The ADIT.,(Intl.Taxn.), Ahmedabad V. Adani Enterprises Ltd., Ahmedabad

ITA 3046/AHD/2010

• Counselvise Citation: [2013] 140 COUNSELVISE.COM (IT) 68068 (ITAT-AHMEDABAD)
• Duration Of Justice: 3 year(s) 1 month(s) 8 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-12-2013
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 28-11-2013
• Assessment Year: 2010-2011
• Appeal Filed On: 10-11-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ILA VARSHI
• Assessee Lawyers: V R CHOKSHI
• Keywords: Deemed to accrue or arise in india
• Section: 5(2); 2

Judgement Text

, , , , , , , , IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD BENCH A BENCH, AHMEDABAD .., ! ! ! ! ' #$, BEFORE SHRI N.S. SAINI, ACCOUNTANT MEMBER AND SHRI KUL BHARAT, JUDICIAL MEMBER !./ I.T.A. NO.3046/AHD/2010 ( & '& & '& & '& & '& / / / / ASSESSMENT YEAR : 2010-11) THE ADIT (INTL.TAXN.) AHMEDABAD / VS. ADANI ENTERPRISES LTD. ADANI HOUSE NR.MITHAKHALI SIX CROSS RD OFF.ASHRAM ROAD AHMEDABAD ( !./)* !./ PAN/GIR NO. : AABCA 2804 L ( (+ / // / APPELLANT ) .. ( ,-(+ / RESPONDENT ) (+ . / APPELLANT BY : MS.ILA VARSHI, SR.DR ,-(+ / . / RESPONDENT BY : SHRI V.R.CHOKSHI, A.R. ' 0 / $1 / / / / DATE OF HEARING : 28/11/2013 23' / $1 / DATE OF PRONOUNCEMENT : 19/12/2013 4 / O R D E R PER SHRI KUL BHARAT, JUDICIAL MEMBER : THIS APPEAL BY THE REVENUE IS DIRECTED AGAINST TH E ORDER OF THE LD.COMMISSIONER OF INCOME TAX(APPEALS)-GANDHINAGAR (CIT(A) FOR SHORT) DATED 31/08/2010 PERTAINING TO ASSESSMENT YEAR (AY) 2010-11. THE REVENUE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL:- 1. THE LD.CIT(A) GANDHINAGAR HAS ERRED IN LAW AND ON F ACTS IN HOLDING THAT THE APPELLANT COMPANY WAS NOT LIABLE TO DEDUCT TAX AT SOURCE U/S.196C R.W.S.115AC ON THE INTEREST PAYABLE ON FCCBS. 2. LD.CIT(A) HAS ERRED ON FACTS AND LAW IN NOT CONSIDE RING THE ISSUE THAT AN INDIAN COMPANY (ASSESSEE) HAS TAKEN LIABILITY OF IS SUING FCCBS FROM INDIA AFTER TAKING APPROVAL OF BRI (INDIAN AUTHORIT Y), AS PER RULES AND GUIDELINES OF RBI AND HAS REMITTED INTEREST FROM IN DIA AS ITS LIABILITY DULY RECOGNIZED IN HIS BOOKS OF ACCOUNT PREPARED FOR IND IAN REGULATORY AUTHORITIES, RESULTING INTO INCOME ACCRUING AND ARI SING TO THE NON-RESIDENT ITA NO.3046/AHD /2010 THE ADIT (INT.TAXN.) VS. ADANI ENTERPRISES LTD. ASST.YEAR 2010-11 - 2 - UNDER SECTION 5(2) OF THE ACT FOR WHICH THE DEEMING PROVISIONS OF SECTION 9(1) ARE NOT APPLICABLE. 3. THE LD.CIT(A) ERRED IN LAW AND ON FACTS IN HOLDING THAT BOTH SECTIONS 5(2) AND 9(1)(V) OF THE ACT, ARE APPLICABLE TO DETERMINE THE SITUS OF INTEREST INCOME IN CASE OF NON-RESIDENT. 4. THE LD.CIT(A) ALSO ERRED IN LAW AND ON FACTS IN HOL DING THAT THE INTEREST PAID BY THE APPELLANT ON ITS FCCBS IS COVERED BY EX CEPTION TO SECTION 9(1)(V)(B) OF THE ACT AND CONSEQUENTLY IT FALLS OUT SIDE THE AMBIT OF DEEMED INCOME ARISING AND ACCRUING IN INDIA AND AS A RESUL T OUT OF SECTION 5 ALSO. 5. THE LD.CIT(A) ERRED IN LAW AND ON FACTS IN HOLDING THAT THERE IS AMBIGUITY IN DETERMINING WHETHER INCOME HAS BEEN RECEIVED OR ARISEN IN INDIA AND THUS THERE IS A NEED TO TRAVEL FROM SECTION 5(2) TO SECTION 9(1) OF THE ACT. 6. THE LD.CIT(A) HAS ALSO ERRED IN LAW AND ON FACTS IN NOT CONSIDERING THE VIEW OF THE ASSESSING OFFICER THAT THE ASSESSEE-COM PANY HAD BEEN DEDUCTING TAX AT SOURCE ON SAME INTEREST INCOME AS PER LAW, IN EARLIER YEARS AND STOPPED DEDUCTING SUCH TAX WITHOUT ANY C HANGE IN THE FACTS AND LAW. 7. THE LD.CIT(A) HAS ERRED IN LAW BY CONTRADICTING HIS OWN OBSERVATION THAT SECTION 115AC IS A CODE ITSELF AND THEN TRAVELING T O ANOTHER CHARGING SECTION OF THE ACT FOR DECIDING THE TAXABILITY OF I NTEREST INCOME. 8. IN VIEW OF THE ABOVE FACTS AND CIRCUMSTANCES, IT IS PRAYED THAT THE ORDER OF LD.CIT(A) GANDHINAGAR BE CANCELLED AND THAT OF AO R ESTORED TO THE ABOVE EXTENT. 2. THE LD.SR.DR OF THE REVENUE SUPPORTED THE ASSESS MENT ORDER, WHEREAS LD.COUNSEL FOR THE ASSESSEE SUPPORTED THE ORDER OF THE LD.CIT(A). HE ALSO SUBMITTED THAT THIS GROUND IS COVERED IN FAVOUR OF ASSESSEE BY THE DECISION OF ITAT A BENCH AHMEDABAD IN ASSESSEES OWN CASE FOR AY 2009-10 IN ITA NO.3072/AHD/2009, DATED 18/01/2013. HE SUBMITTED A COPY OF THE SAID TRIBUNAL ORDER. 3. WE HAVE HEARD THE RIVAL SUBMISSIONS, PERUSED THE MATERIAL AVAILABLE ON RECORD AND GONE THROUGH THE ORDERS OF THE AUTHORITI ES BELOW. IT IS NOTED BY THE LD.CIT(A) IN HIS ORDER THAT THE FACTS ARE IDENTICAL IN THE PRESENT YEAR AS PER IN THE PRECEDING YEAR, I.E. AY 2009-10. THE LD.SR.DR COULD NOT POINT OUT ANY CHANGE INTO THE FACTS IN THE PRESENT YEAR. IN THE PRECEDING YEAR, I.E. AY 2009- 10, THE SAME ISSUE WAS DECIDED BY THE TRIBUNAL IN F AVOUR OF THE ASSESSEE. ITA NO.3046/AHD /2010 THE ADIT (INT.TAXN.) VS. ADANI ENTERPRISES LTD. ASST.YEAR 2010-11 - 3 - SINCE THE REVENUE COULD NOT POINT OUT ANY DEFECT IN FACTS, THEREFORE WE DECLINE TO TAKE A CONTRARY VIEW FOR THIS YEAR ALSO. RESPE CTFULLY FOLLOWING THE DECISION OF THE COORDINATE BENCH PASSED IN ITA NO.3072/AHD/2 009 FOR AY 2009-10, WE UPHOLD THE ORDER OF THE LD.CIT(A) FOR THIS YEAR AS WELL AND THE GROUNDS OF APPEAL RAISED BY THE REVENUE ARE REJECTED. 3. IN THE RESULT, REVENUES APPEAL STANDS DISMISSED . ORDER PRONOUNCED IN COURT ON THE DATE MENTIONED HER EINABOVE AT CAPTION PAGE SD/- SD/- ( .. ) (' #$) ( N.S. SAINI ) ( KUL BHARAT ) ACCOUNTANT MEMBER JUDICIAL MEMBER AHMEDABAD; DATED 19/12/2013 71.., .../ T.C. NAIR, SR. PS 4 / ,$8 98'$ 4 / ,$8 98'$ 4 / ,$8 98'$ 4 / ,$8 98'$/ COPY OF THE ORDER FORWARDED TO : 1. (+ / THE APPELLANT 2. ,-(+ / THE RESPONDENT. 3. !! $ ': / CONCERNED CIT 4. ':() / THE CIT(A)-GANDHINAGAR 5. 8 #; ,$ , , / DR, ITAT, AHMEDABAD 6. ;<& =0 / GUARD FILE. 4' 4' 4' 4' / BY ORDER, -8$ ,$ //TRUE COPY// > >> >/ // / !) !) !) !) ( DY./ASSTT.REGISTRAR) , , , , / ITAT, AHMEDABAD 1. DATE OF DICTATION .. 2.12.13(DICTATION-PAD 3-PAGES ATTACHED AT THE END OF THIS FILE) 2. DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER 3.12.13 3. DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR.P. S./P.S.. 4. DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE D ICTATING MEMBER FOR PRONOUNCEMENT 5. DATE ON WHICH FAIR ORDER PLACED BEFOR E OTHER MEMBER 6. DATE ON WHICH THE FAIR ORDER COMES BACK TO THE SR.P .S./P.S.19.12.13 7. DATE ON WHICH THE FILE GOES TO THE BENCH CLERK 19.12.13 8. DATE ON WHICH THE FILE GOES TO THE HEAD CLERK ... 9. THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT RE GISTRAR FOR SIGNATURE ON THE ORDER.. 10. DATE OF DESPATCH OF THE ORDER