BOUGHT AND SOLD TO C ONSUMERS AND IT ACTS AS A CONDUIT ONLY. IN THE APPELLANT'S C ASE THERE ARE NO EQUIPMENTS INSTALLED IN ITS PREMISES AND THE CON TRACT ENTERED WITH THE FOREIGN PARTIES IS ONLY FOR THE SE RVICES. MERE USE OF EQUIPMENT IN PROVIDING BANDWIDTH SERVICES WO ULD NOT AMOUNT TO TRANSFER OF RIGHT TO USE. AS A MATTER OF FACT THERE ARE NO GOODS INVOLVED IN THE TRANSACTION AND THE PAYMEN TS ARE MADE ONLY FOR THE USE OF SERVICES. THE WORD 'ROYALT Y' AND ITS MEANING WAS INTRODUCED VIDE FINANCE ACT 1976 AND W AS DEFINED UNDER EXPLANATION 2 TO SEC. 9(1)(I) WHICH W AS FURTHER EXPANDED TO INCLUDE 'THE RIGHT TO USE ANY INDUSTRIA L COMMERCIAL OR SCIENTIFIC EQUIPMENT BUT NOT INCLUDIN G THE AMOUNTS REFERRED TO IN SEC . 44B. THE AMENDMENT WAS MADE BY FINANCE ACT 2001 BY INCORPORATING C1AUSE (IV A) W. E.F. 01-04- 2002 I.E. APPLICABLE FOR A.Y. 2002-03. IN SIMPLE W ORDS THEREFORE ROYALTY MEANS THE PAYMENT OF ANY KIND RE CEIVED AS A CONSIDERATION FOR THE USE OF' OR THE RIGHT TO USE ANY COPY RIGHT OF LITERARY ARTISTIC OR SCIENTIFIC WORK BUT DOES N OT INCLUDE THE WORDS 'USE' OR RIGHT TO USE INDUSTRIAL COMMERCIAL OR SCIENTIFIC EQUIPMENT. IN THE APPELLANT'S CASE THERE IS NO 'RIG HT TO USE EQUIPMENT. THEREFORE THE PAYMENTS MADE DO NOT FALL UNDER 'ROYALTY'. ON SIMILAR FACTS THE ITAT BANGALORE BEN CH IN THE CASE OF ACIT VS. INFOSYS TECHNOLOGIES LTD. IN ITA N OS. 653 AND 969/BANG/2006 DATED 17-10-2007 HELD THAT ANY PA YMENT MADE TO DATABASE OWNERS OUTSIDE INDIA FOR ACCESSING SUCH DATABASES AND THE SERVICES PROVIDED BY SUCH TELECOM OPERATOR TO THE CUSTOMERS DO NOT AMOUNT TO TECHNICAL SERVICE S OR ROYALTY U/S 9(1)(VII) OF THE IT ACT. ACCORDINGLY IT WAS HE LD THAT NO TDS IS TO BE MADE. THE HON'BLE TRIBUNAL ALSO HELD THAT PAYMENTS FOR ACCESSING DATA IS LIKE READING A BOOK IN A LIBR ARY WHICH COULD NOT BE PASSED ON TO ANYONE ELSE. SINCE THE CO PYRIGHT WAS NOT FOR LITERARY ARTISTIC OR SCIENTIFIC WORK THE PAYMENT IS NOT TO BE TREATED AS ROYALTY AND IT WAS HELD THAT NO TD S WAS REQUIRED TO BE MADE. THE HON'BLE ITAT BANGALORE BE NCH IN THE CASE OF ITO VS. MADHURA COATS PVT. LTD. IN ITA NO. 1711 AND 1712JBANG/2005 FOR AYS. 2005-06 AND 2006-07 VID E ORDER DATED 28-09-2006 RELYING ON THE DECISION OF THE AP EX COURT IN THE CASE OF BHARAT SANCHAR NIGAM LTD. (SUPRA)' WHE REIN IT WAS HELD THAT PROVIDING TELECOM SERVICES DO NOT FAL L UNDER THE CATEGORY OF 'GOODS' THE HON'BLE ITAT HELD THAT PAY MENTS MADE FOR CONNECTIVITY FOR TRANSMISSION OF DATA WOULD NOT FALL INTO THE CATEGORY 'ROYALTY' OR 'FEES FOR TECHNICAL I.T.A. NO. 851/MDS/13 9 6:4. IN VIEW OF THESE FACTS AND IN THE CIRCUMSTANCE S OF THE CASE AND THE POSITION OF LAW SET OUT ABOVE IT IS HELD T HAT THE TRANSACTIONS IN RESPECT OF WHICH THE IMPUGNED PAYME NTS WERE MADE WAS PURELY ON ACCOUNT OF SERVICES AND THERE IS NO TRANSFER OF RIGHT TO USE THE GOODS. IN THE RESULT IT IS HELD THAT THE ASSESSING OFFICER WAS NOT JUSTIFIED IN TREATING THE PAYMENT AS ROYALTY AND INVOKING THE PROVISIONS OF SEC. 195 FOR BOTH THE ASSESSMENT YEARS. CONSEQUENTLY THE IMPUGNED ORDER U/S 195 R.W.S. 201(1) AND 201(1A) DATED 21-03-2006 FOR A.YS . 2002-03 AND - 2003-04 IS CANCELLED. 6. ON A QUERY FROM THE BENCH FROM THE LD. D.R. AS TO WHETHER THERE IS ANY CONTRARY DECISION OF ANY OTHER HIGH CO URT THE LD. D.R. REPLIED THAT THE HONBLE DELHI HIGH COURT DECISION IS A LONE DECISION ON THE ISSUE. 7. ON THE ABOVE FACTS WHEN THERE IS ONLY ONE DECI SION OF THE HIGH COURT THEN THE SAME REQUIRES TO BE FOLLOWED BY US. OUR VIEW FINDS SUPPORT FROM THE DECISION OF THE HONBLE BOMBAY HIG H COURT IN CIT VS. GODAVARI DEVI SARAF [SMT] [1978] 113 ITR 589 [B OM] WE THEREFORE CONFIRM THE ORDER OF THE LD. CIT(A) AND DISMISS THE GROUNDS OF APPEALS OF THE REVENUE. 8. IN THE RESULT BOTH THE APPEALS OF THE REVENUE ARE DISMISSED. AFTER GOING THROUGH THE OPERATIVE PORTION ABOVE SAI D THERE IS NO IOTA OF DOUBT THAT THE PAYMENTS IN QUESTION MADE BY THE ASS ESSEE CANNOT BE SUBJECTED TO THE APPLICABILITY OF TDS PROVISIONS CO NTAINED IN THE ACT. THEREFORE IN VIEW OF THE SAME AND IN ORDER TO MAIN TAIN CONSISTENCY WE RELY ON THE ABOVE SAID ORDER OF THE ITAT AND DECIDE THE GROUNDS AGAINST THE REVENUE. THE FACT SITUATION BEING THE SAME WE ARE OF THE OP INION THAT THAT CIT(APPEALS) WAS JUSTIFIED IN DELETING THE DISALLOW ANCE FOR SIMILAR COSTS FOR IMPUGNED ASSESSMENT YEAR ALSO. WE DO NOT FIND ANY REASON TO INTERFERE WITH THE ORDER OF CIT(APPEALS). 11. GROUND NO.3 OF THE REVENUE STANDS DISMISSED. I.T.A. NO. 851/MDS/13 10 12. IN THE RESULT APPEAL FILED BY THE REVENUE IS D ISMISSED. ORDER WAS PRONOUNCED IN THE COURT ON FRIDAY THE 4 TH OF OCTOBER 2013 AT CHENNAI. SD/- SD/- (V.DURGA RAO) (ABRAHAM P. GEORGE) JUDICIAL MEMBER ACCOUNTANT MEMBER CHENNAI DATED THE 4 TH OCTOBER 2013. KRI. COPY TO: (1) APPELLANT (2) RESPONDENT (3) CIT(A)-V CHENNAI-34 (4) CIT CHENNAI-III CHENNAI (5) D.R. (6) GUARD FILE