IN INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH L , MUMBAI BEFORE SHRI MAHAVIR SINGH, JUDICIAL MEMBER AND SHRI MANOJ KUMAR AGGARWAL, ACCOUNTANT MEMBER ITA No 7555/MUM/2013 (Assessment Year: 2002-03) DDIT (IT) 3(1) Vs. Hoyer Global Transport BV R.No. 136, 1st Floor C/o Samsara Shipping P. Ltd. SC India House, N.M. Rd 101-102, Technopolis Knowledge Ballard Estate Park, Mahakali Caves RD Mumbai - 400038 Chakala Andheri (E) Mumbai- 400093 PAN No. AAACH9241F Cross Objection No. 43/Mum/2015 (In ITA No. 7555/Mum/2013) In Assessment Year: 2002-03 Hoyer Global Transport BV Vs. DDIT (IT) 3(1) C/o Samsara Shipping P. Ltd. R.No. 136, 1st Floor, SC India 101-102, Technopolis Knowledge House, N.M. Rd. Park, Mahakali Caves Rd. Ballard Estate Mumbai- 400093 Mumbai- 400038 & ITA No 7556 & 7557/MUM/2013 (Assessment Year: 2009-10 & 2010-11) DDIT (IT) 3(1) Vs. Hoyer Global Transport BV R.No. 136, 1st Floor C/o Samsara Shipping P. Ltd. SC India House, N.M. Rd 101-102, Technopolis Knowledge Ballard Estate Park, Mahakali Caves RD Mumbai - 400038 Chakala Andheri (E) Mumbai- 400093 Assessee by : Shri Girish Dave,AR Revenue by: Shri Jasbir Chouhan, Sr. DR Date of hearing: 23/08/2016 Date of pronouncement: 21/09/2016 2 ORDER PER MAHAVIR SINGH, J.M: Out of these three appeals by Revenue and Cross Objection by assessee, Revenue s appeal in ITA No.7555/Mum/2013 and assessee s C.O. No.43/Mum/2015 are arising out of order of CIT (A) -10, Mumbai in appeal No.CIT(A)-10/DDIT(IT)-3(1)/IT-436/11-12 order dated 27/08/2013. other two appeals of Revenue i.e. ITA No.7556Mum/2013 and 7557/Mum/2013 are arising out of order of CIT (A)-10, Mumbai in appeal No.CIT(A)-10/DDIT(IT)- 3(1)/IT-435/11-12 & IT-69/13-14 both dated 27-08-2013. Assessments were framed by DDIT (IT)-3(1), Mumbai under section 144C(3) r. w. s. 143(3) & 254 of Income Tax Act, 1961 (in short Act ) for assessment year 2002-03 vide his order dated 08/02/2012, for assessment year 2009-10 u/s 144C (3) r. w. s. 143(3) of Act dated 08/02/2012 and for assessment year 2010-11, u/s 144C (3) r. w. s. 143(3) of Act dated 24-05-2013. 2. only common issue in these appeals of Revenue is against order of CIT (A) is, whether Patvolk division of Forbes Gokak Ltd. is independent agent or not? For this Revenue has raised following ground no. 1: 1. On facts and in circumstances of case and in law, Ld. CIT(A) erred in holding that income of Rs. 169,08,335/- is not taxable without appreciating fact that M/s. Patvolk division of Forbes Gokak Ltd. is not independent agent . 3. Brief facts of case are that assessee is incorporated in Netherlands and is tax resident of that country. assessee is engaged in business of transportation of containerized cargo and it provides tank containers to consigners of cargo and also arranges for transportation from location of consigner to desired destination. assessee during these years was assisted in its commercial operations in India by Patvolk division of Forbes Gokak Ltd. assessee claimed that it was entitled to relief under Article 8A of India- Netherland DTAA. Assessee also made alternative claim that its income was not liable to tax in India as there is no PE in India. AO 3 while completing original assessment under section 143(3) of Act rejected claim of relief under Article 8A of DTAA and also held that there is permanent establishment for reason that Patvolk division of Forbes Gokak ltd. is dependent agent of assessee. CIT(A) as well as Tribunal in first round rejected claim of relief under Article 8A of DTAA but CIT(A) held that there is no liability to tax assessee as it did not have any PE in India for reason that Patvolk is independent agent and not dependent on assessee. Tribunal restored matter in respect to existence of agency PE to file of AO for fresh examination. In second round also AO has not accepted contention of assessee that it does not have PE in India, and he observed that assessee is operating in India through agent who is dependent on assessee and also who acts totally as per conditions lay down by its principal. According to AO, assessee is not entitled to act on its own. Therefore, he concluded that agent is not agent of independent status. Aggrieved, assessee preferred appeal before CIT(A), who after going through facts of case and Article 5(5) and 5(6) of India Netherlands DTAA held that assessee is not having any PE in India and Patvolk was agent of independent status. Accordingly, he held that assessee doesn t have any PE in India and deleted addition. Aggrieved, now Revenue is in second appeal before Tribunal. 4. Before us learned Counsel for assessee Shri. Girish Dave narrated facts that assessee is company incorporated in Netherlands and is engaged in business of transportation of containerized cargo. It arranges for transportation of cargo from location of consigner to desired destination and also provides tank containers to consigner for carrying out cargo. assessee is assisted in its commercial operations by Patvolk who is independent and unrelated Indian company and thereby it is agent of independent status. Ld. Counsel claimed that assessee being resident of Netherlands is entitled to beneficial provisions of DTAA i.e. Article 5(5) & 5(6). assessee, according to him rightly claimed that freight earning in India were not taxable under Article 7 of DTAA as there did not exist PE in India in term of Article 5 of DTAA. Ld. Counsel for assessee first of all took us through assessee s paper book consisting of pages 1-54 wherein copy of agency agreement with Patvolk division entered is enclosed at pages 19-21. Ld. 4 Counsel for assessee cited Article 2, 3, 4 & 5 of agreement dated 25/10/1999 which was effective from 01/11/1999. relevant clauses of agency agreement read as under: Agency Agreement Parties Between Hoyer-Odfjell BV Rotterdam, Oude Maasweg 44, Postbus 5025, 3197 X G Botlek RT hereinafter called Principal . And Patvolk,Divn. Of Forbes Gokak Ltd., 19, J.N. Heredia Marg. Ballard Estate, Mumbai 4000001 hereinafter called Agent . Taking in consideration That agent desires to represent Principal and Principal desires to be represented by agent under following terms and conditions. This agreement shall become effective on 1st of November 1999 and will prevail earlier agreement made between parties. This agreement shall continue until or unless terminated by either party giving other not less than three-months prior notice in writing to regular office address. Agents shall perform handling activities for Principal s ISO-tank containers in all respect. Have reached following agreement: Art 1. This agreement shall cover complete contract between parties. Modification to agreement can be made only in writing. Art2. agent commits himself during period of this agreement. a. To control and safe guard principal s tank containers and other assets in territory. b. To bill and collect all revenues including demurrage and to settle properly incurred disbursements and commissions arising from principal s business in territory: all costs are to be charged to principal at net costs. c. Agent is authorized, subject to prior written permission from Principal, to give guarantees in respect of any debts or other obligations or liabilities of Principal in favour of any officer or other authorities functioning under Income Tax Act, Customs Act, Major Port Trust Act or any other Central or State Acts in force in India and in fulfillment of such guarantees to pay dues payable to authorities out of Principal s funds lying with Agent. In case of any shortfall Principal will forthwith fully reimburse Agent through inward remittance through normal banking channels. agents shall follow specific instructions stated on nomination telex/fax and shall act on following basis guidelines. To liaise with Consignees / Shippers with regard to each container and to closely monitor whereabouts of each container. 5 To co-ordinate with Shipping Line agents for speedy clearance of container from port to Consignee s discharge point and to return container to Port yard or Shipper s loading point. Agents shall utilize services of Cleaning yards, Transport operators, Surveyors and other agencies with whom Principal may have contracts with. Agent shall complete and maintain proper expense records and accounts for each container. Any outstanding amounts due either party shall be settled promptly. agents will follow procedure as laid down in operating instruction for these shipments, which have already been surrendered and agreed. Take and react to any instruction that Principal may give to agents from time to time. d. To ensure that insurance coverage is in place for containers released to custody of consignee. Agent to sign Hoyer-Odfjell B/L on behalf of them for all shipments handled from Mumbai, Cochin, Kandla, Madras, Calcutta and JNPT. e. To provide all operational, documentary and logistical services needed to perform principal s business in territory. Art. principal commits that during prod of his agreement: a. To supply suitable containers for business agreed with and contracted by agent. b. To indemnify and keep indemnified Agent from and against any and all loss, damage or liability suffered by Agent in course of conducting business and resulting from. Any act, neglect or default of Principals or its Agents, employees, licenses or customers. Any successful claim by any third party alleging libel or slender in respect of any matter arising from conduct of business in Territory provided that such liability has not been incurred through any default by Agent in relation to its obligations under this Agreement. c. To provide appropriate guidance and training to manager appointed by Agents. Art 4. agent shall enjoy handling fee and commissions as specified in attached remuneration structure, page number 3, for business performed in Territory, payable upon submission of detailed commission statement. a. Principal pay Agent all actual operation costs / expenditure incurred on behalf of them. b. cost of communication (including Telegrams, Telexes, International telephone calls, faxes, e-mail etc.) relating to business covered by this agreement, shall be for account of Principal and specified as such. c. Manifests, Bills of Lading, shipping permits, delivery orders and all other forms ordered by agents on behalf of Principal will be reimbursed by Principal. Art 5 Arbitration: All disputes arising in connection with present agreement shall be finally settled under rules of conciliation and arbitration of international chamber of commerce, by arbitrators appointed in accordance 6 with said rules. place of arbitration shall be in Holland and arbitration shall be conduced in English language. Art 6 Notwithstanding anything contained in this Agreement, operational matters arising out of this agreement shall be subject to current / or future laws of India Agency Remuneration Per tank container (in U.S. Dollars) Exports to Europe (West of Suez) : usd $ 160.00 Indian Ocean, Middle East, S.E. Asia : usd $ 140.00 USA : usd $ 200.00 Imports from Europe : usd $ 135.00 Indian Ocean, Middle East, S.E. Asia : usd $ 105.00 Thus agreed, drawn up in duplicated and signed at For Hoyer-Odfjell BV Rotterdam For Forbes Gokak Limited (Patvolk Divn.) Sd/- Sd/- Frans Kooijmans T.R. Chandran Managing Director Regional Director Sd/- Sd/- Saved Foyn-Bruun V.R Patil Deputy Managing Director Dy. Manager 5. He argued that commercial agent Patvolk was independent entity and was neither related to assessee nor to its other group concerns. It was explained by learned Counsel that assessee does not have any ownership interest in Patvolk or any share holding or any beneficial interest. In view of agency agreement, he argued that, agency services rendered by Patvolk were in ordinary course of business of Patvolk and in agency agreement there were detailed instructions and comprehensive controls exercised by assessee that one would expect of any entity carrying on its own business. He explained that transaction between assessee and Patvolk were made at arm s length and there is no charge by Revenue that it is not so. He explained that Patvolk renders similar services to other foreign principals as well he referred to letter dated 25/02/05 wherein Patvolk has explained total revenue received is merely 1.14% of total commission from assessee. He referred to relevant Para 2 of letter which is reproduced hereunder: 7 2. We are acting as agents in India for number of principals. total amount of commission received from our above principals for above assessment year was Rs. 17,98,842/- while total commission earned by us was Rs. 157,394,556/-. It is evident therefrom that percentage of commission earned from our above principal is merely 1.14% of total commission. Thus we are agents of independent status and are acting in ordinary course of our shipping agency business. It is also evident that our activities are not devoted and cannot be said to be wholly or almost wholly devoted for above principals. In this view of matter, it is submitted that our principals cannot be said to have PE in India and therefore profits from operation of ships is not assessable to tax under Indian Income-tax Act. To conclude, (a) Our principals are entitled to benefits of Article 8A relating to profits from operation of ships and (b) Business profits earned by them in any event are not assessable to tax. Further, Ld. Counsel for assessee also explained that Patvolk itself admitted that it is acting as agent in India for number of foreign principals. 6. learned Counsel for assessee took us through DTAA Article 5(5) & 5(6) which reads as under:- 5. Notwithstanding provisions of paragraphs 1 and 2, where person- other than agent of independent status to whom paragraph 6 applies- is acting in one of States, on behalf of enterprise of other State, that enterprise shall be deemed to have permanent establishment in first mentioned State, if- (a) he has and habitually exercises in that state authority to conclude contracts on behalf of enterprise, unless his activities are limited to purchase of goods or merchandise for enterprise or (b) He has no such authority, but habitually maintains in first-mentioned State stock of goods or merchandise for which he regularly delivers goods or merchandise on behalf of enterprise: 6. enterprise of one of States shall not be deemed to have permanent establishment in other State merely because it carries on business in that other State through broker, general commission agent or any other agent of independent status, provided that such persons are acting in ordinary course of their business. However, when activities of such agent are devoted wholly or almost wholly on behalf of that enterprise, he will not be considered agent of independent status within meaning of this paragraph if it is shown that transaction between agent and enterprise were not made under arm s length conditions. 8 learned Counsel for assessee referred to decision of Hon ble Bombay High Court in case of DIT Vs. B4U International Holdings Ltd. [2015] 374 ITR 453 (Bom). 7. On other hand learned CIT (DR) Shri. Jasbir Chauhan argued that in view of agency agreement there are specific clauses wherein principal specifies so many do s and do not s to run business and only agent works for principal, he cannot be called as independent agent rather he is totally dependent on assessee and hence assessee has PE in term of dependent agent. learned CIT (DR) relied on order of Tribunal in case of ACIT vs. DHL operations B.V. (2005) 142 taxmann.com 1 (Mumbai-Trib). 8. In reply Shri. Dave made statement at Bar that operation of order of Tribunal cited by learned CIT(DR) of DHL operations B.V. dated 03/10/2000 has been stayed by Hon ble Bombay High Court but at moment he could not furnish order of Hon ble Bombay High Court. For this, learned CIT (DR) was allowed one day s time to verify whether order of Tribunal in DHL operations B.V. has been stayed or not? learned CIT (DR) could not answer on second day and accordingly statement made by learned Counsel for assessee at Bar is to be taken on face value. Even otherwise decision of DHL operations B.V. will not of much help to revenue for reason that now this issue is settled by Hon ble Bombay High Court in case of B4U International Holdings Ltd.(Supra). 9. We have heard rival contention and gone through facts and circumstances of case. We find from facts of case that Patvolk was independent entity and was neither related to assessee nor to its group and had no ownership interest in Patvolk. services that were rendered by Patvolk were in ordinary course of Patvolk s business. assessee, in agency agreement, had provided list of activities to be performed by Patvolk, but it lacked authority expected from entity carrying on its own business. transactions made between assessee and Patvolk were made under arm s length. It is evident from facts that Patvolk provided similar services to other foreign principals as well. total amount of commission that Patvolk received from assessee during year under appeal was 9 Rs. 17,98,842 which is mere 1.14% of total commission of Rs. 15.73 crores received by Patvolk during year from its other principles including assessee. assessee had engaged Patvolk based on its special skills and experience in rendering such agency services to other foreign principals. Article 5(5) of India Netherlands DTAA covers situations in which business being carried on through dependent agent results in creation of PE in source state. Article 5(6) of DTAA provides that PE cannot be deemed to exist just because business is carried on by agent of independent status. This article further provides that agent will not be regarded as dependent agent even when he is wholly or almost wholly acting on behalf of principal unless it is shown that his transactions with principal were not made under arm s length. Clause (a) of Article 5(5) of DTAA covers case of dependent agent who has and habitually exercises authority to conclude contracts on behalf of foreign enterprise only when agent s activities are not limited to purchase of goods or merchandise for enterprise. 10. Further, it is clear from facts of case that Patvolk required assessee s express approval for any business contract proposed by Patvolk. Thus, negotiation rights and decision making as regards acceptance of contracts and other key decisions rested fully with assessee. Hence, it cannot be said that Patvolk possessed authority to conclude contracts and make other key decisions on behalf of assessee. learned counsel for assessee has brought to our attention that Para 37 of OECD commentary on Article 5 of Model Tax Convention clarifies that agent would be agent of independent status not constituting PE if he satisfies following two conditions: - He is independent of principal, both legally and economically, and - He acts in ordinary course of his business when acting on behalf of enterprise. OECD commentary provides that dependence can be estimated by deciding if agent s commercial activities for principal were carried in accordance with detailed instructions and full control by principal. independence of agent is reflected from fact that principal has relied on special skills and knowledge 10 of agent. As mentioned above, assessee provided Patvolk with list of activities to be performed by it. These were just broad guidelines as any careful businessman would provide for protecting his own interests and lacked detailed instructions and authority expected from entity carrying out its own business. It is also true that assessee engaged Patvolk because of Patvolk s own skills and experience in rendering such services to other principals. learned counsel for assessee has argued that Patvolk was independent entity and acted in ordinary course of its agency business and that it also acted as agent on behalf of other principals and only 1.14% of its total income was earned from assessee. learned counsel has relied on Para 38.6 of OECD commentary on Article 5 in support of proposition that number of principals represented by agent is one of factors in determining whether agent is of independent status or not. 11. In support of this contention, learned Counsel has relied on case of Warner Bros. Distributing Inc. (28 taxmann.com 2), relevant paras of which have been reproduced hereunder:- As it can be seen in case above, Indian company was not dealing with assessee exclusively and rendered services to other principals also. Mumbai Tribunal has held Indian company to be acting independently and that it did not constitute agency PE in India . 12. We are of view that Patvolk was neither legally nor economically dependent on assessee. It was acting in ordinary course of its business, had not authority to take key decisions for assessee and commission it received from assessee was 1.14% of total commission it received from all its principals. Therefore, it was agent of independent status within meaning of Article 5(5) of DTAA. Article 5(6) of DTAA provides that when agent is wholly or almost wholly acting on behalf of principal, he will not be regarded as dependent agent unless it is proved that transactions between principal and agent were not based on arm s length conditions. To provide explanation to meaning of term wholly or almost wholly , learned counsel has relied on observation of Hon ble AAR in its ruling in case of Speciality Magazines P. Ltd (274 ITR 310, relevant Para of which has been reproduced as hereunder: 11 terms wholly or almost wholly are not technical terms or terms of art. They must receive their ordinary meaning as understood by English speaking people. word wholly means entirely, completely, fully, totally; almost wholly would mean very near to wholly, little less than whole... ... It is fact that during relevant year, Patvolk was rendering agency services to other foreign principals as well. It has been proved from page 35 of compilation of assessee paper book that Patvolk provides services to multiple principles. As it has been discussed earlier, Patvolk acted as agent for other principals as well and its earnings from assessee formed only mere 1.14% of Patvolk s total income. Thus, it cannot be disputed that Patvolk did not act wholly or almost wholly on behalf of appellant and was neither legally nor economically dependent on assessee, principal. Therefore, it is established that Patvolk was agent of independent status. Accordingly, we are of view that transactions between assessee and Patvolk were made at arm s length. This fact has not been disputed by DDIT. Therefore, under Article 5(6) of DTAA, Patvolk cannot constitute agency PE of dependent status of assessee in India. 13. This view of ours is supported by decision of Hon ble Bombay High Court in case of B4U International Holdings(Supra), wherein it is held as under:- 8. After hearing both sides and perusing with their assistance all appeal paper-books, we are inclined to agree with Mr. Mistri. Tribunal had before it order passed on 8th November, 2004 by Commissioner of Income Tax (Appeals). As far as that order is concerned, it is subject matter of Revenue's Income Tax Appeal No.1599 of 2013. There, Revenue raised ground that assessee was having dependent agent viz. B4U and that Commissioner erred in holding that it cannot be treated as such. Further, even if B4U is held to be dependent agent, it is being paid remuneration at arm's length. Therefore, further profits cannot be taxed in India. Insofar as these grounds are concerned, admitted facts are that assessee is foreign company incorporated in Mauritius. As noted, it had filed its residency certificate and pointed out that its business is of telecasting of TV channels such as B4U Music, MCM etc. During assessment year under consideration, its revenue from India consisted of collections from time slots given to advertisers from India. details filed by assessee revealed that there is general permission granted by Reserve Bank of India to act as advertisement collecting agents of assessee. permissions were granted to M/s. B4U Multimedia International Limited and M/s. B4U Broadband Limited. In computation of income filed along with return, assessee claimed that as it did not have permanent establishment in India, it is not 12 liable to tax in India under Article 7 of DTAA between India and Mauritius. argument further was that agents of assessee have marked ad- time slots of channels broadcasted by assessee for which they have received remuneration on arm's length basis. Thus, in light of Central Board of Direct Taxes Circular No.23 of 1969, income of assessee is not taxable in India. conditions of Circular 23 are fulfilled. Therefore, Explanation (a) to section 9(1)(i) of IT Act will have no application. 9. Assessing Officer did not accept contentions of assessee. He did not agree on both counts but Tribunal noted that DTAA and particularly paragraph 5 of Article 5 indicates that enterprise of contracting State shall not be deemed to have permanent establishment in other contracting State merely because it carries on business in that State through broker, general commission agent, or any other agent of independent status, where such persons are acting in ordinary course of their business. However, when activities of such agent are devoted exclusively or almost exclusively on behalf of that enterprise, he will not be considered agent of independent status within meaning of this paragraph. Tribunal noted findings of Assessing Officer and found that Commissioner held that assessee carries out entire activities from Mauritius and all contracts were concluded in Mauritius. only activity which is carried out in India is incidental or auxiliary / preparatory in nature which is carried out in routine manner as per direction of principal without application of mind and hence B4U is not dependent agent. Nearly 4.69% of total income of B4U India is commission / service income received from assessee company and, therefore, also it cannot be termed as dependent agent. As far as alternate contentions are concerned, First Appellate Authority held that assessee and B4U India were dealing with each other on arm's length basis. 15% fee is supported by Circular No.742. Thus it was held that no further profits should be taxed in hands of assessee. 10. This conclusion of Commissioner has been upheld by Tribunal. It noted rival contentions and in great details. Tribunal concluded that after referring to clauses in agreement between assessee and B4U that B4U India is not decision maker nor it has authority to conclude contracts (see paragraph 29). Further, Revenue has not brought anything on record to prove that agent has such powers and from agreement any such conclusion could not have been drawn. Barring this agreement, there is no material or evidence with Assessing Officer to disprove claim of assessee that agent has no power to conclude contract. This finding is rendered on complete reading of agreement. Thereafter Indo-Mauritius DTAA has been referred to and particularly paragraphs 5.4 and 5.5. and Tribunal concludes that requirement that first enterprise in first mentioned State has and habitually exercised in that State authority to conclude contracts in name of enterprise unless his activities are limited to purchase of goods or merchandise for enterprise is condition which is not satisfied. Therefore, this is not case of B4U India being agent with independent status. This finding is rendered in paragraph 29 and 30 of order under challenge. We do not find that 13 Tribunal's order and which also refers to Hon'ble Supreme Court decision in Morgan Stanley & Co. (supra) can raise any substantial questions of law. 14. Therefore, under Article 5(6) of DTAA, Patvolk cannot constitute agency PE of dependent status of assessee in India; rather Patvolk is independent agent of assessee in India. We uphold orders of CIT (A) and these appeals of Revenue are dismissed. 15. next common issue of Revenue and Cross Objection of assessee as regards to charging of interest u/s 234B of Act. relevant ground raised by assessee in its cross objection is as under:- 1. Levy of interest under section 234B: learned CIT (A) erred in not adjudication on applicability of interest under section 234B of Income Tax Act, 1961 ( Act ). respondent submits that provisions of section 234B are not attracted in case of non-resident assessee whose income is subject to withholding tax provisions in light of decision of Hon ble Mumbai Tribunal vide order dated 31 May 2013 in respondent s own case for assessment year 2008-09. 16. At outset, learned Counsel for assessee submitted that this issue is covered in favour of assessee by decision of Hon ble Bombay High Court in case of DDIT (IT) Vs NGC Network Asia LLC (2009) 313 ITR 187, wherein it is held that interest u/s 234B of Act will not apply to non-resident assessee by observing as under:- 5. Under provisions of present Act, issue had come for consideration in case of CIT & Anr. vs. Sedco Forex International Drilling Co. Ltd. & Ors. (2004) 186 CTR (Uttaranchal) 144: (2003) 264 ITR 320 (Uttaranchal). One of questions was, as to whether interest could be levied on assessee under s. 234B of Act in respect of tax which was not liable to be deducted at source. learned Bench of Uttaranchal High Court, after considering provisions, held as under: "Secondly, although s. 191 of Act is not overridden by ss. 192, 208 and 209(1)(a)/(d) of Act, scheme of ss. 208 and 209 of Act indicates that in order to compute advance tax assessee has to, inter alia, estimate his current income and calculate tax on such income by applying rates in force. That under s. 209(1)(d) income-tax calculated is to be reduced by amount of tax which would be deductible at source or collectible at source, which in this case has not been done by employer company according to law prevailing for which assessee cannot be faulted." 14 Relying on judgment in Sedco Forex International Drilling Co. Ltd. (supra), learned Bench of this Court was pleased to pass order dt. 16th July, 2008 in IT Appeal (L) No. 1796 of 2007 in case of Director of IT (International Taxation) vs. Morgan Guarantee International Finance Corporation, by applying ratio of that judgment. Our attention is also invited to judgment of Madras High Court in case of CIT vs. Madras Fertilisers Ltd. (1984) 149 ITR 703 (Mad), where Madras High Court took view that amount of tax deductible at source is to be taken into consideration to determine liability to pay interest under s. 215. In that case, assessee had not paid advance tax on interest income. payer of interest had not deducted tax. learned Bench of Madras High Court was of view that levy of interest under s. 215 on assessee was not justified. We are in respectful agreement with view taken in case of CIT & Anr. vs. Sedco Forex International Drilling Co. Ltd. (supra), by Uttaranchal High Court. We are in respectful agreement with view taken in case of CIT & Anr. vs. Sedco Forex International Drilling Co. Ltd. (supra), by Uttaranchal High Court. We are clearly of opinion that when duty is cast on payer to pay tax at source, on failure, no interest can be imposed on payee assessee. Considering submissions of both parties and provisions of law, consequently appeal is dismissed . Respectfully following same, we decide this issue in favour of assessee and against Revenue. Consequently, this issue of assessee s cross objection is allowed and that of Revenue s appeal is dismissed. 17. In result, all appeals of Revenue are dismissed and Cross Objection of assessee is allowed. Order pronounced in open court on 21/09/ 2016. Sd/- Sd/- (MANOJ KUMAR AGGARWAL) (MAHAVIR SINGH) ACCOUNTANT MEMBER JUDICIAL MEMBER Mumbai, Dated 21/09/2016 AG (On Tour)/LK Deka 15 Copy of Order forwarded to: 1. Appellant , 2. Respondent. 3. CIT(A)- 4. CIT 5. DR, ITAT, Mumbai 6. Guard file. BY ORDER, //True Copy// (Dy./Asstt. Registrar) ITAT, Mumbai Details Date Initials Designation 1 Draft dictated on Computer Sr.PS/PS 2 Draft Placed before author 19/09/2016/ Sr.PS/PS 20/09/2016 3 Draft proposed & placed before JM/AM Second Member 4 Draft discussed/approved by Second JM/AM Member 5. Approved Draft comes to Sr.PS/PS Sr.PS/PS 6. Kept for pronouncement on Sr.PS/PS 7. File sent to Bench Clerk Sr.PS/PS 8 Date on which file goes to Head clerk 9 Date of Dispatch of order DDIT (IT)-3(1), Mumbai v. Hoyer Global Transport BV