Dr. Pronnoy Roy, New Delhi vs Department Of Income Tax

Assessee by : Smt. Lalitha Krishnamurthy, CA. Revenue by : Shri Vikram Sahay, Sr.DR.

Date of hearing : 09.04.2015 Date of pronouncement : 06.05.2015

ORDER

PER G.C. GUPTA, GUPTA, VP :

This appeal by the Revenue for the assessment year 2008-09 is directed against the order of learned CIT(A)-XVI, New Delhi dated 29th August, 2012.

2. The grounds of appeal raised by the Revenue read as under:-

"1. Whether on the facts & in the circumstances of the case, the ld.CIT(A) has erred in deleting the addition of Rs.16,66,37,966/- by not appreciating the fact that the Japan Branch neither has an independent identity nor it has any business activity of its own and the outsourcing cost of payment made by the assessee to HCL Japan is deemed income within the meaning of Sec. 9(1)(vii) of the Act.

2. Whether on the facts & in the circumstances of the case, the ld.CIT(A) has erred in not appreciating the fact 2 ITA-5802/Del/2012

that the invoices filed by the assessee shows that NEC HCL Systems Technology India is the exporter and NEC System Technologies Ltd. Japan is the buyer and the source of payment or income of the non-resident is India.

3. Whether on the facts & in the circumstances of the case, the ld.CIT(A) has erred in not appreciating the fact that since the assessee has incurred outsourcing expenses in the nature of fees for technical services and since the income is chargeable to tax in India within the meaning of Sec. 40(a)(i) of the Act, TDS must be deducted on such payments as per the requirement of Sec. 195 of the Act."

3. Learned DR has relied on the order of the Assessing Officer. The learned counsel for the assessee submitted that the only issue in this appeal of the Revenue is regarding validity of penalty imposed under Section 271(1)(c) of the Income-tax Act, 1961. She submitted that penalty under Section 271(1)(c) of the Act was rightly deleted by the learned CIT(A) as the assessee has disclosed all information relating to the receipt of income from UK while filing the return of income itself and, upon receipt of refund from the tax withheld in UK, he filed a revised computation including the receipt of refund and interest thereon from UK. She submitted that the figures of returned income as well as assessed income are the same and the only change was in the figures of TDS. Therefore, no penalty under Section 271(1)(c) of the Act could be imposed on the assessee.

4. We have considered the rival submissions and have perused the order of the Assessing Officer and the learned CIT(A). We find that the assessee has disclosed all material facts relevant for his assessment at the time of filing of original return itself. Admittedly, the figures of returned income as well as assessed income in this case were the same. The assessee, upon receiving the refund from the tax withheld in UK, has filed a revised "computation" including the receipt of refund 3 ITA-5802/Del/2012

and interest thereon in his total income. The only change was in the figures of TDS and not in the income of the assessee. In these facts, we are of the view that no case of penalty could be made out by the Revenue and there was no mistake in the order of learned CIT(A) on this issue in holding that the assessee was not liable to penalty under Section 271(1)(c) and in deleting the penalty imposed on the assessee. Accordingly, the grounds of appeal of the Revenue are dismissed.

5. In the result, the appeal of the Revenue is dismissed.

Decision pronounced in the open Court on 6th May, 2015.

Sd/- Sd/- (INTURI RAMA RAO) RAO) (G.C. (G.C. GUPTA) GUPTA) ACCOUNTANT MEMBER VICE PRESIDENT

VK.

Copy forwarded to: -

1. Appellant : Assistant Commissioner of Income Tax, Circle Circle-

rcle-13(1), New Delhi.

2. Respondent : Dr. Prannoy Roy, B-207, Greater Kailash, Part-

Part-1, New Delhi - 110 048.

3. CIT

4. CIT(A)

5. DR, ITAT

Assistant Registrar