M/s. INDIA INDEX SERVICES & PRODUCTS LTD., MUMBAI v. ACIT - 10(1), MUMBAI

ITA 633/MUM/2006 | 2003-2004
Pronouncement Date: 23-07-2010 | Result: Allowed

Appeal Details

RSA Number 63319914 RSA 2006
Assessee PAN AAACI5633A
Bench Mumbai
Appeal Number ITA 633/MUM/2006
Duration Of Justice 4 year(s) 5 month(s) 26 day(s)
Appellant M/s. INDIA INDEX SERVICES & PRODUCTS LTD., MUMBAI
Respondent ACIT - 10(1), MUMBAI
Appeal Type Income Tax Appeal
Pronouncement Date 23-07-2010
Appeal Filed By Assessee
Order Result Allowed
Bench Allotted D
Tribunal Order Date 23-07-2010
Assessment Year 2003-2004
Appeal Filed On 27-01-2006
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI `L BENCH BEFORE SHRI T.R.SOOD ACCOUNTANT MEMBER & SHRI R.S.PADVEKAR JUDICIAL MEMBER I.T.A.NO.633/MUM/2006 - A.Y 2003-04 M/S INDIA INDEX SERVICES & PRODUCTS LTD. EXCHANGE PLAZA C-1 BLOCK G BANDRA KURLA COMPLEX BANDRA (E) MUMBAI 400 051. PAN NO.AAACI 5633 A ASST. COMMISSIONER OF I.T. 10(1) MUMBAI (APPELLANT) (RESPONDENT) APPELLANT BY : MR. ARVIND SONDE. RESPONDENT BY : MR. MAYANK PRIYADARSHI. O R D E R PER T.R.SOOD AM: IN THIS APPEAL VARIOUS GROUNDS HAVE BEEN RAISED BU T THE LD. COUNSEL OF THE ASSESSEE REFERRED TO GROUND NO.3 WHI CH IS AS UNDER: 3. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE AND IN LAW THE LEARNED COMMISSIONER OF INCOME TAX [APPEALS] HAS ER RED IN REDUCING THE AMOUNT OF REFUND WITHOUT GIVING ANY OPPORTUNITY OF SHOWING CAUSE AGAINST SUCH REDUCTION WHICH IS WRONG AND CONTRARY TO THE FACTS OF THE CASE AND THE PROVISIONS OF SECTION 251(2) OF THE IN COME TAX ACT 1961 AND THE RULES MADE THEREUNDER. 2. THE LD. COUNSEL OF THE ASSESSEE SUBMITTED THAT I N THIS CASE PROPER OPPORTUNITY HAS NOT BEEN GIVEN BY THE CIT[A] . HE NARRATED THE FACTS THAT ORIGINALLY ASSESSEE HAS CLAIMED CREDIT F OR TDS DEDUCTED IN SINGAPORE WHICH WAS NOT ALLOWED IN THE INTIMATION ISSUED U/S.143[1]. AGGRIEVED BY THE SAME ASSESSEE COMPANY HAD FILED A N APPEAL AND AFTER VERIFYING THE FACT THE LD. CIT[A] DIRECTED TH E AO TO GIVE CREDIT IN ACCORDANCE WITH THE LAW. LATER ON AO PASSED AN ORD ER U/S.154 IN 2 WHICH CREDIT FOR TAX AMOUNTING TO RS.88 042/- WAS G IVEN AGAINST THE ASSESSEES CLAIM OF RS.1 81 556/- WHICH WAS DEDUCTE D IN SINGAPORE. THIS WAS DONE BECAUSE TAX WAS DEDUCTED FOR TWO YEA RS. THE AO BY REFERRING TO THE PROVISIONS OF SEC.199 ALLOWED ONL Y PROPORTIONATE CREDIT ON THE BASIS OF THE INCOME DECLARED BY THE ASSESSEE . 3. BEFORE THE CIT[A] IT WAS CONTENDED THAT IN THIS CASE CREDIT WAS TO BE ALLOWED IN TERMS OF DTAA AND THEREFORE STRI CTLY SPEAKING SEC.199 WOULD NOT BE APPLICABLE. THE LD. CIT[A] AFT ER EXAMINING THE SUBMISSIONS REFERRED TO THE PROVISIONS OF ARTICLE 2 5(2) WHICH READS AS UNDER: ARTICLE 25(2). WHERE A RESIDENT OF INDIA DERIVES I NCOME WHICH IN ACCORDANCE WITH THE PROVISIONS OF THIS AGREEMENT M AY BE TAXED IN SINGAPORE INDIA SHALL ALLOW AS A DEDUCTION FROM TH E TAX ON THE INCOME OF THAT RESIDENT AN AMOUNT EQUAL TO THE SINGAPORE T AX PAID WHETHER DIRECTLY OR BY DEDUCTION. WHERE THE INCOME IS A DIV IDEND PAID BY A COMPANY WHICH IS A RESIDENT OF SINGAPORE TO A COMPA NY WHICH IS A RESIDENT OF INDIA AND WHICH OWNS DIRECTLY OR INDIRE CTLY NOT LESS THAN 25 PER CENT OF THE SHARE CAPITAL OF THE COMPANY PAYING THE DIVIDEND THE DEDUCTION SHALL TAKE INTO ACCOUNT THE SINGAPORE TAX PAID IN RESPECT OF THE PROFITS OUT OF WHICH THE DIVIDEND IS PAID. SUCH DEDUCTION IN EITHER CASE SHALL NOT HOWEVER EXCEED THAT PART OF THE TA X [AS COMPUTED BEFORE THE DEDUCTION IS GIVEN] WHICH IS ATTRIBUTABL E TO THE INCOME WHICH MAY BE TAXED IN SINGAPORE. ON THE BASIS OF THE ABOVE THE LD. CIT[A] HELD AS U NDER: IT IS THUS CLEAR THAT THE TAX DEDUCTION WOULD IN N O CASE EXCEED THAT PART OF THE TAX WHICH IS ATTRIBUTABLE TO THE INCOME WHICH MAY BE TAXED IN SINGAPORE. IT IS THEREFORE CLEAR THAT PROVISIONS OF DTAA PROVIDES FOR REBATE/DEDUCTION OF TAX IN THE INDIA ON INCOME WHIC H IS TAXED IN SINGAPORE AND IN NO CASE SUCH REBATE WOULD EXCEED T HE TAX PAYABLE IN INDIA IN THE INSTANT CASE. LOOKING TO THE FACTS OF THE CASE IT IS SEE THAT AO HAS ALLOWED TAX PAID IN SINGAPORE ON SUCH I NCOME ON WHICH TAX HAS BEEN PAID IN SINGAPORE. AND THEREFORE THE A O IS DIRECTED TO RECOMPUTE THE TAX PAYABLE IN INDIA ON INCOME WHICH IS TAXED IN SINGAPORE. ONCE SUCH TAX IS COMPUTED ALLOW THE DED UCTION OF THE TAXES PAID IN SINGAPORE. ONCE SUCH TAX IS COMPUTED ALLOW THE DEDUCTION OF THE TAXES PAID IN SINGAPORE FROM SUCH TAX PAYABLE ON SUCH INCOME EARNED IN SINGAPORE. ANY EXCESS TAX PAI D IN SINGAPORE 3 SHOULD BE IGNORED AND TAX PAYABLE AND REFUND SHOULD BE ALLOWED ON TAXES PAID IN INDIA ONLY. 4. THE LD. COUNSEL OF THE ASSESSEE SUBMITTED THAT T HIS AMOUNTED TO AN ENHANCEMENT BECAUSE THE BASIS OF CREDIT ITSELF H AS BEEN CHANGED WITHOUT ISSUING A NOTICE U/S.251 FOR ENHANCEMENT. T HEREFORE THE MATTER SHOULD GO BACK FOR AN OPPORTUNITY TO THE ASS ESSEE TO PRESENT ITS CASE. 5. ON THE OTHER HAND THE LD. DR HAD NO OBJECTION I F THE ISSUE WAS RESTORED TO THE CIT[A]. 6. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS CAREFUL LY AND SINCE THE CIT[A] HAS CHANGED THE BASIS OF ALLOWING THE CR EDIT HE SHOULD HAVE GIVEN THE SPECIFIC NOTICE U/S.251(2) BECAUSE T HIS MAY AMOUNT TO ENHANCEMENT. THEREFORE WE SET ASIDE THE ORDER OF T HE LD. CIT[A] AND REMIT THE MATTER BACK TO HIS FILE TO RE-EXAMINE THE ISSUE AFTER ISSUING NOTICE U/S.251(2) AND PROVIDING AN ADEQUATE OPPORTU NITY TO THE ASSESSEE. 7. IN THE RESULT APPEAL IS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 23RD DAY OF JULY 2010. SD/- SD/- (R.S.PADVEKAR) (T.R.SOOD) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI: 23 RD JULY 2010. P/-*