Baker Hughes Singapore Pte. Ltd., Dehradun V. ADIT, Dehradun

CO 73/DEL/2013

• Counselvise Citation: [2015] 123 COUNSELVISE.COM (IT) 0546 (ITAT-DELHI)
• Duration Of Justice: 2 year(s) 4 day(s)
• Appeal Type: Cross Objection
• Pronouncement Date: 20-04-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 22-01-2015
• Assessment Year: 2004-2005
• Appeal Filed On: 15-04-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: POONAM KHAIRA SIDHU
• Keywords: Presumptive income; Business income; Double taxation relief
• Section: 143(3); 234B

Judgement Text

I.T.A. NO : 744, /DEL/13 AND CO NO. 7 3 /DEL/13 PAGE 1 OF 10 IN THE INCOME TAX APPELLATE TRIBUNAL DELHI A BENCH, NEW DELHI [CORAM: PRAMOD KUMAR AM AND C . M . GARG JM ] I.T.A. NO.: 744 /DEL/13 ASSESSMENT YEARS 2004 - 05 ADDITIONAL DIRECTOR OF INCOME TAX (INTERNATIONAL TAXATION), DEHRADUN .APPELLANT VS. BAKER HUGHES SINGAPORE PTE LTD .. . RESPONDENT [PAN: AAACB8516F] CO NO. 7 3 /DEL/13 ARISING OUT OF I.T.A. NO.: 744 /DEL/13 ASSESSMENT YEARS 2004 - 05 BAKER HUGHES SINGAPORE PTE LTD ............. CROSS - OBJECTOR [PAN: AAACB8516F] VS. ADDITIONAL DIRECTOR OF INCOME TAX (INTERNATIONAL TAXATION), DEHRADUN .RESPONDENT APPEARANCES BY: POONAM KHAIRA SID HU , FOR THE APPELLANT AMIT ARORA, FOR THE RESPONDENT DATE OF CONCLUDING THE HEARING : JANUARY 22 , 201 5 DATE OF PRONOUNC ING THE ORDER : APRIL 20 , 201 5 O R D E R PER PRAMOD KUMAR: 1. BY WAY OF THIS APPEAL AS ALSO BY THE CROSS OBJECTION, CORRECTNESS OF LEARNED CIT(A)S ORDER DATED 22 ND NOVEMBER 2012, IN THE MATTER OF ASSESSMENT UNDER SECTION 143(3) R.W.S. 148 OF THE I NCOME TAX ACT 1961 FOR THE ASSESSMENT YEAR 2004 - 05, HAS BEEN CALLED INTO QUESTION. 2. WE WILL FIRST TAKE UP THE APPEAL FILED BY THE ASSESSING OFFICER. I.T.A. NO : 744, /DEL/13 AND CO NO. 7 3 /DEL/13 PAGE 2 OF 10 3. GRIEVANCES RAISED BY THE ASSESSING OFFICER , WHICH ARE BY WAY OF QUESTIONS THAT WE ARE REQUIRED TO A DJUDICATE, ARE AS FOLLOWS: 1. WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE CIT(A) HAS ERRED IN PASSING A NON - SPEAKING ORDER WHEREIN AVERMENTS OF THE ASSESSEE HAVE BEEN EXTRACTED SELECTIVELY TO HOLD THAT REVENUES HAVE TO BE ASSESSED U/S 44BB WIT HOUT ASCRIBING THE REASONING FOR ARRIVING AT THE ABOVE DECISION. 2. WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE CIT(A) HAS ERRED IN REFERRING TO THE DECISION OF THE ITAT IN THE CASE OF M/S CGG VERITAS IN HOLDING THAT THE INCOME OF THE ASSESSE E COMPANY WAS COVERED UNDER THE PROVISIONS OF SECTION 44BB IGNORING THAT THE SAID DECISION OF THE ITAT HAS NOT BEEN ACCEPTED BY THE DEPARTMENT AGAINST WHICH A MISCELLANEOUS PETITION HAS BEEN FILED. 3. WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE CASE, T HE CIT(A) HAS ERRED IN HOLDING THAT THE HIRE OF EQUIPMENT AND PERSONNEL WAS NOT IN THE NATURE OF FTS AND EQUIPMENT ROYALTY SQUARELY COVERED U/S 9(1)(VII) OF THE L.T. ACT, 1961. 4. WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE CIT(A) HAS ERRED I N HOLDING THAT THE INCOME OF THE ASSESSEE WAS TAXABLE UNDER THE PRESUMPTIVE PROVISIONS OF SECTION 44BB EVEN THOUGH THE NATURE OF SERVICES RENDERED BY THE ASSESSEE WERE TECHNICAL IN NATURE AND NOT FOR A PROJECT UNDERTAKEN BY THE ASSESSEE. 5. WHETHER ON TH E FACTS AND CIRCUMSTANCES OF THE CASE, THE CIT(A) HAS ERRED IN INTERPRETATION OF THE LEGISLATIVE INTENT BEHIND THE SCHEME OF TAXATION ENVISAGED IN 9(1)(VII) RW 44DA AND 44BB AND THE INSERTION OF SECOND PROVISO TO SUB - SECTION (1) OF SECTION 44DA AND A REFE RENCE TO SECTION 44DA IN THE PROVISO BELOW SUB - SECTION (1) OF SECTION 44BB. 6. WHETHER THE CIT(A) HAS ERRED IN NOT APPRECIATING THAT PROVISO TO SECTION 44BB IS NOT INSERTED PER MAJOREM CAUTELAM' BUT EXPLAINS AND CLARIFIES THE MAIN PROVISION AS THE TERM S ERVICES OR FACILITIES USED THEREIN ARE NOT DEFINED AND THE TWO TERMS USED ARE TOO GENERAL IN NATURE AND THUS ONCE THE PAYMENTS ARE CHARACTERIZED AS FTS U/S 9(1)(VII), THEY GO OUTSIDE THE PURVIEW OF SECTION 44BB AND HAVE TO BE TAXED AS FTS AT APPLICABLE FTS RATES AS PRESCRIBED UNDER THE ACT AND/OR DTAA. I.T.A. NO : 744, /DEL/13 AND CO NO. 7 3 /DEL/13 PAGE 3 OF 10 7. WHETHER THE CIT(A), HAS ERRED IN NOT APPRECIATING THAT ASSESSEES RELIANCE ON JINDAL DRILLING IS MISPLACED SINCE 44DA BEING THE SPECIAL PROVISION FOR TAXATION OF INCOME IN THE NATURE OF ROYALTIES AND FTS WHERE THESE ARE EFFECTIVELY CONNECTED WITH A PE, THEN IF A SPECIAL PROVISION IS MADE RESPECTING A CERTAIN MATTER T HAT MATTER IS EXCLUDED FROM THE GENERAL PROVISION UNDER THE RULE OF GENERALLIA SPECIALIBUS NON DEROGANT AND THUS, ITS RELIANCE ON JINDAL DR ILLING IS MISPLACED. 8. WHETHER THE CIT(A) HAS ERRED IN NOT APPRECIATING THAT THE DECISION OF DIRECTOR OF INCOME TAX V JINDAL DRILLING AND INDUSTRIES LTD. (2010) 320 ITR 104, PERTAINING TO AY. 2000 - 01, 2001 - 02 DOES NOT CONTAIN ANY REFERENCE TO SECTION 4 4DA AS THE SAID PROVISION CAME ON THE STATUTE W.E.F. 1.4.2004 AND THE RELIANCE THEREON IS THUS MISPLACED. 9. WHETHER THE CIT(A) HAS ERRED IN NOT APPRECIATING THAT HE DECISION OF JINDAL DRILLING & GEOFIZYKA TORUN HAS NOT ADJUDICATED THE ASPECT OF ELIGIBIL ITY IN TERMS OF SECOND LIMB OF THE EXCLUSIONARY PROVISO I.E. FOR A PROJECT UNDERTAKEN BY THE RECIPIENT AS CONFIRMED IN CGG VERITAS BASED ON DELHI HIGH COURT DECISION IN RIO TINTO. 10. WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE CIT(A) HAS E RRED IN HOLDING THAT THE INCOME OF THE ASSESSEE WAS TAXABLE UNDER THE PRESUMPTIVE PROVISIONS OF SEC 44BB AND IGNORING THE FACT THAT TAXABILITY ULS 44BB SHALL NOT APPLY IN RESPECT OF INCOME REFERRED TO IN SECTION 44DA IN VIEW OF THE CLARIFICATORY PROVISO TO SEC 44BB AND SEC 44DA. 11. WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE CIT(A) HAS ERRED IN APPRECIATING THE FACT THAT PROVISO TO SECTION 44DA BROUGHT ABOUT BY THE FINANCE ACT 2011 WAS ONLY CLARIFICATORY IN NATURE AND ITS APPLICATION HAS TO B E READ INTO THE MAIN PROVISIONS WITH EFFECT FROM THE TIME THE MAIN PROVISION CAME IN TO EFFECT IN VIEW OF THE DECISION OF THE HON'BLE SUPREME COURT IN THE CASE OF SEDCO FOREX INTERNATIONAL DRILLING VS. CIT. 12. WHETHER THE FACTS AND CIRCUMSTANCES OF THE CASE THE CIT(A) HAS ERRED IN HOLDING THAT INTEREST U/S 234B WAS NOT CHARGEABLE IN THIS CASE BY RELYING UPON THE DECISION OF HON'BLE UTTARAKHAND HIGH COURT IN THE CASE OF MAERSK (334 ITR 79) WHEREAS THE DEPARTMENT HAS CONTESTED THE ISSUE AND HAS FILED SLP B EFORE THE APEX COURT AGAINST IN THE CASE OF JACOBS CIVIL INCORPORATED/MITSUBISHI INVOLVING SIMILAR ISSUE. I.T.A. NO : 744, /DEL/13 AND CO NO. 7 3 /DEL/13 PAGE 4 OF 10 13. WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE CIT(A) HAS ERRED IN NOT APPRECIATING THE FINDING GIVEN BY THE AO WHO HAD HELD THAT THE F EE FOR TECHNICAL/SERVICE/ROYALTY RECEIVED BY THE ASSESSEE WHICH IS A NON - RESIDENT COMPANY WAS CORRECTLY ESTIMATED @ 25% OF GROSS RECEIPTS AS PER THE REQUIREMENTS OF RULE 10 OF THE INCOME TAX RULES, 1962 IN THE ABSENCE OF BOOKS OF ACCOUNTS AND TAXED ACCORDI NGLY. 4. AS A CAREFUL READING OF THE ABOVE RATHER DETAILED GROUNDS OF APPEAL WOULD SHOW, THE TWO SHORT ISSUES THAT WE ARE REALLY REQUIRED TO ADJUDICATE ON THIS APPEAL IS WHETHER OR NOT THE LEARNED CIT(A) WAS JUSTIFIED IN HOLDING THAT THE PROVISIONS OF SE CTION 44BB OF THE ACT, AND WHETHER OR NOT THE LEARNED CIT(A) WAS JUSTIFIED IN HOLDING THAT THE INTEREST UNDER SECTION 234B CANNOT BE LEVIED ON THE FACTS OF THIS CASE. AS FOR THE SECOND ISSUE, AS THE GROUND OF APPEAL NUMBER 12 CLEARLY ACCEPTS, THE ISSUE IS COVERED, IN FAVOUR OF THE ASSESSEE, BY A FULL BENCH DECISION OF HONBLE JURISDICTIONAL HIGH COURT IN THE CASE OF DIT VS MAERSK CO LTD [ (20111) 334 ITR 79 (UTTARAKHAND)] AND THE CIT(A) HAS MERELY FOLLOWED THE SAID DECISION, BUT YET THE ASSESSING OFFICER IS AGGRIEVED THAT, AS THIS DECISION HAS BEEN CHALLENGED IN APPEAL BEFORE HONBLE SUPREME COURT, THE CIT(A) OUGHT NOT TO HAVE FOLLOWED THE SAME. SUCH A PLEA CAN ONLY BE STATED AND REJECTED. THE MERE FACT THAT A BINDING JUDICIAL PRECEDENT HAS BEEN CHALLENGED B EFORE A HIGHER FORUM DOES NOT DILUTE, CURTAIL OR OTHERWISE AFFECT ITS BINDING NATURE. ONCE HONBLE JURISDICTIONAL HIGH COURT HAS EXPRESSED A CONSIDERED VIEW ON AN ISSUE, ALL THE LOWER AUTHORITIES IN THE JUDICIAL HIERARCHY, INCLUDING THIS TRIBUNAL AS INDEED THE CIT(A), HAVE TO LOYALLY FOLLOW THIS. THERE IS NO SCOPE FOR DEVIATING FROM THIS SOLEMN DUTY. ON THIS ASPECT OF THE MATTER, THUS, THE STAND OF THE CIT(A) CANNOT BE FAULTED. AS FOR THE FIRST ISSUE, I.E. WHETHER THE PROVISIONS OF SECTION 44BB WILL APPLY T O THE FACTS OR WHETHER SECTION 44DA WILL BE APPLICABLE ON THE FACTS OF THIS CASE, WE WILL HAVE TO DEAL WITH THE MATTER IN A LITTLE MORE DETAIL. 5 . TO ADJUDICATE ON THIS GRIEVANCE , ONLY A FEW MATERIAL FACTS NEED TO BE TAKEN NOTE OF. THE ASSESSEE BEFORE US IS A NON - RESIDENT COMPANY, AND, AS IT APPEARS I.T.A. NO : 744, /DEL/13 AND CO NO. 7 3 /DEL/13 PAGE 5 OF 10 FROM THE DETAILS FURNISHED IN THE RETURN OF INCOME, I T HAS AN OFFICE AT MIDAS SAHAR PLAZA, KONDIVITA, ANDHERI (EAST), MUMBAI. DURING THE RELEVANT FINANCIAL PERIOD, THE ASSESSEE HAS EARNED REVENUES OF RS 68,24,7 0,607 FROM THE FOLLOWING CONTRACTS: 1. CONTRACT NO. : 2001/KGD6L - E2 - DR - G - 170 - MB WITH RELIANCE INDUSTRIES LIMITED FOR PROVISION OF DKD UNIT AND FILTRATION UNIT. 2. CONTRACT NO. : 2001/GENL/E1 - DR - O - 60MAC WITH RELIANCE INDUSTRIES LIMITED FOR PROVISION OF M UD SERVICES AND DRILLING UNIT. 3. CONTRACT NO. : OG3/3136992 WITH RELIANCE INDUSTRIES L IMITED . 4. CONTRACT NO. : 2001/GENL/E1 - DR - O - 270 - MAC WITH RELIANCE INDUSTRIES LIMITED FOR DOWN HOLE MUD MOTORS FOR DRILLING, DIRECTIONAL DRILLING AND SIDE TRACK PACKA GE. 5. CONTRACT NO. : 2001/GENL/E1 - DR - O - 63E - MAC WITH RELIANCE INDUSTRIES LIMITED FOR PROVISION OF DMM, DIRECTIONAL DRILLING AND SIDETRACK PACKAGE. 6. CONTRACT NO. : SU4C0438 WITH NIKO RESOURCES. 7. CONTRACT NO. : HAZ - 34232 WITH NIKO RESOURCES. 8. C ONTRACT NO. : 2003/B/G/D/597 WITH BG EXPLORATION & PRODUCTION INDIA LIMITED FOR EXTENDED REACH DRILLING IN TAPTI AND PANNA AREAS FEASIBILITY STUDY. 9. CONTRACT NO. : RJ2CB5001 WITH CAIRN ENERGY INDIA PTY LIMITED FOR PROVISION OF MUD CHEMICALS, TECHN ICAL SERVICES AND LABORATORY EQUIPMENTS. 10. CONTRACT NO. : RJCB5028 WITH CAIRN ENERGY INDIA PTY LIMITED FOR PROVISION OF DIRECTIONAL DRILLING SERVICES. 11. CONTRACT NO. : KG4CA000011A WITH CAIRN ENERGY INDIA PTY LIMITED FOR PROVISION OF DIRECTIONA L/MWD/LWD SERVICES. I.T.A. NO : 744, /DEL/13 AND CO NO. 7 3 /DEL/13 PAGE 6 OF 10 12. CONTRACT NO. : CBCA000013A WITH CAIRN ENERGY INDIA PTY LIMITED FOR PROVISION OF DIRECTIONAL/MWD/LWD EQUIPMENT SERVICES. 13. CONTRACT NO. : CB3CA000016A WITH CAIRN ENERGY INDIA PTY LIMITED FOR WIRELINE LOGGING AND TCP SERVICE S. 14. CONTRACT NO. : CB3A000017A WITH CAIRN ENERGY INDIA PTY LIMITED FOR VSP EQUIPMENT & SERVICES. 5. THERE IS NO DISPUTE THAT THE INCOME EARNED BY THE ASSESSEE IS FROM HIRING OF EQUIPMENT AND FROM RENDERING OF SERVICES TO THE ENTITIES ENGAGED IN OIL EXPLORATION WORK. THERE IS ALSO NO DISPUTE THAT T HE INCOME SO EARNED BY THE ASSESSEE WAS OFFERED BY THE ASSESSEE TO TAX, ON PRESUMPTIVE PROFITS @ 10 % UNDER SECTION 44BB OF THE ACT. THE POINT OF DISPUTE IS CONFINED TO WHETHER OR NOT THE PROVISIONS OF S ECTION 44BB WILL APPLY TO THE FACTS OF THIS CASE. WHILE CONTENTION OF THE ASSESSEE IS THAT THE PROVISIONS OF SECTION 44 BB FOR TAXABILITY OF INCOME ON PRESUMPTIVE BASIS @ 10% WILL APPLY TO THE TAXABILITY OF INCOME SO EARNED BY THE ASSESSEE, THE ASSESSING O FFICER HAS HELD THAT THE INCOME FROM RENDERING OF THESE SERVICES IN INDIA, THROUGH A PE - AS HAS BEEN CLAIMED TO BE THE FACT SITUATION, WILL BE TAXABLE AS NORMAL BUSINESS INCOME IN INDIA, AS IS MANDATED BY SECTION 44 DA OF THE ACT, WHICH, IN THE ABSENCE OF ANY BOOKS OF ACCOUNTS, HAS BEEN ESTIMATED AT 25% OF GROSS RECEIPTS. THE CIT(A) HAS , FOLLOWING THE DECISION OF A COORDINATE BENCH IN THE CASE OF CGG VERITAS (ITA NO. 4653/DEL/2010; ORDER DATED 25 TH JANUARY 2012) AND NOTING THAT THE ASSESSEE HAS A PE IN IND IA AND THAT THE CASE PERTAINS TO ASSESSMENT YEAR PRIOR TO 2011 - 12), UPHELD THE CONTENTION OF THE ASSESSEE , AND HAS, ACCORDINGLY, HELD THAT THE INCOME IS LIABLE TO TAX@ 10% UNDER SECTION 44 BB OF THE ACT , AND, AGGRIEVED BY THE STAND SO TAKEN BY THE CIT(A), THE ASSESSING OFFICER IS IN APPEAL BEFORE US. . 6. WE HAVE HEARD THE RIVAL CONTENTIONS AT CONSIDERABLE LENGTH, PERUSED THE MATERIAL ON RECORD AND DULY CONSIDERED FACTS OF THE CASE IN THE LIGHT OF THE APPLICABLE LEGAL POSITION. I.T.A. NO : 744, /DEL/13 AND CO NO. 7 3 /DEL/13 PAGE 7 OF 10 7. LEARNED COMMISSIONER ( DR) HAS, EVEN WHILE ACCEPTING THAT THE SAME ISSUE CAME UP FOR CONSIDERATION BEFORE COORDINATE BENCHES IN THE CASES OF BAKER HUGHES ASIA PACIFIC & ORS VS ADIT [34 ITR (TRIB) 192] AND BAKER HUGHES ASIA PACIFIC LIMITED VS ADIT (ITA NO. 6476/DEL/12; ORDER DATE D 5 TH SEPTEMBER 2014) AND THIS ISSUE WAS DECIDED IN FAVOUR OF THE ASSESSE, CONTENDED THAT NO CASE CAN BE HELD TO BE COVERED, STANDING AS IT DOES ON OWN FACTS WHICH ARE DISTINGUISHABLE. SHE HAS ELABORATE ARGUMENTS IN SUPPORT OF THE STAND OF THE ASSESSING OFFICER AND URGED US TO TAKE AN INDEPENDENT VIEW OF THE MATTER. HER LINE OF REASONING, IN BROAD TERMS, IS LIKE THIS. IT IS POINTED OUT THAT THE PAYMENTS FOR USE AND HIRE OF EQUIPMENT AND PERSONNEL IS EQUIPMENT ROYALTY/ FEES FOR TECHNICAL SERVICES, AND THA T THE INCOME BEING IN NATURE OF ROYALTY/ FTS, AND NOT FOR A PROJECT UNDERTAKEN BY THE APPELLANT, IS NOT ELIGIBLE FOR BENEFIT OF SECTION 44BB AS IT WOULD BE CONTRARY TO THE DECISIONS OF HONBLE JURISDICTIONAL HIGH COURT IN THE CASES OF FOAMER FRANCE AND RO LLS ROYCE . IT IS CONTENDED THAT THE PROVISIONS OF SECTION 44DDA, AS IN FORCE WITH EFFECT FROM 1 ST APRIL 2011, ARE CLARIFICATORY IN NATURE AND HAVE TO BE READ INTO THE PROVISIONS OF THE ACT. ITS HER CONTENTION THAT THE PROVISIONS OF SECTION 44BB ARE MEANT F OR THE FIRST LEG CONTRACTORS ENGAGED IN PROSPECTING, EXTRACTING AND PRODUCING MINERAL OILS, AND THAT THE BENEFIT OF THESE PROVISIONS CANNOT BE EXTENDED TO THE VENDORS AND SUPPLIERS OF SUCH FIRST LEG CONTRACTORS. IT IS SUBMITTED THAT DOING SO WOULD AMOUNT T O BASE EROSION AND PROFIT SHIFTING FROM DEVELOPING COUNTRIES. A REFERENCE IS THEN MADE HEYDONS RULE AND SUBMITTED THAT THE AMENDMENTS IN THE SCHEME OF SECTION 44BB AND 44DA, VIDE FINANCE ACT 2010, THOUGH STATED TO BE EFFECTIVE FROM ASSESSMENT YEAR 2011 - 12 MUST BE TREATED AS CLARIFICATORY IN NATURE. A REFERENCE IS MADE TO THE DECISION OF HONBLE SUPREME COURT, IN THE CASE OF UNION OF INDIA VS GOSALIA SHIPPING PVT LTD (113 ITR 307) FOR THE PROPOSITION THAT WHEN PAYMENT IS MADE TO A SHIPPING COMPANY FOR TIME CHARTER, ITS PAYMENT FOR HIRE OF SHIPMENT AND NOT FOR THE PURPOSE OF CARRYING GOODS, AND BY THE SAME LOGIC, WHEN PAYMENT IS MADE BY THE FIRST LEG CONTRACTOR TO THE SUPPLIER OF EQUIPMENT OR PERSONNEL, THE PAYMENT IS FOR SUCH EQUIPMENT OR PERSONNEL AND NOT F OR THE PURPOSES IN WHICH THE EQUIPMENT OR PERSONNEL ARE PUT I.T.A. NO : 744, /DEL/13 AND CO NO. 7 3 /DEL/13 PAGE 8 OF 10 TO USE. IT IS THEN SUBMITTED THAT THE DECISION OF PGS GEOPHYSICAL AS VS ADIT (269 CTR 433) CONTRADICTS THE FINDINGS IN THE EARLIER HONBLE DELHI HIGH COURT DECISION IN THE CASE OF DIT VS OHM LT D (352 ITR 406), BASED ON WHICH THE COORDINATE BENCH HAS DECIDED THIS ISSUE IN FAVOUR OF THE ASSESSE. IT IS SUBMITTED THAT THE DECISION OF THE COORDINATE BENCH IN THE CASE OF BAKER HUGHES ASIA PACIFIC LTD (SUPRA), BY WHICH THIS ISSUE IN APPEAL IS STATED TO BE COVERED IN FAVOUR OF THE ASSESSE, DID NOT TAKE ACCOUNT THE BINDING JUDICIAL PRECEDENTS IN THE CASES OF PGS GEOPHYSICAL (SUPRA) AND GOSALIA SHIPPING (SUPRA) AS ALSO MANY OTHER RELEVANT DECISIONS, WE SHOULD NOT BE GUIDED BY THE SAME. 8. LEARNED COUNSEL FOR THE ASSESSEE, ON THE OTHER HAND, SUBMITS THAT AS THE ISSUE IS SQUARELY COVERED IN FAVOUR OF THE ASSESSEE BY DECISIONS OF THE COORDINATE BENCHES AND THESE DECISIONS ARE NOT YET OVERTURNED BY THE HONBLE COURTS ABOVE, THERE IS NO OCCASION TO DEVIATE FRO M THE SAME. WE ARE THUS URGED TO CONFIRM THE FINDINGS OF THE CIT(A) AND DECLINE TO INTERFERE IN THE MATTER. 9. WE HAVE NOTED THAT THE ISSUE IS DIRECTLY COVERED BY THE DECISIONS OF THE COORDINATE BENCHES AND THERE ARE NO DIRECT DECISIONS ON THE ISSUE BY A NY HIGHER FORUMS. THE METICULOUS RESEARCH DONE BY THE LEARNED COMMISSIONER (DR), AS ALSO HER ERUDITE ARGUMENTS, ARE OF NOT OF ANY PRACTICAL EFFECT AT THIS STAGE. AS FOR THE BEPS CONSIDERATIONS, AS SO STRENUOUSLY ARGUED BY THE LEARNED COUNSEL, BASE EROSION AND PROFIT SHIFTING IS A TAX POLICY CONSIDERATION WHICH IS RELEVANT FOR THE PROCESS OF LAW MAKING, BUT IT CANNOT HAVE A ROLE IN THE JUDICIAL DECISION MAKING PROCESS BECAUSE JUDICIAL PROCESS WILL INFRINGE NEUTRALITY IF IT IS TO BE SWAYED BY SUCH POLICY CON SIDERATION. THE JUDICIAL NEUTRALITY MUST NOT ONLY BE NEUTRAL VIS - - VIS THE PARTY BUT ALSO VALUE NEUTRAL VIS - - VIS COMPETING IDEOLOGIES. JUDICIAL AUTHORITIES ARE TO INTERPRET THE LAW AS IT EXISTS AND NOT AS IT OUGHT TO BE IN THE LIGHT OF CERTAIN UNDERLYING VALUE NOTIONS. AS FOR THE LEGAL ARGUMENTS ADVANCED BY THE LEARNED COMMISSIONER (DR), A S WAS LAID DOWN BY HONBLE SUPREME COURT IN THE CASE OF AMBIKA PRASAD MISHRA VS. STATE OF UP AIR 1980 SC 1762 : (1980) 3 SC C I.T.A. NO : 744, /DEL/13 AND CO NO. 7 3 /DEL/13 PAGE 9 OF 10 719 (P. 1764 OF AIR 1980 SC), EVERY NEW DIS COVERY NOR ARGUMENTATIVE NOVELTY CANNOT UNDO OR COMPEL RECONSIDERATION OF A BINDING PREC EDENT... A DECISION DOES NOT LO SE ITS AUTHORITY MERELY BECAUSE IT WAS BADLY ARGUED, INADEQUATELY CONSIDERED OR FALLACIOUSLY REASONED....' . SIMILARLY, IN THE CASE OF KES HO RAM & CO. VS. UNION OF INDIA (198 9) 3 SCC 151, HONBLE SUPREME COURT HAD OBSERVED THAT (T) HE BINDING EFFECT OF A DECISION OF THIS COURT DOES NOT DEPEND UPON WHETHER A PARTICULAR ARGUMENT WAS CONSIDERED OR NOT, PROVIDED THE POINT WITH THE REFERENCE TO WHICH THE ARGUMENT IS ADVANCED SUBSEQUENTLY WAS ACTUALLY DECIDED IN THE EARLIER DECISION.....' IN VIEW OF THESE DISCUSSIONS, WE SEE NO REASON TO TAKE ANY OTHER VIEW OF THE MATTER THAN THE VIEW TAKEN BY THE COORDINATE BENCHES AND RESPECTFULLY FOLLOWING THE VIEWS OF THE COORDINATE BENCH, WE APPROVE THE CONCLUSIONS ARRIVED AT BY THE LEARNED CIT (A) AND DECLINE TO INTERFERE IN THE MATTER. 10. AS FOR THE LEVY OF INTEREST UNDER SECTION 234 B, AS WE HAVE ALREADY NOTED, THE ISSUE IS COVERED IN FAVOUR OF THE ASSES SEE, BY A FULL BENCH DECISION OF HONBLE JURISDICTIONAL HIGH COURT. ON BOTH THE ISSUES IN THE APPEAL, THUS, WE CONFIRM THE STAND OF THE CIT(A) AND DECLINE TO INTERFERE IN THE MATTER. 11. IN THE RESULT, THE APPEAL FILED BY THE ASSESSING OFFICER IS DISMISS ED. 12. AS REGARDS THE CROSS OBJECTION FILED BY THE ASSESSEE, THE ONLY GRIEVANCE PRESSED BEFORE US IS THAT THE CIT(A) ERRED IN UPHOLDING THE STAND OF THE AO THAT UNPAID INVOICES OF THE AMOUNTS AGGREGATING TO RS 22,01,552 WOULD BE INCLUDIBLE IN THE GROSS R EVENUES FOR THE PURPOSES OF COMPUTING PRESUMPTIVE INCOME UNDER SECTION 44BB OF THE ACT. 13. AS FAR AS THIS ASPECT OF THE MATTER IS CONCERNED, WE HAVE NOTED THAT THERE ARE NO FACTUAL FINDINGS IN RESPECT OF THE SAME BY ANY OF THE AUTHORITIES BELOW. IN THI S VIEW OF THE MATTER, THE MATTER IS RESTORED TO THE FILE OF THE ASSESSING OFFICER I.T.A. NO : 744, /DEL/13 AND CO NO. 7 3 /DEL/13 PAGE 10 OF 10 FOR EXAMINING PLEA OF THE ASSESSEE AND DECIDING THE SAME IN ACCORDANCE WITH THE LAW. WE DIRECT SO. 14. IN THE RESULT, THE CO IS ALLOWED FOR STATISTICAL PURPOSES. 15. TO SUM UP, WHILE THE APPEAL OF THE ASSESSING OFFICER IS DISMISSED, THE CROSS OBJECTION FILED BY THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. PRONOUNCED I N THE OPEN COURT TODAY ON 20 TH DAY OF APRIL, 2015. SD/XX SD/XX C M GARG PRAMOD KUMAR (JUDICIAL MEMBER) (ACCOUNTANT MEMBER) NEW DELHI, THE 20 TH DAY OF APRIL , 201 5 COPIES TO: (1) THE APPELLANT (2) THE RESPONDENT (3) COMMISSIONER (4) CIT(A) (5) DEPARTMENTAL REPRESENTATIVE ( 6) GUARD FILE BY ORDER ETC ASSISTANT REGISTRAR INCOME TAX APPELLATE TRIBUNAL DELHI BENCHES, NEW DELHI