M/s Invest Exports Gnbtt rep by RINL, Visakhapatnam v. The ACIT, Special Range-1, Visakhapatnam

ITA 371/VIZ/2002 | 1998-1999
Pronouncement Date: 13-05-2010 | Result: Allowed

Appeal Details

RSA Number 37125314 RSA 2002
Bench Visakhapatnam
Appeal Number ITA 371/VIZ/2002
Duration Of Justice 7 year(s) 11 month(s) 21 day(s)
Appellant M/s Invest Exports Gnbtt rep by RINL, Visakhapatnam
Respondent The ACIT, Special Range-1, Visakhapatnam
Appeal Type Income Tax Appeal
Pronouncement Date 13-05-2010
Appeal Filed By Assessee
Order Result Allowed
Bench Allotted DB
Tribunal Order Date 13-05-2010
Assessment Year 1998-1999
Appeal Filed On 22-05-2002
Judgment Text
PAGE 1 OF 9 IN THE INCOME TAX APPELLATE TRIBUNAL VISAKHAPATNAM BENCH VISAKHAPATNAM BEFORE: SHRI SUNIL KUMAR YADAV JUDICIAL MEMBER AND SHRI BR BASKARAN ACCOUNTANT MEMBER ITA NO. 371/VIZAG/2002 ASSESSMENT YEAR : 1998-99 M/S INVEST EXPORTS GMBH GERMANY REP. BY RINL VISAKHAPATNAM STEEL PLANT VISAKHAPATNAM. ACIT SPECIAL RANGE-1 VISAKHAPATNAM. (APPELLANT) VS. (RESPONDENT) PAN : AABCR 04352 ITA NO. 536/VIZAG/2002 ASSESSMENT YEAR:1998-99 M/S TURBO LUFTTECHNIK GMBH GERMANY. REP BY RINL VISAKHAPATNAM STEEL PLANT VISAKHAPATNAM. DCIT SPECIAL RANGE-1 VISAKHAPATNAM. (APPELLANT) VS. (RESPONDENT) PAN : AABCR 04352 ITA NO. 537/VIZAG/2002 ASSESSMENT YEAR:1998-99 M/S SKET EXPORT IMPORT GERMANY. REP BY RINL VISAKHAPATNAM STEEL PLANT VISAKHAPATNAM. JT. CIT SPECIAL RANGE-1 VISAKHAPATNAM. (APPELLANT) VS. (RESPONDENT) PAN : AABCR 04352 ASSESSEE BY: SHRI GVN HARI. REVENUE BY: SHRI GSSS GOPINATH PAGE 2 OF 9 ORDER PER SHRI SUNIL KUMAR YADAV JUDICIAL MEMBER : THESE APPEALS ARE PREFERRED BY THE ASSESSEE AGAINS T THE RESPECTIVE ORDERS OF THE CIT(A). SINCE THESE APPEALS WERE HEA RD TOGETHER THEY ARE BEING DISPOSED OFF BY THIS COMMON ORDER FOR THE SAK E OF CONVENIENCE. WE HOWEVER ADJUDICATE THEM ONE AFTER THE OTHER. 2. ITA NO.371 & 536/VIZAG/2002: IN THESE APPEALS THE COMMON ISSUES RAISED BY THE AS SESSEE IS WITH REGARD TO THE NATURE OF RECEIPT RECEIVED BY THE FOR EIGN COMPANY REPRESENTED BY RASTRIYA ISPAT NIGAM LIMITED TOWARDS DESIGN & ENG INEERING FEES. ACCORDING TO THE ASSESSEE THE PRICE PAID FOR DRAWIN GS DESIGNS AND TECHNICAL DATA DISPATCHED FROM ABROAD IS IN THE NATURE OF PL ANT SUPPLIED FROM ABROAD AND ACCORDINGLY NO PART OF INCOME ATTRIBUTABLE TO S UCH PRICE ACCRUES OR ARISES IN INDIA FOR BEING CONSIDERED FOR TAXING IN INDIA UN DER THE PROVISION IN INDIAN INCOME TAX ACT. THE AO TREATED IT TO BE A FEE FOR T ECHNICAL SERVICES WITHIN THE MEANING OF PROVISIONS OF SECTION 9(1)(VII) OF THE INCOME TAX ACT. 3. THE ASSESSEE PREFERRED AN APPEAL BEFORE THE CIT( A) AND THE CIT(A) FOLLOWING THE ORDER OF THE TRIBUNAL OF ITAT HYDERA BAD BENCH DATED 31.08.1988 HAS CONFIRMED THE ORDER OF THE AO. 4. NOW THE ASSESSEE IS BEFORE US AND HAS PLACED HE AVY RELIANCE UPON THE ORDER OF THE BENCH OF THE TRIBUNAL IN THE CASE OF M /S SKET EXPORT IMPORT GERMANY VS DCIT SPECIAL RANGE-1 VISAKHAPATNAM IN ITA NO.1740/H/96 DATED 31.12.2002 IN WHICH THE RETURN WAS FILED BY T HE RINL IN ITS REPRESENTATIVE CAPACITY. IN THAT CASE THE COST OF D ESIGN & ENGINEERING WAS CONSIDERED TO BE THE PART OF PLANT SUPPLIED FROM AB ROAD AND HENCE NOT TAXABLE IN INDIA. WHILE HOLDING SO THE TRIBUNAL HAS RELIED UPON THE JUDGMENT OF JURISDICTIONAL HIGH COURT IN CASE OF KLAYMAN POR CELAINS LTD. VS. ITO REPORTED AT 229 ITR 735. IN THIS CASE THE TRIBUNAL HAS ALSO EXAMINED THE PAGE 3 OF 9 EARLIER ORDER OF TRIBUNAL OF HYDERABAD BENCH WHICH HAD BEEN RELIED BY THE CIT(A) WHILE CONFIRMING THE ORDER OF THE AO. 5. THE LD COUNSEL FOR THE ASSESSEE HAS ALSO INVITED OUR ATTENTION TO THE ORDER OF THE TRIBUNAL IN THE CASE OF ACIT VS M/S L AIR LIQUIDE FRANCE REP BY BHPV LTD. VISAKHAPATNAM IN ITA NO.412/VIZAG/98 IN WHICH THE TRIBUNAL HAS TAKEN A SIMILAR VIEW. 6. OUR ATTENTION WAS ALSO INVITED TO THE JUDGMENT O F THE AUTHORITY FOR ADVANCE RULINGS IN THE CASE OF HYOSUNG CORPORATION 224 CTR 329. IN SUPPORT OF HIS CONTENTION THAT WHERE THE TRANSFER O F TITLE TO EQUIPMENT AND MATERIAL TOOK PLACE OUTSIDE THE TERRITORY OF INDIA I N ACCORDANCE WITH THE CONTRACTUAL STIPULATION THE INCOME ARISING OUT OF SUCH TRANSACTIONS CANNOT BE SAID TO HAVE ACCRUED OR ARISED IN INDIA. 7. THE LD COUNSEL FOR THE ASSESSEE FURTHER CONTENDE D THAT SINCE THE DELIVERY OF DESIGNS AND ENGINEERING DOCUMENTS WAS A FFECTED OUTSIDE INDIA THE COST THEREOF RECEIVED FROM THE RINL CANNOT BE HE LD CHARGEABLE TO TAX IN INDIA. 8. THE LD DR ON THE OTHER HAND HAS PLACED HEAVY RE LIANCE UPON THE ORDER OF THE CIT(A). 9. HAVING HEARD THE RIVAL SUBMISSIONS AND FROM CARE FUL PERUSAL OF THE RECORD WE FIND THAT THE IMPUGNED ISSUE IS SQUARELY COVERED BY THE ORDER OF THE TRIBUNAL IN THE CASE OF M/S SKET EXPORT IMPORT GERMANY VS DCIT (SUPRA) IN WHICH THE TRIBUNAL HAS EXAMINED THE EARLIER ORDE R OF THE TRIBUNAL OF HYDERABAD BENCH WHICH WAS RELIED UPON BY THE CIT(A) . THE RELEVANT OBSERVATION OF THE TRIBUNAL IN THIS REGARD IS AS UN DER: 3.4 THE LEARNED COUNSEL ON BEHALF OF THE ASSESSEE HAS PRAYED FOR RECONSIDERATION OF THE DECISION OF THE H ONBLE HYDERABAD BENCH ALTHOUGH THE MATTER HAS BEEN DECIDE D AGAINST PAGE 4 OF 9 THE ASSESSEE BY THE HONBLE HYDERABAD UNDER SIMILAR FACTS FOR THE FOLLOWING REASONS. THE HONBLE HYDERABAD BENCH OF THE TRIBUNAL HAS HE LD AGAINST THE CASE OF THE ASSESSEE IN THE CASE OF ITO VS SMS SCHLOEMANN SIEMAG AKTIENGESSELSCHAFT DUSSELDORF REP ORTED IN 57 ITD 254 (HYD.) THAT PAYMENT TOWARDS SUPPLY OF D ESIGNS AND DRAWINGS IS TAXABLE AS FEE FOR TECHNICAL SERVICES FOLLOWING THE ORDER OF THE HONBLE BANGALORE BENCH OF THE TRIBUNA L IN THE CASE OF AEG AKTIENGESSELSCAFT VS IAC REPORTED IN 48 ITD 359 (BANG.). ALTHOUGH THE AFORESAID TWO ORDERS HAVE BEEN PASSED AGAINST THE ASSESSEE IT HAS BEEN HELD BY THIS BENCH OF THE TRIBUNAL IN THE CASE OF THE ANDHRA PETROCHEMICALS LIMITED VS DC IT IN ITA NO.721 & 722/HYD/96) HELD THAT ENGINEERING FEES IS NOT TAXABLE AS ROYALTY AS IT IS IN THE NATURE OF PLANT AND HEN CE IT IS NOT LIABLE TO TAX IN INDIA. IT WAS ALSO HELD BY THE HON BLE JURISDICTIONAL HIGH COURT OF ANDHRA PRADESH IN THE CASE OF KLAYMAN PORCELAINS LTD. VS. ITO REPORTED AT 229 IT R 735 (A.P.) WHEREIN THE HONBLE AP HIGH COURT HAS HELD THAT DES IGN AND DOCUMENTATION FEE CANNOT BE CONSIDERED AS ROYALTY B UT IS ONLY TO BE CONSIDERED AS PLANT SUPPLIED FROM ABROAD AND HENCE IS NOT LIABLE TO TAX IN INDIA. 4. ALTHOUGH THE LEARNED DR STRONGLY SUPPORTED THE O RDER OF THE AO AND THAT OF THE CIT(A) AFTER DUE CONSIDERAT ION OF THE ARGUMENT AND COUNTER ARGUMENT FROM BOTH THE SIDES IN OUR CONSIDERED OPINION IN VIEW OF THE SUBSEQUENT JUDGME NT OF THE HONBLE A.P. HIGH COURT CITED SUPRA AND IN VIEW OF OUR OWN ORDER IN APPEAL NO.721 & 722/HYD/96 DATED 11.4.2002 IN THE CASE OF ANDHRA PETROCHEMICALS LIMITED VS DCIT FIRST LY WE ARE TO FOLLOW THE JUDGMENT OF THE HONBLE JURISDICTIONAL H IGH COURT CITED SUPRA AND SECONDLY WE ARE SUPPOSED TO FOLLOW OUR OWN ORDER ACCORDING TO WHICH WE HAVE ALREADY HELD THAT ENGINEERING FEES IS NOT TAXABLE AS IT IS IN THE NAT URE OF PLANT AND IT IS NOT LIABLE TO TAX IN INDIA. HENCE THE FIRST I SSUE INVOLVED IN THIS CASE IS DECIDED IN FAVOUR OF THE ASSESSEE. THE SIMILAR VIEW WAS ALSO TAKEN BY THE TRIBUNAL IN THE CASE OF ACIT VS M/S LAIR LIQUIDE FRANCE(SUPRA). 10. WE ARE THEREFORE FOLLOWING THE ORDER OF THE TR IBUNAL HOLD THAT THE FEES FOR DESIGN AND ENGINEERING CHARGES IS NOT A FE E FOR TECHNICAL SERVICES AND AS SUCH IT IS NOT TAXABLE IN INDIA AS IT IS IN THE NATURE OF PLANT. IN THE CASE OF PAGE 5 OF 9 HYOSUNG CORPORATION THE AAR HAS RULED THAT WHERE T HE TRANSACTION TOOK PLACE OUTSIDE INDIA THE INCOME GENERATED THEREON I S NOT TAXABLE IN INDIA. WE THEREFORE RELYING UPON THESE PROPOSITIONS SET ASIDE THE ORDER OF THE CIT(A) AND HOLD THAT THE FEE FOR DESIGNS AND ENGINE ERING CHARGES ARE IN THE NATURE OF PLANT AND NOT TAXABLE IN INDIA. 11. ITA NO.537/VIZAG/2002 IN THIS APPEAL ORDER OF THE CIT (A) IS ASSAILED ON FOLLOWING GROUNDS: 1.A. THE LEARNED FIRST APPELLATE AUTHORITY IS NOT J USTIFIED IN CONFIRMING THE ACTION OF THE AO IN BRINGING TO TAX THE INTERES T ALLOWED BY THE INCOME TAX DEPARTMENT UNDER SECTION 244A AMOUNTI NG TO RS.32 32 650 ON THE AMOUNT OF TAX PAID BY RINL AS REPRESENTATIVE ASSESSEE OF THE NON-RESIDENT COMPANY AND REFUND RECEIVED THEREOF BY IT. THE APPELLANT SUBMI TS THAT SUCH INTEREST HAVING BEEN RECEIVED BY RINL WHICH HAD PAID THE TAX IN DISCHARGE OF THE CONTRACTUAL OBLIGATIONS AND RECEIV ED BACK THE REFUND THE SAME WAS NEVER RECEIVED BY THE NON-RESI DENT ASSESSEE AND THAT ACCORDINGLY THE QUESTION OF TAXIN G THE SAME IN ITS HANDS DOES NOT ARISE. 1.B. WITHOUT PREJUDICE TO THE ABOVE CONTENTION AND ASSUMING BUT NOT CONCEDING THAT SUCH INTEREST HAD ACTUALLY BEEN RECEIVED BY IT IN THE FIRST INSTANCE THE APPELLANT SUBMITS THA T THE LEARNED FIRST APPELLATE AUTHORITY IS NOT JUSTIFIED IN NOT D IRECTING TO ALLOW DEDUCTION OF IDENTICAL SUM WHICH IS DEEMED TO HAVE BEEN PAID BY THE NON-RESIDENT COMPANY TO RINL. 1.C. APPELLANT SUBMITS THAT IF A PERSON DIVERTS INC OME FROM OVERRIDING TITLE TO ANOTHER PERSON BEFORE IT ACTUAL LY ACCRUES TO HIM SUCH INCOME IS TAXABLE ONLY IN THE HANDS OF TH E LATTER WHO ACTUALLY RECEIVED SUCH INCOME BY WAY OF OVERRIDING TITLE AS PER THE WELL SETTLED PROPOSITION OF LAW UPHELD IN SEVER AL JUDICIAL PRONOUNCEMENTS. 1.D. APPELLANT RESPECTFULLY SUBMITS THAT IT IS ONLY REAL INCOME THAT CAN BE ASSESSED TO TAX AND IT NOT BEING EVEN THE CA SE OF DEPARTMENT THAT THE AMOUNT OF INTEREST ASSESSED AS INCOME OF THE NON-RESIDENT APPELLANT COMPANY EVER REACHED IT NOR WAS ENJOYED BY IT AS A DEPARTMENT ITSELF HAD DIRECTLY REFUNDED THE SAME TO RINL THAT SUCH INTEREST RECEIVED IS NOT TA XABLE IN ITS HANDS. PAGE 6 OF 9 1.E. FOR ALL THE ABOVE PROPOSITIONS RELIANCE IS PL ACED ON THE ORDER OF THE HONBLE ITAT VISAKHAPATNAM BENCH IN THE CASE OF ANOTHER NON-RESIDENT COMPANY SMS SCHOLEMANN SIEMAG AG GER MANY (ITA NO.179/H/95) IN WHICH CASE ALSO WHEN INTEREST WAS RECEIVED UNDER SECTION 244A FROM INCOME TAX DEPARTME NT ON ACCOUNT OF THE TAXES PAID BY RINL AND THE SAME NON- RESIDENT COMPANY UNDER IDENTICAL FACTS AND CIRCUMSTANCES W HEREIN THE HONBLE BENCH HAD HELD THAT SUCH INTEREST PAID TO R INL ON ACCOUNT OF THE NON-RESIDENT COMPANY IS TAXABLE ONL Y IN THE HANDS OF THE RINL BUT NOT IN THE HANDS OF THE NON-RE SIDENT COMPANY. 12. THOUGH THE ASSESSEE HAS RAISED VARIOUS GROUNDS OF APPEALS BUT THEY ALL RELATE TO ONE ISSUE AS TO IN WHOSE HANDS THE IN TEREST UNDER SECTION 244A OF INCOME TAX ACT IS TO BE CHARGED TO TAX. 13. THE FACTS BORNE OUT FROM THE RECORD ARE THAT TH E ASSESSEE IS A NON- RESIDENT COMPANY AND ITS RETURN OF INCOME WAS FILED BY M/S RINL IN ITS CAPACITY AS REPRESENTATIVE TO ASSESSEE BY VIRTUE OF PROVISIONS OF SECTION 163 OF THE INCOME TAX ACT. FOR THE ASSESSMENT YEAR 1989- 90 RINL HAS RECEIVED A REFUND IN THE CAPACITY OF REPRESENTATIVE ASSESSEE TO THE APPELLANT A NON RESIDENT COMPANY ALONG WITH THE INTEREST U/S 244A O F THE ACT. THE INTEREST RECEIVED WAS OFFERED TO TAX BY M/S RINL IN HIS HANDS FOR THE ASSESSMENT YEAR 1994-95. THE AO CONSIDERED THIS INTEREST RECEIVED TO BE TAXABLE IN THE HANDS OF THE ASSESSEE UNDER THE HEAD INCOME FROM OTHER SO URCES AND HE ACCORDINGLY TAXED THE SAME. 14. ASSESSEE PREFERRED AN APPEAL BEFORE THE CIT(A) WITH THE SUBMISSION THAT THE REFUNDS HAVE BEEN GRANTED TO RINL IN THE CA PACITY OF THE REPRESENTATIVE ASSESSEE ALONG WITH THE INTEREST AND THE SAID INTEREST WAS ALSO OFFERED TO TAX BY THE RINL IN THE SAME CAPACITY. TH US ONCE THE INTEREST WAS OFFERED TO TAX BY THE RINL THE SAME CANNOT BE AGAIN ASSESSED IN THE HANDS OF THE ASSESSEE. CIT(A) WAS NOT CONVINCED WITH THE EXPLANATION OF THE ASSESSEE AND HE CONFIRMED THE ORDER OF THE AO. PAGE 7 OF 9 15. NOW THE ASSESSEE HAS PREFERRED AN APPEAL BEFOR E THE TRIBUNAL WITH THE SUBMISSIONS THAT THIS ISSUE IS SQUARELY COVERED BY THE ORDER OF THE TRIBUNAL IN THE CASE OF SMS SCHOLEMANN SIEMAG AG G ERMANY REP. BY RINL VS DCIT IN ITA NO.179/HYD/1995 DATED 26.03.2002 IN WHICH UNDER IDENTICAL FACTS AND CIRCUMSTANCES THE TRIBUNAL HAS TAKEN A V IEW THAT ON THE BASIS OF REAL INCOME THEORY WHEN AN INCOME DOES NOT REACH A PERSON BY OVERRIDING TITLE HE CANNOT BE ASSESSED ON THE SAME. TRIBUNAL ACCORDINGLY DECIDED THE ISSUE IN FAVOUR OF THE ASSESSEE. LD DR ON THE OTHE R HAND HAS PLACED RELIANCE UPON AN ANOTHER ORDER OF THE TRIBUNAL IN THE CASE O F DAVY MCKEE (LONDON) LTD REP. BY APC LTD VS ACIT IN ITA NO.36/VIZAG/2006 WITH THE SUBMISSIONS THAT IN THIS CASE THE TRIBUNAL HAS TAKEN A CONTRAR Y VIEW AND HELD THAT WHERE THE APPELLANT BEING RIGHTFUL OWNER OF THE AMOUNT OF TAX REFUNDED TO IT THE CONSEQUENT AMOUNT OF INTEREST BEING IT INCOME HAVIN G BEEN RECEIVED IN INDIA IS FOUND RIGHTLY TO BE ASSESSED IN ITS HANDS. 16. THE LD DR FURTHER CONTENDED THAT IN THE LIGHT O F THE LATEST ORDER OF THE TRIBUNAL THE INTEREST WAS RIGHTLY TAXED IN THE HAN DS OF THE ASSESSEE. 17. WE HAVE CAREFULLY EXAMINED THE ORDER OF THE LOW ER AUTHORITIES AND WE FIND THAT UNDISPUTEDLY THE REFUND WAS RECEIVED BY RINL IN ITS REPRESENTATIVE CAPACITY ALONG WITH THE INTEREST U/S 244A OF THE AC T. NOTHING HAS BEEN BROUGHT ON RECORD TO ESTABLISH THAT EITHER THE REFU ND OR THE INTEREST WAS EVER PASSED OVER TO THE APPELLANT / ASSESSEE BY THE RINL. IN THESE CIRCUMSTANCES WE CANNOT IGNORE THE REAL INCOME THEORY WHICH HAS B EEN APPROVED BY THE APEX COURT AND VARIOUS HIGH COURTS. IN THE INSTANT CASE THE RINL HAS ALREADY OFFERED THE INTEREST TO TAX AND IF THE REVE NUE IS ALLOWED TO TAX THEIR RECEIPT OF INTEREST IN THE HANDS OF THE ASSESSEE I T WOULD AMOUNT TO DOUBLE TAXATION. THIS ASPECT WAS EXAMINED BY THE TRIBUNAL IN THE CASE OF SMS SCHOLEMANN SIEMAG AG GERMANY REP. BY RINL VS DCIT ( SUPRA) IN WHICH RINL HAD RECEIVED THE REFUND ALONG WITH THE INTEREST IN THE CAPACITY OF THE REPRESENTATIVE ASSESSEE. THE FACTS OF THE CASE ARE SIMILAR TO THE PRESENT PAGE 8 OF 9 CASE. IN THAT CASE THE TRIBUNAL HAS CATEGORICALLY H ELD THAT ON THE BASIS OF REAL INCOME THEORY WHEN AN INCOME DOES NOT REACH TO A PE RSON BY OVERRIDING TITLE HE CANNOT BE TAXED. THE RELEVANT PORTION IS EXTRAC TED HERE UNDER: 8. ON HEARING THE RIVAL SUBMISSIONS ON A PERUSAL OF THE RECORD AVAILABLE WITH US AND ON GOING THROUGH THE P APER BOOK AND WRITTEN SUBMISSION FILED BY THE APPELLANT-ASSES SEE IT HAS BEEN OBSERVED THAT THE DEPARTMENT HAS ALREADY RECOG NIZED AND APPROVED RINL TO BE THE AGENT OF SMS SCHLOEMAN S EIMAG AG GERMANY AND THE TAX PAID BY THEM ON BEHALF OF SM S SCHLOEMANN SIEMAG AG GERMANY HAS ALSO BEEN APPROVED AS A CONTRACTUAL OBLIGATION. CONSIDERING ALL THE RELEVA NT PORTIONS OF THE CORRESPONDENCES ORDERS ETC. IT IS PERTINENT T O NOTE HERE THAT THE REVENUE HAS NOT BEEN ABLE TO ESTABLISH THA T THE INTEREST ASSESSED AS INCOME OF THE NON-RESIDENT COM PANY EITHER REGISTERED THEM OR WAS ENJOYED BY THEM. ON THE OTHER HAND THE REVENUE HAS SOMETIMES INSISTED FOR ADJUST MENT OF TAX DUE TO RINL FROM OUT OF THE CLAIM OF INTEREST DU E TO SMS SCHLOEMANN SIEMAG AG GERMANY AND SUBSEQUENTLY ON BE ING STAYED BY THE CIT(A) THE DEMAND SO RAISED THE REFUN D HAS BEEN GRANTED TO RINL ON BEHALF OF SMS SCHLOEMANN SIE MAG AG GERMANY. THEREFORE ON THE BASIS OF REAL INCOME THEORY WHEN AN INCOME DOES NOT REACH A PERSON BY OVERRIDIN G TITLE HE CANNOT BE ASSESSED ON THE SAME. THE FACTUAL ASPECT AS WELL AS THE LEGAL ASPECT WEIGH MORE IN FAVOUR OF THE ASS ESSEE- APPELLANT COMPARED TO THAT OF THE REVENUE THEREFOR E WE DO NOT HAVE ANY HESITATION TO DECIDE THE ISSUE IN FAVO UR OF THE ASSESSEE PARTICULARLY BECAUSE THE CASE LAWS CITED BY THE ASSESSEE STRENGTHEN THEIR CASE ON LEGAL ASPECT AND SO ALSO THE APPROVAL BY THE REVENUE BY WAY OF DIFFERENT CORRESP ONDENCES WITH REGARD TO ADJUSTMENT DISBURSEMENT ON BOTH TH E REFUND AND INTEREST IN FAVOUR OF RINL ON BEHALF OF NON-RESI DENT APPELLANT PROVIDE SOUND FOOTING TO THE CLAIM OF THE NON- RESIDENT COMPANY. HAVING HEARD THE PARTIES TAKING INTO CONSIDERATION AL THE ABOVE RELEVANT FACTS AND POINT S OF LAW INVOLVED IN THE ISSUE THE ISSUE IS HEREBY DECIDED IN FAVOUR OF THE NON-RESIDENT COMPANY. 18. WE HAVE ALSO GONE THROUGH THE ORDERS OF THE TRI BUNAL REFERRED TO BY THE REVENUE BUT WE DO NOT AGREE WITH THE REASONS GI VEN THEREIN WHILE DISALLOWING THE CLAIM OF THE ASSESSEE. WE THEREFOR E FOLLOWING THE ORDER OF THE TRIBUNAL IN THE CASE OF SMS SCHLOEMANN SIEMAG A G GERMANY IN WHICH THE REPRESENTATIVE ASSESSEE IS THE RINL AND THE FACT S OF THE CASE ARE QUITE PAGE 9 OF 9 SIMILAR TO THE PRESENT CASE WE SET ASIDE THE ORDER OF THE CIT(A) AND HOLD THAT THE INTEREST ON REFUND IS NOT CHARGEABLE TO TAX IN THE HANDS OF THE ASSESSEE WHEN IT HAS BEEN ALREADY OFFERED TO TAX BY THE RINL IN THE CAPACITY OF THE REPRESENTATIVE ASSESSEE. 19. IN THE RESULT THE APPEALS OF THE ASSESSEE ARE A LLOWED. PRONOUNCED IN THE OPEN COURT ON 13.5.2010. SD/- SD/- (BR BASKARAN) (SUNIL K UMAR YADAV) ACCOUNTANT MEMBER JUDICIAL MEMBER PVV/SPS VISAKHAPATNAM DATED 13 TH MAY 2010. COPY TO 1 M/S INVEST EXPORTS GMBH GERMANY REP BY M/S RINL VISAKHAPATNAM STEEL PLANT FINANCE & ACCOUNTS DEPT. VISAKHAPATNA M 530 031. 2 M/S TURBO LUFTTECHNIK GMBH GERMANY REP BY M/S RIN L VISAKHAPATNAM STEEL PLANT FINANCE & ACCOUNTS DEPT. VISAKHAPATNA M 530 031. 3 M/S SKET EXPORT IMPORT GERMANY REP BY M/S RINL VI SAKHAPATNAM STEEL PLANT FINANCE & ACCOUNTS DEPT. VISAKHAPATNAM 53 0 031. 4 ADDITIONAL CIT SPECIAL RANGE-1 VISAKHAPATNAM 5 DY CIT SPECIAL RANGE-1 VISAKHAPATNAM. 6 CIT-II VISAKHAPTNAM. 7 CIT(A)-II VISAKHAPTNAM 8 THE DR ITAT VISAKHAPATNAM. 9 GUARD FILE. BY ORDER SENIOR PRIVATE SECRETARY INCOME TAX APPELLATE TRIBUNAL VISAKHAPATNAM