ADIT CIR 2(2), MUMBAI V. RELIANCE INDUSTRIES LTD AS AGENT OF M.S, UFJ BANK LTD, MUMBAI

ITA 6686/MUM/2011

• Counselvise Citation: [2012] 119 COUNSELVISE.COM (IT) 9254 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 2 month(s) 12 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-12-2012
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: D
• Next Hearing Date: 17-12-2012
• Assessment Year: 2005-2006
• Appeal Filed On: 05-10-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: A B KOLI

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL 'D' BENCH, MUMBAI BEFORE SHRI D. MANMOHAN, VICE PRESIDENT AND SHRI SANJAY ARORA, ACCOUNTANT MEMBER ITA NO. 6686/MUM/2011 (ASSESSMENT YEAR: 2005-06) ADIT (INTERNATIONAL TAXATION) 2(2) M/S. RELIANCE IN DUSTRIES LTD. SCINDIA HOUSE, BALLARD PIER (AS AGENT OF M/S. UFJ B ANK LTD.) N.M. ROAD, MUMBAI 400038 VS. MAKERS CHAMBERS-IV, 3RD FLOOR 222, NARIMAN POINT MUMBAI 400021 PAN - AAACR 5055 K APPELLANT RESPONDENT APPELLANT BY: SHRI A.B. KOLI RESPONDENT BY: SHRI FARROKH V. IRANI DATE OF HEARING: 17.12.2012 DATE OF PRONOUNCEMENT: 17.12.2012 O R D E R PER D. MANMOHAN, V.P. THIS APPEAL IS FILED AT THE INSTANCE OF THE REVENUE AND IT PERTAINS TO A.Y. 2005-06. 2. THE FOLLOWING GROUNDS WERE URGED BEFORE US: - 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE AND IN LAW, THE CIT(A) ERRED IN HOLDING THAT THE WITHDRAWAL ORDER B Y THE CENTRAL GOVERNMENT TO THE EFFECT THAT THE INTEREST PAYABLE BY RELIANCE INDUSTRIES LTD. IS NOT EXEMPT UNDER SECTION 10(15)( IV)(F) IN THE HANDS OF THE LENDERS, IS TO BE IGNORED AND THE INTE REST PAYMENT TO THE NON-RESIDENT LENDERS FOR THE ECB LOAN APPROV ED BY THE CENTRAL GOVERNMENT WOULD CONTINUE TO BE EXEMPT. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AND IN LAW, THE CIT(A) ERRED IN HOLDING THAT THE INTEREST INCOME OF RS.1,68,07,594/- IN THE HANDS OF THE LENDERS IS NOT CHARGEABLE TO TAX IN INDIA. 3. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AND IN LAW, THE CIT(A) FAILED TO APPRECIATE THAT THE ASSESSING OFFI CER IS BOUND BY THE IT ACT TO ENSURE THAT THE EXEMPTION UNDER SECTI ON 10(15)(IV)(F) ITA NO. 6686/MUM/2011 2 IS GRANTED ONLY WHERE THE NECESSARY APPROVAL WAS IN EXISTENCE AT THE RELEVANT TIME AND IN THE PRESENT CASE SUCH A PPROVAL WAS NON-EXISTENT. 4. THE APPELLANT PRAYS THAT THE ORDER OF THE LD. CI T (APPEALS) ON THE ABOVE GROUNDS BE SET ASIDE AND THAT OF THE ASSESSIN G OFFICER RESTORED. 3. AT THE OUTSET IT MAY BE NOTICED THAT THE LEARNED CI T(A) FOLLOWED THE DECISION OF THE ITAT IN THE CASE OF RELIANCE INDUST RIES LTD. (PAGES 1 TO 54 OF THE PAPER BOOK) TO HOLD THAT ONCE APPROVAL IS GRANT ED UNDER SECTION 10(15) OF THE INCOME TAX ACT, EVEN IF IT IS WITHDRAWN BY THE GOI, EXEMPTION ONCE CONFERRED ON THE ASSESSEE SHOULD NOT BE WITHDRAWN. IN THIS REGARD HE LEARNED CIT(A) OBSERVED AS UNDER: - 4.3 I FIND THAT THE DECISIONS OF THE HON'BLE MUMBA I TRIBUNAL DISCUSSED EARLIER ARE SQUARELY APPLICABLE TO THE AS SESSEE AT HAND. FURTHER, TWO OF MY PREDECESSING CSIT(A) HAVE ALSO DECIDED THE MATTER IN FAVOUR OF THE APPELLANT ON IDENTICAL ISSUES. ACC ORDINGLY, IT IS CLEAR THAT THE EXEMPTION WITHDRAWN BY THE GOI HOLDING INT EREST AS NOT BEING EXEMPT UNDER SECTION 10(15)(IV)(F) OF THE ACT IS TO BE IGNORED AND THE INTEREST PAYMENT BY THE APPELLANT TO THE NON-RESIDE NT LENDERS AS PER ECB LOAN APPROVED BY THE GOI WOULD CONTINUE TO BE E XEMPT. RESPECTFULLY FOLLOWING THE ORDERS OF THE JURISDICTI ONAL TRIBUNAL, IT IS THEREFORE HELD THAT THE IMPUGNED INTEREST PAYMENT O F RS.1,68,07,594/- IS NOT CHARGEABLE TO TAX IN INDIA. THE AO IS DIRECT ED TO DELETE THE ADDITION MADE. 4. AT THE TIME OF HEARING THE LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED THAT EVEN IN ASSESSEES OWN CASE, I.E. M/S. RELIANC E INDUSTRIES LTD., AS AGENT (UNDER SECTION 163 OF THE INCOME TAX ACT) OF M/S. U FJ BANK LTD., THE TRIBUNAL HAS CONSIDERED IDENTICAL ISSUE FOR A.Y. 20 04-05 WHEREIN THE PLEA OF THE ASSESSEE WAS ACCEPTED. HE THUS SUBMITTED THAT T HE ISSUE STANDS SQUARELY COVERED BY THE DECISION OF THE TRIBUNAL. 5. THE LEARNED D.R., HOWEVER, CONTENDED THAT THE REVEN UE HAS NOT ACCEPTED THE VIEW TAKEN BY THE TRIBUNAL. HE THUS RE LIED UPON THE ORDER OF THE AO. 6. HAVING REGARD TO THE CIRCUMSTANCES OF THE CASE AND IN VIEW OF THE FACT THAT IN ASSESSEES OWN CASE FOR A.Y. 2004-05 IDENTI CAL ISSUE WAS DECIDED IN ITA NO. 6686/MUM/2011 3 FAVOUR OF THE ASSESSEE, WE DO NOT FIND ANY INFIRMIT Y IN THE ORDER OF THE CIT(A). WE, THEREFORE, DISMISS THE APPEAL FILED BY THE REVENUE. ORDER PRONOUNCED IN THE OPEN COURT ON 17 TH DECEMBER, 2012. SD/- SD/- (SANJAY ARORA) (D. MANMOHAN) ACCOUNTANT MEMBER VICE PRESIDENT MUMBAI, DATED: 17 TH DECEMBER, 2012 COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT(A) 10, MUMBAI 4. THE DIT (INTERNATIONAL TAXATION) - 1, MUMBAI CITY 5. THE DR, D BENCH, ITAT, MUMBAI BY ORDER //TRUE COPY// ASSISTANT REGISTRAR ITAT, MUMBAI BENCHES, MUMBAI N.P.