19 December 2016 |
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CASE LAWS RAIN CEMENTS LTD Vs DCIT: SUPREME COURT OF INDIA (Dated: December 16, 2016) Income Tax - Sections 10B, 143(3), 144C(5) & 144C(12). Keywords: expiry of limitation period - filing of objection - remand of matter & service of assessment order. Whether the expiry of limitation period provided to DRP u/s 144C(12) to issue direction u/s 144C(5), would act as a bar for the High Court to remit an impugned matter to the DRP for consideration afresh - NO: SC The assessee, a wholly owned subsidiary of Rain Industries Limited, is engaged in the business of manufacture of Calcinated Petroleum Coke and Power Generation in the State. It had filed the return for the A.Y 2008-09 declaring losses of Rs.23,71,90,124/- after claiming exemption of an amount of Rs.84,87,05,352/- u/s 10B. The assessee's case was taken up for scrutiny and after considering the documents, an order u/s 143(3) was passed by the Joint CIT allowing deduction u/s 10B to a lesser extent than what was claimed in the original return by the assessee. On appeal, the Apex Court held that, ++ we do not find any legal and valid ground for interference. The Special Leave Petition is dismissed. Assessee's appeal dismissed CIT Vs HYOSUNG CORPORATION: SUPREME COURT OF INDIA (Dated: December 16, 2016) Income Tax - Sections 142(1), 143(2), 245N, 245R (2) & 245Q - Constitution of India - Article 14 - India-South Korea DTAA - Article 25. Keywords - constitutional validity - operation of bar - discriminatory in nature - pending application. Whether when the HC has decided the case in favour of the assessee after properly analysing the facts of the case, any interference is warranted even if there is no fresh evidence - NO: SC The assessee, a South Korean company, provides energy solution and manufactures transformers, switchgears, motors, etc. The assessee won a contract awarded by PGCIL for supplying equipments with respect to setting up sub-stations in various locations in India. As per the assessee, the supply of the equipment was effected outside India and all work related thereto was also to be performed outside India. As far as the on shore portion, including transportation, was concerned that was to be carried out in India by Larsen and Toubro Ltd. in terms of a MOU entered into between the assessee and L&T. The assessee took the stand that no portion of its revenue from off shore supplies was liable to be taxed in India. Consistent with this position, the assessee claimed refund of TDS deducted by PGCIL. The HC held that the applications filed by assessee in respect of the transaction of supply of equipment for AY 2008-09 and 2009-10 were rightly rejected by the AAR since on the date of filing of such applications before the AAR, the question raised therein was already pending before the income tax authorities by virtue of the notices u/s 142(1) having already been issued to the assessee. Thus, the writ petitions filed are dismissed. As regards the applications concerning supply contracts executed during AY 2010-11, AAR erred in rejecting them by applying clause (i) to proviso to Section 245R(2). Notices u/s 142(1) in respect of those transactions pertaining to AY 2010-11 were issued only after the filing of the application before AAR. On appeal, the Apex Court held that, + that there is no legal and valid ground for interference. The Special Leave Petitions are dismissed. Revenue's appeal dismissed PR CIT Vs BABA GLOBAL LTD: DELHI HIGH COURT (Dated: December 14, 2016) Income tax - Sections 92C & 153A. Keywords - absence of incriminating material & validity of review. The assessee's premises for the subject year was searched after the completion of scrutiny assessment proceedings, which concededly resulted in no unearthed incriminating material. However, based upon the existing material, the AO referred the matter to the TPO u/s 92C on the basis of an opinion that advance to the AEs on interest-free basis ought to have attracted an addition. The TPO, after conducting appropriate analysis, proposed the ALP interest on the said advances. On appeal, the DRP reduced the rate of interest. On further appeal, the ITAT quashed the assessment on the ground that proceedings u/s 153A would be invalid in absence of seizure of any incriminating material. On appeal, the HC held that, Whether initiation of proceedings u/s 153A would be invalid, in absence of seizure of any incriminating material found during search carried out in a concluded scrutiny assessment case - YES: HC + It is evident that the scrutiny assessments concluded earlier were based upon queries. Futher, the assessee had disclosed all the materials which came to be reviewed subsequently u/s 153A proceedings. Thus, having regard to the the decision in Kabul Chawla, the ITAT, in this Court's opinion, did not fall into error in quashing the proceedings. Revenue's appeal dismissed SUNDOWNER OFFSHORE INTERNATIONAL BERMUDA LTD Vs ADIT: DELHI ITAT (December 16, 2016) Income tax - Section 44BB. Keywords - gross receipts - mobilization expenses & similar issue. The assessee had preferred this appeal challenging the action of the CIT(A) in holding that the amounts aggregating to Rs. 66,978,460/-, received by assessee from the customers as reimbursement of mobilization/demobilization expenses, is to be included in the gross receipts u/s 44 BB. On appeal, the ITAT held that, Whether an issue decided by the CIT(A) following the observations of the Jurisdictional High Court, can be declared as perverse - NO: ITAT + The issue in dispute has been decided by the CIT(A) against the assessee by affirming the action of the AO in following the decision of the Jurisdictional High Court in the case of CIT vs. Halliburton Offshore Services Inc. 2007-TII-04-HC-UKHAND-INTL, wherein it has been held that the reimbursement of the expenditure is includible in the revenue as contemplated by section 44BB. + It is also found that the similar issue regarding inclusion of demobilization expenses in the gross receipts u/s 44BB, has been decided against the assessee by the ITAT, 'G' Bench, New Delhi in ITA No. 2914/Del/2010 for the A.Y 2006-07. Further, the CIT(A) in the present case has decided this issue in favour of the Department by following the decision of the Jurisdictional High Court, which is binding of all the authorities working under the Jurisdictional of High Court. Therefore, there is no infirmity in the order of the Ld. CIT(A). Assessee's appeal dismissed |
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