ROSOBORON SERVICE (INDIA) LTD, NAVI MUMBAI V. ITO CIR 10(3)(4), MUMBAI

ITA 2039/MUM/2012

• Counselvise Citation: [2015] 120 COUNSELVISE.COM (IT) 9289 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 11 month(s) 14 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-03-2015
• Appeal Filed By: Assessee
• Bench Allotted: D
• Next Hearing Date: 16-02-2015
• Assessment Year: 2009-2010
• Appeal Filed On: 28-03-2012
• Court: TRIBUNAL
• Department Lawyers: AKHILENDRA YADAV
• Assessee Lawyers: SANJAY S RANE
• Keywords: Opportunity of being heard; Additional evidence

Judgement Text

D IN THE INCOME TAX APPELLATE TRIBUNAL D BENCH, MUMBAI . , . , BEFORE SHRI D. MANMOHAN , VICE PRESIDENT AND SHRI D. KARUNAKARA RAO, AM ./I.T.A. NO. 2039/M/2012 (AY:2009 - 2010) M/S. ROSOBORONSERVICE (INDIA) LTD., PLOT NO.R - 700, TTC INDUSTRIAL AREA, MIDC REBALE, POST: GHANSOLI, NAVI MUMBAI 400 701. VS. THE INCOME TAX OFFICER, CIRCLE 10(3)(4), MUMBAI. ./ PAN : AADCR0040B ( / APPELLANT) .. ( / RESPONDENT ) / APPELLANT BY : SHRI SANJAY S. RANE, AR / RESPONDENT BY : SHRI AKHILENDRA YADAV, DR / DATE OF HEARING : 24.2.2015 / DATE OF PRONOUNCEMENT : 11 .3.2015 / O R D E R PER D. KARUNAKARA RAO, AM: THIS APPEAL FILED BY THE ASSESSEE ON 28.3.2012 IS AGAINST THE ORDER OF THE CIT (A) - 22, MUMBAI DATED 7.3.2012 FOR THE ASSESSMENT YEAR 2009 - 2010. IN THIS APPEAL, ASSESSEE RAISED THE FOLLOWING GROUNDS WHICH READ AS UNDER: 1. A) ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD CIT (A) HAS ERRED IN UPHOLDING THE DISALLOWANCE OF RS. 42,00,000/ - MADE IN THE ASSESSMENT ORDER. HE OUGHT NOT TO HAVE DONE SO. B) ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD CIT (A) IS NOT JUSTIFIED IN HOLDING THAT THE PAYMENT FALLS UNDER THE PROVISIONS OF SECTION 194J OF THE ACT I.E., FEES FOR PROFESSIONAL OR TECHNICA L SERVICES ON WHICH TDS IS REQUIRED TO BE MADE. HE OUGHT NOT TO HAVE DONE SO. C) ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, WITHOUT PREJUDICE TO THE ABOVE, THE LD CIT (A) HAS ERRED IN RECOGNIZING THE FACT THAT INCOME OF THE RECIPIENT/(S ) IS CHARGEABLE UNDER THE HEAD SALARIES AND NOT AS FEES FOR TECHNICAL SERVICES AS PER EXPLANATION 2 TO CLAUSE (VII) OF SECTION 9(1) OF THE INCOME TAX ACT, 1961. HE OUGHT NOT TO HAVE DONE SO. 2. A) ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD CIT (A) HAS ERRED IN UPHOLDING THE DISALLOWANCE OF RS. 55,80,641/ - MADE IN THE ASSESSMENT ORDER. HE OUGHT NOT TO HAVE DONE SO. B) ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD CIT (A) HAS ERRED IN STATING THAT, BY THI S METHOD, IT HAS MADE AN ATTEMPT TO SUPPRESSED TAXABLE PROFIT. WITHOUT PREJUDICE TO ABOVE IN 3(A), THE LD CIT (A) 2 ERRED IN NOT RECOGNIZING THE FACT THAT OUT OF TOTAL EXCHANGE FLUCTUATION LOSS, LOSS OF RS. 30,61,269/ - IS REALIZED DURING THE YEAR ON SETTLEM ENT OF IMPORT INVOICES OF THE YEAR. HE OUGHT NOT TO HAVE DONE SO. C) ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD CIT (A) HAS ERRED IN RECOGNIZING THE FACT THAT THERE IS NO PROVISION IN THE ACT, WHICH PROHIBITS DEDUCTION OF LOSS ON FOREIGN EXCHANGE FLUCTUATIONS EXCEPT UNDER SECTION 43A WHICH DEALS WITH TREATMENT OF EXCHANGE DIFFERENCES ON ACQUISITION OF ASSET FROM A COUNTRY OUTSIDE INDIA. HE OUGHT NOT TO HAVE DONE. 3. BRINGING OUR ATTENTION TO THE ABOVE MENTIONED GROUNDS, LD COU NSEL FOR THE ASSESSEE MENTIONED THAT THE ASSESSING OFFICER MADE COUPLE OF ADDITIONS ON ACCOUNTS OF (I) SALARY PAID OUTSIDE INDIA TO FOREIGN DIRECTORS AMOUNTING TO RS. 42,00,000/ - AND (II) DISALLOWANCE ON ACCOUNT OF FOREIGN EXCHANGE FLUCTUATION LOSS OF RS.5 5,80,641/ - . AT THE OUTSET, LD COUNSEL FOR THE ASSESSEE BROUGHT OUR ATTENTION TO THE PAPER BOOK AND THE APPLICATION FOR SUBMISSION OF THE ADDITIONAL EVIDENCES / DOCUMENTS. IN ITS LETTER DATED 23.12.2013, ASSESSEE SUBMITTED THAT THE ADDITIONAL EVIDENCES PE RTAINING TO BOTH THE ADDITIONS REFERRED ABOVE ARE REQUIRED TO BE ADMITTED . HE ALSO DEMONSTRATED THE REASONS FOR FAILURE TO FURNISH THE SAME BEFORE THE LOWER AUTHORITIES. BEFORE US, LD COUNSEL FOR THE ASSESSEE PLEADED FOR ADMITTING THE SAID ADDITIONAL EVI DENCES AND REQUESTED FOR REMANDING THE SAME TO THE FILE OF THE ASSESSING OFFICER. 4. AFTER HEAR ING BOTH THE PARTIES AND PERUSAL OF THE ORDERS OF THE REVENUE AUTHORITIES AS WELL AS THE RELEVANT MATERIAL FILED BEFORE US , WE FIND THE ADMITTING OF THE ADDITI ONAL EVIDENCE IS IN THE INTEREST OF JUSTICE. ON PERUSAL OF THE SAID ADDITIONAL EVIDENCES / DOCUMENTS PLACED BEFORE US, CONSIDERING THE IMPORTANCE OF THE SAID DOCUMENTS , WE FIND IT RELEVANT TO ADMIT THE SAME. ACCORDINGLY, WE ADMIT THE ADDITIONAL EVIDENCES / DOCUMENTS FILED BY THE ASSESSEE AND REMAND THEM TO THE FILE OF THE ASSESSING OFFICER . ASSESSING OFFICER SHALL CONSIDER THE SAME AND DECIDE THE ISSUE AFRESH AFTER AFFORDING A REASONABLE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. ACCORDINGLY, GROUNDS R AISED BY THE ASSESSEE ARE ALLOWED FOR STATISTICAL PURPOSES. 5. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRO NOUNCED IN THE OPEN COURT ON 1 1 T H MARCH, 2015. S D / - S D / - (D. MANMOHAN) (D . KARUNAKARA RAO) / VICE PRESIDENT / ACCOUNTANT MEMBER MUMBAI ; 11/3/2015 3 . . ./ OKK , SR. PS / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. ( ) / THE CIT(A) - 4. / CIT 5. , , / DR, ITAT, MUMBAI 6. / GUARD FILE . //TRUE COPY// / BY ORDER, / (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI