Text Hundred India Pvt. Ld. v. CIT
In the Income Tax Appellate Tribunal
ITA No. 2095 to 2098/Del/2014 and ITA No. 2849 to 2851 & 2852/Del/2014
Before Mr H.S. Sidhu, J.M. and Mr Prashant Maharishi, A.M.
Decided on July 31, 2017

Relevancy of the case: Admissibility of electronic record.

Statutes & Provisions Involved

• The Information Technology Act, 2000 (Section 4)
• The Income Tax Act, 1961 (Section 143, 264)
• The Indian Evidence Act, 1872 (Section 65B)

Relevant Facts of the Case

• The assessee is a wholly-owned subsidiary of a UK company, viz. M/s. Text Hundred International Ltd. The assessee is engaged in the business of public relations service. Consequently, the associated enterprise entered into a management services agreement with the assessee company.
• However, before the assessing officer, the assessee placed some documentary evidence on record in the form of emails.  These emails are between the assessee’s employees and the associated enterprises’s employees regarding certain advice given in the management service.
• However, the assessing officer rejected the tax claims of the assessee regarding the nature of services rendered by the associated company. Subsequently, he alleged that the assessee diverted its income to its foreign-associated enterprise to grab payment for the management service rendered in India.

Opinion of the Bench

• The bench perused through a tabulation containing the details and the nature of the service rendered, the date of rendering of services and the corresponding details of the emails placed in the paper book was sent to the assessing officer for his specific comments.
• Consequently, it observed that despite being afforded the specific opportunity during the appellate proceedings, the assessing officer in the remand report did not controvert any of the evidence placed on record.
• Moreover, the assessing officer was unable to dispute the actual rendering of services by the associated enterprise to the assessee.
• Furthermore, the bench noted the specificity of the annexure. The annexure clearly contains details of the persons exchanging the relevant emails. Furthermore, the annexures clearly displayed the nature of the advice and the category of service received.
• The bench invoked the requirements of Section 65B of the Indian Evidence Act, 1872, and Section 4 of the Information Technology Act, 2000. It concluded that the assessee placed sufficient, unrebutted, and uncontroverted documentary evidence in support of the actual rendering of service by the associated enterprise to the assessee.
• Therefore, the bench found no basis for the assessing officer’s claim.

Final Decision

• The bench, thus allowed the assessee’s appeal and dismissed the previous revenue appeal by the assessing officer.

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