Tribunal allows cross-objection, dismisses disallowance & addition of income.

The Tribunal condoned the delay in filing the cross-objection, allowing it for adjudication. The disallowance under section 40(a)(i) for carrier payments was dismissed as the payment made to the non-resident carrier was not chargeable to tax in India. The addition of income accrued but not offered to tax was also rejected, following precedent that advances received for future services are not taxable in the year of receipt. Both the Revenue's appeal and the assessee's cross objection were dismissed, with the judgment pronounced on January 6, 2016, in Chennai.

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Issues:
1. Condonation of delay in filing cross-objection.
2. Disallowance under section 40(a)(i) for carrier payments.
3. Addition of income accrued but not offered to tax.

Condonation of Delay in Filing Cross-objection:
The Tribunal addressed a 19-day delay in filing the cross-objection, considering the reasons provided by the assessee regarding the unavailability of the authorized person to sign necessary documents. After reviewing the affidavit, the Tribunal found sufficient reasons for the delay and thus condoned it, allowing the cross-objection for adjudication.

Disallowance under Section 40(a)(i) for Carrier Payments:
The primary issue in the Revenue's appeal was the deletion of disallowance under section 40(a)(i) for carrier payments made to a company in South Africa without tax deduction at source. The Tribunal referred to a previous case involving the same assessee for the assessment year 2009-10, where a similar issue was discussed. The Tribunal upheld the findings of the Commissioner of Income Tax (Appeals) that the nature of services provided by the non-resident carrier did not constitute technical services, as it involved no technical knowledge and was merely the transmission of data. Citing relevant legal provisions and court decisions, the Tribunal concluded that the payment made to the non-resident carrier was not chargeable to tax in India, leading to the dismissal of the Revenue's appeal on this ground.

Addition of Income Accrued but Not Offered to Tax:
Another issue raised in the Revenue's appeal was the addition of income amounting to Rs. 1.02 crores by the Assessing Officer, representing income accrued but not offered to tax. The Tribunal referenced a previous case for the same assessee in the assessment year 2009-10, where it was established that income accrues only when services are provided, and advances received for future services are not taxable in the year of receipt. Following the precedent and the Commissioner of Income Tax (Appeals) decision, the Tribunal rejected the Revenue's appeal on this issue, confirming that the addition made by the Assessing Officer was unjustified.

In conclusion, both the appeal of the Revenue and the cross objection of the assessee were dismissed based on the detailed analysis and findings provided by the Tribunal. The judgment was pronounced on January 6, 2016, in Chennai.

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