M/s UAE Exchange Centre, Cochin V. ITO, Ernakulam

ITA 410/COCH/2007

• Counselvise Citation: [2012] 140 COUNSELVISE.COM (IT) 61533 (ITAT-COCHIN)
• Duration Of Justice: 5 year(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-05-2012
• Appeal Filed By: Assessee
• Bench Allotted: DB
• Next Hearing Date: 24-04-2012
• Assessment Year: 2005-2006
• Appeal Filed On: 10-05-2007
• Court: TRIBUNAL
• Department Lawyers: ABHIMANYU SINGH YADAV
• Assessee Lawyers: VIVEK C GOVIND

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL COCHIN BENCH, COCHIN BEFORE S/SHRI N.R.S.GANESAN, JM AND B.R.BASKAR AN, AM I.T.A. NOS. 409 & 410 /COCH/2007 ASSESSMENT YEARS : 2004-05 & 2005-06 M/S. UAE EXCHANGE CENTRE WLL KUWAIT, M.G. ROAD, ERNAKULAM, KOCHI-11. [PAN: AAACU 7143F] VS. THE INCOME TAX OFFICER, WARD- 1(1), ERNAKULAM. (ASSESSEE-APPELLANT) (REVENUE- RESPONDENT) I.T.A. NOS. 531 & 526 /COCH/2007 ASSESSMENT YEARS : 2004-05 & 2005-06 THE INCOME TAX OFFICER, WARD- 1(1), ERNAKULAM. VS. M/S. UAE EXCHANGE CENTRE WLL KUWAIT, M.G. ROAD, ERNAKULAM, KOCHI-11 (REVENUE-APPELLANT) (ASSESSEE- RESPONDENT) ASSESSEE BY SHRI VIVEK C. GOVIND, CA REVENUE BY SHRI ABHIMANYU SINGH YADAV, JR. DR DATE OF HEARING 24/04/2012 DATE OF PRONOUNCEMENT 25/05/2012 O R D E R PER B.R.BASKARAN, ACCOUNTANT MEMBER: THESE CROSS APPEALS ARE DIRECTED AGAINST THE SEPAR ATE ORDERS PASSED BY LD. CIT(A)-II, KOCHI AND THEY RELATE TO THE ASSESSMENT YEARS 2004-05 AND 2005-06. 2. THE SOLITARY ISSUE RAISED IN THESE APPEALS IS WH ETHER THE LD. CIT(A) IS JUSTIFIED IN HOLDING THAT THE GROSS TOTAL INCOME OF THE ASSESSEE IS TO BE COMPUTED AT 110% OF THE EXPENSES INCURRED BY THE ASSESSEE. I.T.A. NOS. 409,410, 531 &526 /COCH/2007 2 3. THE FACTS RELATING TO THE ISSUE ARE STATED IN BR IEF. THE ASSESSEE IS A LIMITED LIABILITY COMPANY INCORPORATED IN THE STATE OF KUWA IT. IT CARRIES ON THE BUSINESS OF PURCHASE AND SALE OF FOREIGN CURRENCIES AND TRAVELL ERS CHEQUES, HANDLING OF REMITTANCES ETC. THE ASSESSEE HAS SET UP LIAISON OFFICES IN IN DIA PRINCIPALLY TO ENABLE REMITTANCES INTO INDIA FROM THE PEOPLE WORKING ABROAD. FROM TH E VARIOUS OFFICES OF THE ASSESSEE LOCATED IN KUWAIT, INSTRUMENTS/CHEQUES ARE ISSUED I N FAVOUR OF PERSONS RESIDING IN INDIA OR BY WAY OF CREDIT INTO THEIR NRE BANK ACCOUNTS MAI NTAINED IN INDIA. THE ASSESSEE FILED ITS RETURNS OF INCOME FOR THE YEARS UNDER CON SIDERATION DECLARING NIL INCOME. 4. THE ASSESSING OFFICER TOOK THE VIEW THAT A PORTI ON OF INCOME EARNED BY THE ASSESSEE SHOULD BE ATTRIBUTABLE TO THE OPERATIONS C ARRIED IN INDIA. ACCORDINGLY HE DETERMINED THE INCOME ATTRIBUTABLE TO INDIAN OPERAT IONS AT 50% OF THE GLOBAL PROFITS AND THUS, COMPLETED THE ASSESSMENT FOR BOTH THE YEA RS UNDER CONSIDERATION. THE ASSESSEE CHALLENGED BOTH THE ASSESSMENT ORDERS BEFO RE THE LD. CIT(A) AND THE FIRST APPELLATE AUTHORITY, BY FOLLOWING HIS OWN ORDER IN THE ASSESSEES OWN CASE FOR THE EARLIER YEARS, DIRECTED THE AO TO ADOPT 110% OF THE EXPENSE S AS THE GROSS TOTAL INCOME OF THE ASSESSEE AND ACCORDINGLY COMPUTE THE TOTAL INCOME O F THE ASSESSEE. AGGRIEVED BY THE ORDERS OF THE LD. CIT(A), BOTH THE PARTIES ARE IN A PPEAL BEFORE US. 5. AT THE TIME OF HEARING, THE LD. COUNSEL FOR THE ASSESSEE FILED A COPY OF THE ORDER DATED 30/3/2010 PASSED BY THE CO-ORDINATE BENCH OF THIS TRIBUNAL IN THE CASE OF M/S. UAE EXCHANGE CENTRE, M.G. ROAD, ERNAKULAM (ANOTHER ASS ESSEE) IN I.T.A. NOS. 461- 467/COCH/2006 ETC. HE FURTHER SUBMITTED THAT THE T RIBUNAL, UNDER THE IDENTICAL SET OF FACTS AND CIRCUMSTANCES, HAS UPHELD THE DECISION OF THE LD. CIT(A) IN DIRECTING THE ASSESSING OFFICER TO ADOPT THE GROSS TOTAL INCOME A T 110% OF THE EXPENDITURE. ACCORDINGLY, THE LD. COUNSEL PRAYED THAT THE SAID O RDER MAY BE FOLLOWED IN THE PRESENT CASES ALSO. 6. THE LD. DR DID NOT CONTRADICT THE SUBMISSIONS MA DE BY THE LD. AR. I.T.A. NOS. 409,410, 531 &526 /COCH/2007 3 7. IN THE INSTANT CASES, WE NOTICE THAT THE VIEW T AKEN BY THE LD CIT(A) IS IN ACCORDANCE WITH THE VIEW TAKEN BY THE CO-ORDINATE B ENCH OF THE TRIBUNAL IN ITS ORDER DATED 30-03-2010 REFERRED SUPRA, UNDER IDENTICAL SE T OF FACTS. HENCE, WE DO NOT FIND ANY INFIRMITY IN THE ORDERS PASSED BY THE LD. CIT(A ) IN DIRECTING THE ASSESSING OFFICER TO ADOPT 110% OF THE EXPENSES AS THE GROSS TOTAL INCO ME OF THE ASSESSEE AND COMPUTE THE TOTAL INCOME ACCORDINGLY. 8. IN THE RESULT, APPEALS OF BOTH THE ASSESSEE AND THE REVENUE ARE DISMISSED. PRONOUNCED ACCORDINGLY ON 25-05-2012 SD/- SD/- (N.R.S.GANESAN) (B.R.BASKARAN) JUDICIAL MEMBER ACCOUNTANT MEMBER PLACE: KOCHI DATED: 25TH MAY, 2012 GJ COPY TO: 1. M/S. UAE EXCHANGE CENTRE WLL KUWAIT, M.G. ROAD, ERN AKULAM, KOCHI-11. 2. THE INCOME TAX OFFICER, WARD-1(1), ERNAKULAM. 3. THE COMMISSIONER OF INCOME-TAX (APPEALS)-II, KOC HI 4. THE COMMISSIONER OF INCOME-TAX, KOCHI 5. D.R., I.T.A.T., COCHIN BENCH, COCHIN. 6. GUARD FILE. BY ORDER (ASSISTANT REGISTRAR) I.T.A.T, COCHIN