DCIT, Hyderabad V. M/s Priyasdarshini spnning Mills Ltd., Hyderabad

ITA 1065/HYD/2008

• Counselvise Citation: [2010] 119 COUNSELVISE.COM (IT) 5954 (ITAT-HYDERABAD)
• Duration Of Justice: 1 year(s) 8 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 10-02-2010
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 10-02-2010
• Assessment Year: 2004-2005
• Appeal Filed On: 03-06-2008
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: E S NAGENDRA PRASAD
• Keywords: Opportunity of being heard

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCH B, HYDERABAD BEFORE SHRI G.C. GUPTA, VICE PRESIDENTAND SHRI AKBER BASHA, ACCOUNTANT MEMBER ITA NO.550/HYD/06 : ASSTT. YEAR 2002-03 ITA 373/HYD/07 ASST. YEAR 2000-01 ITA 374/HYD/07 AND ASST. YE AR 2003-04 ITA 1065/HYD/08 ASST. YEAR 2004-05 DCIT, CIR-16(3), HYDERABAD. (APPELLANT) VS M/S. PRIYADARSHINI SPINNING MILLS LTD., HYDERABAD. (PAN: AABCP2284K) (RESPONDENT) APPELLANT BY : SRI E.S. NAGENDRA PRASAD RESPONDENT BY : NONE O R D E R PER AKBER BASHA, ACCOUNTANT MEMBER THESE FOUR APPEALS PREFERRED BY THE REVENUE IS DIRECT ED AGAINST SEPARATE ORDERS PASSED BY THE LEARNED CIT (A) -V, HYDERABAD FOR THE ASSESSMENT YEARS 2000-01, 2002-03 TO 2004-05. S INCE COMMON ISSUES ARE INVOLVED, THESE ARE HEARD TOGETHER AND DISPOS ED OFF BY THIS COMBINED ORDER FOR THE SAKE OF CONVENIENCE. 2. DESPITE NOTICE, THERE WAS NO APPEARANCE ON BEHALF OF THE ASSESSEE-RESPONDENT DURING THE COURSE OF HEARING OF THESE APPEALS. 2 HENCE, WE HAVE DECIDED THESE MATTERS EX PARTE ON MERITS, AFTER HEARING THE LEARNED DR. 3. THE LEARNED DR SUBMITTED THAT VIDE PARA-4 OF THE TRIBUNAL ORDER DATED 27TH JUNE, 2008 IN THE CASE OF THE SAME ASSESSEE, TH E TRIBUNAL RESTORED THE MATTER TO THE ASSESSING OFFICER FOR EXAMINI NG THE ISSUE AFTER CONSIDERING ALL THE CONTENTIONS OF THE ASSESSEE IN TH E LIGHT OF THE APEX COURT IN THE CASE OF OGALE GLASS WORKS LTD. (1954) 25 ITR 529. IN VIEW OF THE ABOVE, THE LEARNED DR ARGUED THAT THIS M ATTER IS ALSO TO BE RESTORED TO THE FILE OF THE ASSESSING OFFICER FOR RECONSIDE RATION IN ACCORDANCE WITH LAW. 4. WE HAVE GONE THE ORDERS OF THE AUTHORITIES BELOW A ND HEARD THE SUBMISSIONS OF THE LEARNED DR. THE TRIBUNAL IN THE ASSESS EE'S OWN CASE VIDE PARA-4 OF ITS ORDER DATED 27TH JUNE, 2008 (SUP RA) HELD AS FOLLOWS:- '4. WE HAVE CONSIDERED THE SUBMISSION OF THE LEARNED DR AND ALSO PERUSED THE MATERIAL AVAILABLE ON RECORD. ADM ITTEDLY, THE PAYMENTS WERE MADE BY DEMAND DRAFTS DRAWN ON SB H AND SBI AT HYDERABAD. THE DEMAND DRAFTS WERE SENT THROUGH COURIER. THE CIT (A), AFTER FOLLOWING HIS EARLIER ORDER IN THE CASE OF NEULAND LABORATORIES LTD., ALL OWED THE APPEAL OF THE ASSESSEE ON THE GROUND THAT THE PAYME NT MADE TO FOREIGN AGENTS IS NOT TAXABLE IN INDIA. T HE CIT (A) HAS NOT TAKEN ANY PAINS TO EXAMINE THE AGREEMEN T BETWEEN THE PARTIES AND TO FIND OUT WHETHER THE DEM AND DRAFTS WERE TAKEN AT THE REQUEST OF THE FOREIGN AGE NTS. NOW, IT IS WELL SETTLED PRINCIPLE OF LAW THAT IF T HE DEMAND DRAFTS WERE TAKEN IN INDIA AT THE REQUEST OF THE FO REIGN AGENT, THEN THE PAYMENT HAS TO BE CONSTRUED AS MADE IN INDIA IN VIEW OF THE JUDGMENT OF THE APEX COURT IN THE CASE OF OGALE GLASS WORKS LTD. (1954) 25 ITR 529. HOWEV ER, WE HAVE TO FIND OUT THE SAME AFTER EXAMINING THE AGREEMENT, IF ANY, BETWEEN THE PARTIES HAS TO BE EX AMINED IN SENDING THE MONEY FROM HYDERABAD BY WAY OF DEMAN D DRAFTS. IF FOR ANY REASON THE FOREIGN AGENTS REQUES TED THE 3 ASSESSEE TO PAY BY DEMAND DRAFTS DRAWN ON SBH AND S BI AT HYDERABAD BY POSTAL/COURIER AGENCY AT HYDERABAD, TH EN, AS HELD BY THE APEX COURT, THE PAYMENT HAS TO BE CONSTRUED AS MADE IN INDIA AND, THEREFORE, TAXABLE IN INDIA. SINCE THESE ASPECTS WERE NOT EXAMINED EITHE R BY THE ASSESSING OFFICER OR BY THE CIT(A), IN OUR OPIN ION, THE MATTER HAS TO BE RECONSIDERED BY THE ASSESSING OFFI CER. IN RESPECT OF THE PAYMENT OF COMMISSION, EACH CASE DEP ENDS UPON ITS OWN FACTS. THE REVENUE AUTHORITIES ARE EX PECTED TO EXAMINE THE AGREEMENT ENTERED INTO IN EACH CASE AND THE INTENTION OF THE PARTIES IN MAKING THE PAYMENT AND THEREAFTER RECORD AN INDEPENDENT CONCLUSION AS TO W HETHER THE PAYMENT WAS MADE IN INDIA AT THE REQUEST OF THE FOREIGN AGENT. SINCE SUCH EXERCISE WAS NOT DONE IN THIS CASE, WE RESTORE THE MATTER TO THE FILE OF THE ASSE SSING OFFICER . THE ASSESSING OFFICER SHALL EXAMINE THE ISSUE AFTER CONSIDERING ALL THE CONTENTIONS OF THE ASSESSEE IN THE LIGHT OF THE APEX COURT IN THE CASE OF OGALE GLASS WORKS LTD. (SUPRA), AND THEREAFTER DECIDE THE ISSUE IN ACCORDA NCE WITH LAW, AFTER GIVING REASONABLE OPPORTUNITY TO THE ASS ESSEE.' RESPECTFULLY FOLLOWING THE ABOVE, WE RESTORE THE MATTE R TO THE FILE OF ASSESSING OFFICER WHO SHALL EXAMINE THE ISSUE IN ACCORDANCE W ITH LAW IN THE LIGHT OF THE APEX COURT DECISION (SUPRA), AFTER AF FORDING A REASONABLE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. 5. IN THE RESULT, ALL THE APPEALS BY THE REVENUE ARE TREATED AS ALLOWED FOR STATISTICAL PURPOSES. ORDER WAS PRONOUNCED IN THE OPEN COURT ON 10-2-2010 SD/- (G.C. GUPTA) SD/- (AKBER BASHA) VICE PRESIDENT ACCOUNTANT MEMBER. DT/- 10TH FEB. 2010. 4 COPY FORWARDED TO: 1. M/S. PRIYADARSHINI SPINNING MILLS LIMITED, 208, NIL GIRI BLOCK, ADITYA ENCLAVE, AMEERPET, HYDERABAD. 2. DCIT, CIR-16(3), 3RD FLOOR, AAYAKAR BHAVAN, HYDER ABAD. 3. CIT, AP, HYDERABAD. 4. CIT (A) V , HYDERABAD. 5. THE D.R., ITAT, HYDERABAD. JMR