LS Cable Ltd., New Delhi V. DDIT, New Delhi

ITA 5280/DEL/2011

• Counselvise Citation: [2012] 140 COUNSELVISE.COM (IT) 58594 (ITAT-DELHI)
• Duration Of Justice: 2 month(s) 2 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-01-2012
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: D
• Assessment Year: 2008-2009
• Appeal Filed On: 28-11-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: J P CHENDER KER
• Assessee Lawyers: ATUL AWASTHI
• Section: 143(3); 2

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL (DELHI BENCH `D : NEW DELHI) BEFORE SHRI U.B.S. BEDI, JUDICIAL MEMBER AND SHRI B.C. MEENA, ACCOUNTANT MEMBER ITA NO.5280/DEL./2011 (ASSESSMENT YEAR : 2008-09) M/S L.S. CABLE LTD., VS. DDIT, CIRCLE 3(1), (NOW KNOWN AS LS CABLE AND SYSTEM LTD.) INTERNATIO NAL TAXATION, S-37, 1 ST & 2 ND FLOOR, GREEN PARK (MAIN MARKET) NEW DELHI. NEW DELHI-110016. (PAN/GIR NO.AAACL6446Q) (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI ATUL AWASTHI REVENUE BY : SHRI J.P. CHENDER KER, DR ORDER PER U.B.S. BEDI, J.M. THIS APPEAL OF THE ASSESSEE IS DIRECTED AGAINST TH E ORDER PASSED BY THE DDIT CIRCLE 3(1), INTERNATIONAL TAXATION, NEW DELHI DATE D 4.10.2011 U/S 143(3) READ WITH SECTION 144C(13) OF THE I.T. ACT, 1961 FOR THE ASSE SSMENT YEAR 2008-09, WHEREIN THE FOLLOWING EFFECTIVE THREE GROUNDS OF APPEAL HAVE BE EN RAISED AS UNDER: 1. THAT THE HON'BLE DISPUTE RESOLUTION PANEL-I, NE W DELHI (DRP') AND THE AO HAVE ERRED ON THE FACTS AND IN LAW IN ALLEGING T HAT THE RECEIPTS FROM OFFSHORE SUPPLY OF EQUIPMENTS ARE TAXABLE IN INDIA. IN PASSING THE AFORESAID ORDER, THE DRP AND THE AO HAVE IGNORED THE LAW OF THE LAND STATED BY THE HON'BLE SUPREME COURT IN THE CASE OF ISHIKAWAJMA HARIMA HEAVY INDUSTRIES LIMITED [288 IT R 408 (SC)]. FURTHER, THE DRP AND THE AO HAVE ALSO IGNORED THE F OLLOWING DECISIONS OF THE HON'BLE DELHI HIGH COURT & HON'BLE INCOME TAX A PPELLATE TRIBUNAL ('ITAT') PASSED IN THE APPELLANT'S OWN CASE FOR PRE CEDING ASSESSMENT YEARS: I.T.A. NO.5280/DEL./2011 (A.Y. : 2008-09) 2 DELHI HIGH COURT JUDGMENT FOR AY 2002-03 - DIT VS. LG CABLE LTD. [ITA NO. 703 OF 2009 (DEL.)] DATED 24 DECEMBER 2010 DELHI TRIBUNAL JUDGMENT FOR AYS 2003-04, 2004-05 & 2005-06 - LS CABLE LTD. VS. DY. DIRECTOR OF INCOME TAX [ITA NOS. 3634, 3635 & 3636 OF 2009 (DELHI ITAT)] DATED 13 AUGUST 2010 COMMISSIONER OF INCOME TAX (APPEALS) ORDER FOR AY 2 006-07 - ITA NO. 110/ 08-09 DATED 11 FEBRUARY 2011 DELHI TRIBUNAL JUDGMENT FOR AY 2007-08 - LS CABLE L TD. VS. DY. DIRECTOR OF INCOME TAX [ITA NO. 5495 OF 2010 (DELHI IT AT)] APPELLANT PLEADS THAT THE INSTANT CASE IS SQUARELY COVERED BY THE AFORESAID CASES BOTH ON FACTS AND IN LAW. 2. WITHOUT PREJUDICE TO THE ABOVE GROUND THAT APPEL LANT IS NOT TAXABLE ON OFFSHORE SUPPLY INCOME IN INDIA, THE DRP AND THE AO HAVE ERRED ON FACTS AND IN LAW IN ALLEGING THAT THE TOTAL PROFITS FROM OFFSHOR E SUPPLY WAS 20% OF THE GROSS REVENUE OF OFFSHORE SUPPLY AND IN ALLEGING THAT 50% OF SUCH PROFITS ARE ATTRIBUTABLE TO INDIAN PROJECT OFFICE ('PO') EVEN T HOUGH NO PART OF THE ACTIVITY RELATING TO OFFSHORE SUPPLY WAS CARRIED OUT BY APPE LLANT'S PO IN INDIA. 3. THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE AO HAS ERRED IN INITIATING PENALTY PROCEEDINGS UNDER SECTI ON 271(L)(C) OF THE ACT. THE ABOVE GROUNDS ARE MUTUALLY EXCLUSIVE AND WITHOU T PREJUDICE TO EACH OTHER. 2. AT THE VERY OUTSET, LD.COUNSEL FOR THE ASSESSEE SUBMITTED THAT SIMILAR ACTION IN EARLIER YEARS, IN WHICH SAME AGREEMENT WAS THERE, T HE ISSUE HAS BEEN DECIDED IN FAVOUR OF THE ASSESSEE NOT ONLY BY DIFFERENT BENCHES OF THE T RIBUNAL, BUT ALSO BY THE HONBLE JURISDICTIONAL HIGH COURT IN THE CASE OF THE ASSESS EE. THEREFORE, BY FILING COPIES OF FOLLOWING DECISIONS, IT WAS STRONGLY CONTENDED FOR DECIDING THE ISSUE RAISED IN THE APPEAL IN FAVOUR OF THE ASSESSEE: 1. ITAT RULING IN THE MATTER OF LG CABLE LTD. FOR ASSESSMENT YEAR 2002-03 (I.T.A. NO.4692/DEL/2005). I.T.A. NO.5280/DEL./2011 (A.Y. : 2008-09) 3 2. HIGH COURT ORDER IN THE MATTER OF LG CABLE LTD. FOR ASSESSMENT YEAR 2002- 03 (I.T.A. NO.703/2009). 3. CONSOLIDATED ITAT RULING IN THE MATTER OF LS CAB LE LTD. FOR ASSESSMENT YEAR 2003-04, 04-05 & 05-06 (I.T.A. NOS.3634, 3635 & 3636(DEL.) OF 2009). 4. CONSOLIDATED HIGH COURT ORDER IN THE MATTER OF L S CABLE LTD. FOR ASSESSMENT YEAR 2003-04, 04-05, & 05-06 (I.T.A. NO. 706, 704 & 707 OF 2011). 5. CIT(A) ORDER IN THE MATTER OF LS CABLE LTD. FOR ASSESSMENT YEAR 2006-07. 6. ITAT RULING IN THE MATTER OF LS CABLE LTD. FOR A SSESSMENT YEAR 2007-08 (I.T.A. NO.5495/DEL./2010). 3. LD.DR COULD NOT CONTROVERT THIS FACTUAL ASPECT T HAT ISSUES ARE SQUARELY COVERED IN FAVOUR OF THE ASSESSEE BY ITAT DECISIONS AS WELL AS BY HONBLE JURISDICTIONAL HIGH COURT, BUT RELIED UPON THE ORDER OF THE AUTHORITIES BELOW TO PLEAD FOR CONFIRMATION OF THE SAME. LD.DR FURTHER SUBMITTED THAT DEPARTMENT HAS NOT ACC EPTED THE ORDER OF THE HONBLE HIGH COURT IN THE CASE OF THE ASSESSEE AND FILED SLP BEF ORE THE HONBLE SUPREME COURT. THEREFORE, THE MATTER AT THE MOST SHOULD BE SET ASI DE WITH THE DIRECTION TO WAIT FOR THE OUTCOME OF THE SLP PENDING BEFORE THE HONBLE SUPRE ME COURT. 4. WE HAVE HEARD BOTH THE SIDES, CONSIDERED THE MAT ERIAL ON RECORD AS WELL AS PRECEDENTS RELIED UPON BY LD.COUNSEL FOR THE ASSESS EE. WE FIND THAT THE ISSUES INVOLVED IN THIS APPEAL ARE SQUARELY COVERED IN FAVOUR OF TH E ASSESSEE AS IS CLEAR FORM VARIOUS DECISIONS OF ITAT AS WELL AS OF JURISDICTIONAL HIGH COURT IN ASSESSEES OWN CASE WHICH FACT HAS NOT BEEN REFUTED BY THE LD.DR TOO. THE AG REEMENT INVOLVED IN EARLIER DECISIONS AS WELL AS IN THE CASE IN HAND IS THE SAME WHICH HA S BEEN TAKEN INTO CONSIDERATION TO DECIDE THE ISSUES IN FAVOUR OF THE ASSESSEE AND THI S FACT TOO HAS NOT BEEN REFUTED BY LD.DR EXCEPT CONTENDING THAT SLP IS PENDING BEFORE THE HO NBLE SUPREME COURT. SINCE, JURISDICTIONAL HIGH COURT DECISION IS BINDING UPON THE AUTHORITIES AND THE TRIBUNALS I.T.A. NO.5280/DEL./2011 (A.Y. : 2008-09) 4 WORKING UNDER ITS TERRITORIAL JURISDICTION. THERE FORE, FOLLOWING THE PRECEDENTS AS LAID DOWN BY THE HONBLE HIGH COURT AS WELL AS BY DIFFER ENT BENCHES OF THE ITAT, WE DECIDE THE ISSUES IN FAVOUR OF THE ASSESSEE WHILE ACCEPTIN G THE APPEAL. 5. AS A RESULT, THE APPEAL OF THE ASSESSEE GETS A CCEPTED. ORDER PRONOUNCED IN OPEN COURT ON 31.01.2012. SD/- SD/- (B.C. MEENA) ACCOUNTANT MEMBER (U.B.S. BEDI ) JUDICIAL MEMBER DATED : JANUARY 31, 2012 SKB COPY OF THE ORDER FORWARDED TO:- 1. APPELLANT 2. RESPONDENT 3. DDIT, CIRCLE 3(1), INTERNATIONAL TAXATION, NEW D ELHI. 4. DRP-I, NEW DELHI. 5. CIT(ITAT) DEPUTY REGISTRAR, ITAT