Director of Income Tax (International Taxation) Vs Dun and Bradstreet Information Services India Pvt. Ltd. (Bombay High Court)
The Bombay High Court examined whether the ITAT was justified in cancelling an order passed under Sections 195 and 201 of the Income-tax Act, 1961. The case involved remittances made by the assessee for importing Business Information Reports from Dun & Bradstreet, USA without deducting tax at source. The Assessing Officer held that tax deduction at source was required and passed an order under Sections 195 read with 201, which was upheld by the CIT(A).
Read SC Judgment in this case: TDS not applicable on payments for imported Business Information Reports: SC
On further appeal, the ITAT set aside the order by relying on its earlier decision in the assessee’s own case and rulings of the Authority for Advance Rulings (AAR) in similar cases involving Dun & Bradstreet entities in Spain, Europe, and the UK. These rulings had held that such transactions did not attract the provisions of Section 195.
The High Court noted that although AAR decisions are not binding, they pertained to identical transactions and no error was found in them. Therefore, the Court upheld the ITAT’s decision and dismissed the appeal, holding that no interference was warranted.
FULL TEXT OF THE JUDGMENT/ORDER OF BOMBAY HIGH COURT
1. Whether the ITATA was justified in cancelling the order passed under Section 195 r/w. section 201 of the Income Tax Act, 1961, is the question raised in this appeal.
2. The assessee had imported Business Information Reports from Dun & Bradstreet, USA and made remittances in respect thereof without deducting tax at source. The assessing officer held that the assessee was liable to deduct tax at source and accordingly passed an order under Section 195 read with Section 201 of the Act. Appeal filed by the assessee was dismissed by CIT(A). On further appeal, the ITAT set aside the order passed under Section 195 read with Section 201 of the Act by following its decision in the assessee’s own case for AY 2002-03 in ITA No.1773/Mum/2006 and the decision of the AAR on identical facts in the case of D & B Espana, Spain AAR No.615 of 2003 (272 ITR 99), D & B Europe AAR No.657 of 2005 dated 27/10/2005 and D & B UK AAR No.656 of 2005 dated 27/10/2005. In all these cases the AAR held that the sale of very same Business Information Reports by the subsidiaries of Dun & Bradstreet US in Spain, Europe and U.K. to the assessee did not attract the provisions of Section 195 of the Act. Though the decision of the AAR is not binding in the present case, since the decision of AAR relates to the very same Business Information Reports imported by the petitioner and no fault in the decision of the AAR is pointed out, we see no reason to interfere with the decision of the ITAT. Accordingly, the appeal is dismissed with no order as to costs.
