Linklaters , vs Assessee

Linklaters & Paines (Now बनाम/ Director of Income Linklaters), Vs. Tax (Intl.tax) 4(1), C/o C C Chokshi and Co., Plot Mumbai No.12, Dr.Annie Besant Road, Opp. Shivsagar Estate, Worli, Mumbai-400018 (अपीलाथ /Applicant) .. ( यथ / Respondent)

थायी ले ख ा सं . /जीआइआर सं . /PAN/G IRNo.: 39-044-CX-1480

अपीलाथ ओर से / Appellant by : Shri S E Dastur and Shri Niraj Sheth यथ क% ओर से/Respondent by : Shri Neena Singh Pandey

सन ु वाई क% तार)ख / Date of Hearing : 2.1.2015 घोषणा क% तार)ख /Date of Pronouncement : 20..2.2015

आदे श / O R D E R

Per B.R.BASKARAN, Accountant Member:

The assessee has moved this miscellaneous application seeking rectification of the order dated 08-08-2014 passed in the hands of the assessee in ITA No. 1711/Mum/2004 in respect of the appeal filed by the revenue for assessment year 1997-98.

2. The Ld Counsel appearing for the assessee submitted that the AO had taken the view that even where only a part of the services were performed in India, the entire income was taxable in India. However, the Ld CIT(A) held that that only the income in respect of services rendered in India is attributable to the Permanent Establishment and that portion alone 2 MA No. 392/Mum/2014

is taxable in India. Against the said decision of Ld CIT(A), the revenue preferred the above said appeal before the Tribunal. The Ld Counsel said that the identical issue was considered by the co-ordinate bench of Tribunal in the assessee's own case in AY 1995-96 and it was decided against the assessee. This fact was brought to the notice of the bench at the time of hearing. Subsequent to the date of the order passed by the Tribunal in the assessee's case for AY 1995-96, the Special bench of the Tribunal also considered an identical issue in the case of ADIT Vs. Clifford Chance (143 ITD 1) and it was decided in favour of the assessee. The Ld Counsel submitted that the decision of Special bench was specifically pointed out to the Bench both at the time of arguments and also in the notes given to the bench. However, while passing the order, the Tribunal has followed the decision rendered in AY 1995-96 in paragraph 6 of its order and did not consider the decision of the Special Bench referred above. He further submitted that the bench heard the appeal filed by the revenue for 1996-97 against the order passed by Ld CIT(A) u/s 154 of the Act and in the order passed in respect of the same, the Tribunal has referred to the decision of the Special Bench. Accordingly he submitted that a mistake apparent from the record has occurred in the impugned of the order of the Tribunal in not following the binding decision of the Special Bench, referred above.

3. We have heard Ld D.R and also perused the record. Admittedly, the Ld A.R had placed reliance on the decision rendered by the Special bench in the case of Clifford Chance (supra) at the time of hearing. There should not be any dispute that the decision rendered by the Special bench should be preferred over to the decision of the Division bench. Hence, the impugned order of the Tribunal suffers from the mistake apparent from record in not following the decision of Special bench and hence the same requires to be corrected. The issue regarding the quantum of income attributable to Permanent Establishment is discussed in paragraph 12 of 3 MA No. 392/Mum/2014

the order. In view of the discussions made supra, we order the existing paragraph 12 of the order of the Tribunal dated 8.8.2004 passed in ITA No.1711/Mum/2004 relating to AY 1997-98 shall be deleted and in that place following paragraph shall be inserted.

"12. We shall now take up the appeal filed by the revenue. The grounds numbered as 1 & 4 relate to the assessment or Professional receipts. Though the assessing officer has assessed the entire professional receipts as the income of the assessee, we notice that the Ld CIT(A) has held that, only that portion of the income relating to the services performed in India alone is assessable under the Act. Both the parties admitted that the Tribunal has considered identical issue in AY 1995-96 and has held that the entire profits directly or indirectly attributable to the Permanent Establishment is assessable and accordingly upheld the order of the assessing officer in that year. However, the Ld A.R submitted that the Special bench of Tribunal has considered an identical issue in the case of CIT Vs. Clifford Chance (143 ITD 1), wherein the issue has been decided in favour of the assessee. Accordingly he submitted that the order of the Ld CIT(A) on this issue should be upheld. We agree with the contentions of Ld A.R. Since the decision of Special bench is binding on us, we direct the assessing officer to assess the income in accordance with the decision rendered by the Special Bench in the above cited case. Accordingly, we reject the ground urged by the revenue on this issue"

4. In the result, the miscellaneous application filed by the assessee is allowed.

The above order was pronounced in the open court on 20th Feb, 2015.

घोषणा खल ु े यायालय म, -दनांकः 20th Feb, 2015 को क% गई ।

sd sd

( ववेक वमा /VIVEK VARMA) (बी.आर. बा करन,/ B.R. BASKARAN) या यक सद य/Judicial Member लेखा सद य/ Accountant Member

मब ुं ई Mumbai:20th Feb,2014.

व. न.स./ SRL , Sr. PS 4 MA No. 392/Mum/2014

आदे श क !"त$ल%प अ&े%षत/Copy of the Order forwarded to :

1. अपीलाथ / The Appellant

2. यथ / The Respondent.

3. आयकर आय?

ु त(अपील) / The CIT(A)- concerned

4. आयकर आय?

ु त / CIT concerned

5. वभागीय त नAध, आयकर अपील)य अAधकरण, मब ुं ई / DR, ITAT, Mumbai concerned

6. गाड फाईल / Guard file.

आदे शानस ु ार/ BY ORDER, true copy सहायक पंजीकार (Asstt. Registrar) आयकर अपील)य अAधकरण, मंब ु ई /ITAT, Mumbai