Ravva Oil (Singapore) Pvt. Ltd, v. ADIT Circle 2 (1) International Taxation,

ITA 316/DEL/2008 | 2002-2003
Pronouncement Date: 06-08-2010 | Result: Partly Allowed

Appeal Details

RSA Number 31620114 RSA 2008
Bench Delhi
Appeal Number ITA 316/DEL/2008
Duration Of Justice 2 year(s) 6 month(s) 4 day(s)
Appellant Ravva Oil (Singapore) Pvt. Ltd,
Respondent ADIT Circle 2 (1) International Taxation,
Appeal Type Income Tax Appeal
Pronouncement Date 06-08-2010
Appeal Filed By Assessee
Order Result Partly Allowed
Bench Allotted F
Tribunal Order Date 06-08-2010
Date Of Final Hearing 28-07-2010
Next Hearing Date 28-07-2010
Assessment Year 2002-2003
Appeal Filed On 01-02-2008
Judgment Text
I.T.A. NO.314 TO 316 & 2843 /DEL/08 1/5 IN THE INCOME TAX APPELLATE TRIBUNAL (DELHI BENCH F NEW DELHI) BEFORE SHRI C.L. SETHI JUDICIAL MEMBER AND SHRI A.K. GARODIA ACCOUNTANT MEMBER I.T.A. NO.314 315 316 & 2843 /DEL/2008 ASSESSMENT YEAR : 2001-02 02-03 03-04 & 04-05 RAVVA OIL (SINGAPORE) PVT. ACIT LTD. C/O MARUBENI INDIA PVT. CIRCLE-2(1) LTD. 5 TH FLOOR BERAJAYA HOUSE INTERNATIONAL TAXATION NEW FRIENDS COLONY N.DELHI. V. NEW DELHI. (APPELLANT) (RESPONDENT) PAN /GIR/NO.AAACR-1530-M APPELLANT BY : DR.ANITA SUMANATH RESPONDENT BY : SHRI ASHWANI KUMAR MAHAJAN CIT-DR ORDER PER A.K. GARODIA AM: ALL THESE FOUR APPEALS ARE FILED BY THE ASSESSEE FO R ASSESSMENT YEARS 2001-02 TO 2004-05. THESE APPEALS ARE DIRECTED AG AINST ONE COMMON ORDER OF LD CIT(A) XXIV NEW DELHI DATED 28.9.2007 OF ASSES SMENT YEAR 2001-02 2002-03 03-04 AND ALSO AGAINST ORDER DATED 16.6.20 08 FOR ASSESSMENT YEAR 2004-05. 2. SINCE ONE COMMON ISSUE IS INVOLVED IN ALL THESE APPEALS ALL THESE APPEALS WERE HEARD TOGETHER AND ARE BEING DISPOSED OFF BY THIS COMMON ORDER FOR THE SAKE OF CONVENIENCE. 3. ONE OF THE COMMON GROUND IN ALL THESE FOUR YEARS IS REGARDING DISALLOWANCE OF REMUNERATION PAID TO A NON RESIDENT DIRECTOR U/S 40(A)(I) OF THE INCOME TAX ACT 1961 ON THE ALLEGED GROUND THAT NO TDS WAS DEDUCTED BY THE . I.T.A. NO.314 TO 316 & 2843/DEL/08 2/5 ASSESSEE. THE CASE OF THE ASSESSEE IS THAT NO TDS IS DEDUCTIBLE FROM SUCH REMUNERATION BECAUSE SUCH REMUNERATION IS NOT TAXAB LE IN INDIA. 4. IN CONNECTION WITH THIS GROUND OF THE ASSESSEE I N ALL THE FOUR YEARS LD COUNSEL OF THE ASSESSEE HAS SUBMITTED SOME ADDITION AL EVIDENCES AND MADE A REQUEST FOR ADMISSION OF ADDITIONAL EVIDENCES UNDER RULE 29 OF THE ITAT RULES 1962. IN THIS APPLICATION FOR ADMISSION OF ADDITION AL EVIDENCE IT HAS BEEN SUBMITTED BY THE ASSESSEE THAT THE CASE OF THE ASSE SSEE IS THAT THE REMUNERATION PAID TO GENERAL MANAGER IS NOT TAXABLE IN INDIA FOR THE REASON THAT THE SAME HAS BEEN PAID IN RESPECT OF SERVICES RENDERED BY THE GE NERAL MANAGER OUTSIDE INDIA. IT IS ALSO SUBMITTED THAT THIS CONTENTION HAS BEEN ACCEPTED BY THE TRIBUNAL IN RESPECT OF ASSESSMENT YEAR 1996-97 ONWARDS TILL ASS ESSMENT YEAR 2000-01. IN THE COURSE OF HEARING OF LD DR OF THE REVENUE SOUGH T TO DISTINGUISH THIS TRIBUNAL ORDER BY THESE APPEALS POINTING OUT THAT IN THIS T RIBUNAL ORDER THE DECISION IS BASED ON THIS ASPECT THAT THE ASSESSEE WAS A NON RE SIDENT IN THE RELEVANT YEAR FOR THE REASON THAT HIS STAY WAS LESS THAN 182 DAYS IN INDIA DURING THOSE YEARS BUT THIS FACT WAS NOT CONSIDERED AND EXAMINED AS TO WHETHER THE SERVICES RENDERED BY HIM WERE RENDERED IN INDIA OR NOT. IT W AS ALSO NOTICED THAT THE NECESSARY FACTS RELATING TO THIS ASPECT HAVE NOT BE EN BROUGHT ON RECORD EITHER BY THE ASSESSING OFFICER OR BY THE LD CIT(A) AND FOR T HIS REASON THE ASSESSEE HAS SUBMITTED THESE ADDITIONAL EVIDENCES ON THIS ASPECT OF THE MATTER. IT WAS A SUBMISSION OF THE LD AR OF THE ASSESSEE IN THE COUR SE OF ARGUMENT BEFORE US THAT THESE ADDITIONAL EVIDENCES SHOULD BE ADMITTED AND IF REQUIRED THE MATTER MAY BE RESTORED BACK TO THE FILE OF THE ASSESSING O FFICER FOR A FRESH DECISION. IT IS ALSO SUBMITTED THAT IN THAT SITUATION THE ASSESSEE SHOULD BE AT LIBERTY TO PLACE BEFORE THE ASSESSING OFFICER ALL NECESSARY EVIDENCE S INCLUDING THESE EVIDENCES. LD DR OF THE REVENUE DID NOT OBJECT TO ADMISSION OF THESE EVIDENCES BUT IT WAS HIS REQUEST THAT THE MATTER SHOULD BE RESTORED BACK TO THE FILE OF THE ASSESSING OFFICER FOR A FRESH DECISION AND THE ASSESSING OFFI CER SHOULD BE AT LIBERTY TO DECIDE THE ISSUE AFTER CONSIDERING ALL THE EVIDENCE S WITH THE ASSESSEE FURNISHES BEFORE HIM AND THE ASSESSING OFFICER SHOULD BE AT L IBERTY TO MAKE ENQUIRY AS HE FEELS REQUIRED. WE ALSO FIND THAT IN ORDER TO DECID E THIS ISSUE WHICH IS BEFORE US . I.T.A. NO.314 TO 316 & 2843/DEL/08 3/5 THIS ASPECT IS VERY MUCH ESSENTIAL TO EXAMINE AS TO WHETHER SERVICES RENDERED IN INDIA BY THE GENERAL MANAGER BECAUSE AS PER SECTION 9(1)(II) WHAT IS TO BE SEEN IS AS TO WHETHER THE SALARY INCOME IS EARNED IN IND IA OR NOT. THE TRIBUNAL ORDER IN ASSESSEES OWN CASE IN ASSESSMENT YEAR 1996-97 AND 1997-98 IS AVAILABLE ON PAGES 5-11 OF THE PAPER BOOK. IN THIS TRIBUNAL DECI SION THIS ASPECT OF THE MATTER WAS NOT DECIDED BY THE TRIBUNAL AS TO WHETHER THE S ALARY INCOME OF THE GENERAL MANAGER WAS EARNED IN INDIA OR NOT AS REQUIRED IN S ECTION 9(1)(II) OF THE ACT. MOREOVER THERE IS INSERTION OF EXPLANATION IN THIS SECTION W.E.F. 1.4.2000 AND HENCE FOR THIS REASON ALSO THE EARLIER TRIBUNAL DE CISION IS NOT APPLICABLE AND THE MATTER HAS TO BE EXAMINED IN THE LIGHT OF THIS EXPL ANATION INSERTED IN SECTION (1)((II) W.E.F. 1.4.2000. HENCE THESE TRIBUNAL OR DERS CANNOT BE FOLLOWED IN THE PRESENT YEARS. LD COUNSEL OF THE ASSESSEE FAIRLY AG REED FOR THIS. IN THE REMAINING YEARS ALSO THIS TRIBUNAL ORDER WAS FOLLOWED AND TH IS ISSUE WAS NEVER DECIDED AS TO WHETHER THE SALARY INCOME OF THE GENERAL MANAGER WAS EARNED IN INDIA OR NOT. IN THE PRESENT YEARS WHICH ARE BEFORE US THE AUTHO RITIES BELOW HAVE NOT EXAMINED THIS ASPECT AND UNDER THESE FACTS AND CIRC UMSTANCES WE ARE OF THE CONSIDERED OPINION THAT IN ORDER TO DECIDE THE ISSU E IN DISPUTE BEFORE US IT IS NECESSARY TO ADMIT THE ADDITIONAL EVIDENCES SUBMITT ED BY THE LD COUNSEL OF THE ASSESSEE AND THEREAFTER THE MATTER HAS TO BE RESTO RED BACK TO THE FILE OF THE ASSESSING OFFICER FOR A FRESH DECISION. ACCORDINGLY WE ADMIT THE ADDITIONAL EVIDENCES FURNISHED BY THE LD COUNSEL OF THE ASSESS EE AND THEREAFTER THIS ISSUE IS RESTORED BACK TO THE FILE OF THE ASSESSING OFFIC ER IN ALL THE FOUR YEARS. WE THEREFORE SET ASIDE THE ORDER OF THE LD CIT(A) ON THIS ISSUE IN ALL THE FOUR YEARS AND RESTORE THIS MATTER BACK TO THE FILE OF THE ASS ESSING OFFICER FOR A DE NOVO DECISION ON THIS ISSUE. THE ASSESSEE IS FREE TO FU RNISH ALL THESE EVIDENCES OR ANY OTHER EVIDENCE WHICH IT CONSIDER NECESSARY TO REPRE SENT ITS CASE BEFORE THE ASSESSING OFFICER AND THE ASSESSING OFFICER IS AT L IBERTY TO MAKE ANY ENQUIRY WHICH HE DEEMS FIT AND PROPER. THEREAFTER THE ASSE SSING OFFICER SHOULD PASS NECESSARY ORDER AS PER LAW IN ALL THE FOUR YEARS ON THIS ISSUE AFTER PROVIDING ADEQUATE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE . THE GROUND ON THIS ISSUE IS ALLOWED FOR STATISTICAL PURPOSES IN ALL FOUR YEARS. . . I.T.A. NO.314 TO 316 & 2843/DEL/08 4/5 5. REGARDING OTHER ISSUES IN ALL THESE APPEALS IT WAS SUBMITTED BY THE LD COUNSEL OF THE ASSESSEE THAT GROUND NO.1 IN ASSESSM ENT YEAR 2004-05 IS NOT PRESSED. AS PER THIS GROUND THE DISPUTE WAS REGARD ING REJECTION OF THE CLAIM OF THE ASSESSEE FOR DEDUCTION U/S 80IB OF THE ACT AS P ER THE PROVISIONS OF SUB SECTION (9) OF SECTION 80IB. THIS GROUND OF THE AS SESSEE IN ASSESSMENT YEAR 2004-05 IS REJECTED AS NOT PRESSED. IT IS ALSO SUBM ITTED BY THE LD COUNSEL OF THE ASSESSEE THAT SIMILAR ISSUE WAS RAISED BY THE ASSES SEE BY WAY OF ADDITIONAL GROUND IN ASSESSMENT YEAR 2002-03 AND 2003-04 AND T HESE ADDITIONAL GROUNDS ARE ALSO NOT PRESSED AND HENCE THESE ADDITIONAL GRO UNDS IN ASSESSMENT YEAR 2002-03 & 2003-04 ARE ALSO REJECTED AS NOT PRESSED. 6. IT IS ALSO SUBMITTED BY THE LD AR OF THE ASSESSE E THAT THERE IS ONE MORE ISSUE INVOLVED IN THESE FOUR APPEALS I.E. REGARDING DISALLOWANCE U/S 40(A) WITH REGARD TO PAYMENT OF CONSULTANCY FEES PAID TO FOSTE R PTY LTD. OF AUSTRALIA AND PAYMENT OF SERVICE FEES PAID TO MARUBENI AUSTRALIA LTD. AND PAYMENT OF ADMINISTRATIVE FEES TO MARUBENI INTERNATIONAL PETRO LEUM (SINGAPORE) PTY LTD. WHICH WERE DISALLOWED BY AUTHORITIES BELOW ON THE B ASIS THAT THESE PAYMENTS ARE WITHIN THE AMBIT OF TERM ROYALTY. IT IS SUBMITTED T HAT THIS ISSUE REGARDING THESE PAYMENTS MAY ALSO BE RESTORED BACK TO THE FILE OF T HE ASSESSING OFFICER FOR A FRESH DECISION BECAUSE PROPER OPPORTUNITY WAS NOT A LLOWED TO THE ASSESSEE. LD DR OF THE REVENUE ALSO AGREED WITH THIS PROPOSITION AND HENCE IN ALL THESE FOUR YEARS ON THIS ISSUE ALSO THE ORDER OF LD CIT(A) I S SET ASIDE AND THE MATTER IS RESTORED BACK TO THE FILE OF THE ASSESSING OFFICER FOR A FRESH DECISION. THE ASSESSEE SHOULD ALSO FURNISH ALL THE EVIDENCES BEFO RE THE ASSESSING OFFICER IN SUPPORT OF ITS CONTENTION THAT TDS IS NOT DEDUCTIBL E AGAINST THESE PAYMENTS AND THE ASSESSING OFFICER SHOULD PASS NECESSARY ORDER A S PER LAW AFTER PROVIDING ADEQUATE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE . WE WOULD LIKE TO MAKE IT CLEAR THAT WE ARE NOT EXPRESSING OUR OPINION ON THI S ASPECT AND THE ASSESSING OFFICER IS ALSO FREE TO MAKE ANY ENQUIRY IN THIS RE GARD WHICH HE FEELS FIT AND PROPER AND THEREAFTER HE SHOULD PASS NECESSARY ORDE R AS PER LAW AFTER ALLOWING ADEQUATE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE . . I.T.A. NO.314 TO 316 & 2843/DEL/08 5/5 7. IN THE RESULT THE APPEAL OF THE ASSESSEE FOR AS SESSMENT YEAR 2001-02 IS ALLOWED FOR STATISTICAL PURPOSES WHEREAS REMAINING THREE APPEALS OF THE ASSESSEE ARE PARTLY ALLOWED FOR STATISTICAL PURPOSES. 8. ORDER PRONOUNCED IN THE OPEN COURT ON 6TH AUGU ST 2010. SD/- SD/- (C.L. SETHI) (A.K. G ARODIA) JUDICIAL MEMBER ACCOUNTANT MEMBER DT. 6.8.2010. HMS COPY FORWARDED TO:- 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT 4. THE CIT (A)- NEW DELHI. 5. THE DR ITAT LOKNAYAK BHAWAN KHAN MARKET NEW DELHI. TRUE COPY. BY ORDER (ITAT NEW DELHI).