Asstt. Commissioner of Income Tax-III, Kanpur V. M/s Alig Tannery, Kanpur

ITA 730/LKW/2013

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 83391 (ITAT-LUCKNOW)
• Duration Of Justice: 1 year(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-11-2014
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 08-09-2014
• Assessment Year: 2008-2009
• Appeal Filed On: 08-11-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: PRADEEP SETH
• Keywords: Principle of natural justice; Retrospective amendment
• Section: 80IB

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL LUCKNOW BENCH A, LUCKNOW BEFORE SHRI SUNIL KUMAR YADAV, JUDICIAL MEMBER AND SHRI A.K. GARODIA, ACCOUNTANT MEMBER ITA NO.730/LKW/2013 ASSESSMENT YEAR:2008 - 09 M/S ALIG TANNERY, 11/27 - B, GWALTOLI, KANPUR. PAN:AACFA4441P VS. A.C.I.T. - III, KANPUR. (RESPONDENT) (APPELLANT) ITA NO.743/LKW/2013 ASSESSMENT YEAR:2008 - 09 A.C.I.T. - III, KANPUR. VS. M/S ALIG TANNERY, 11/27 - B, GWALTOLI, KANPUR. PAN:AACFA4441P (RESPONDENT) (APPELLANT) SHRI ALOK MITRA, D. R. REVENUE BY SHRI PRADEEP SETH, C. A. ASSESSEE BY 08/09/2014 DATE OF HEARING 11 /11/2014 DATE OF PRONOUNCEMENT O R D E R PER A. K. GARODIA, A.M. THESE ARE CROSS APPEALS FILED BY THE ASSESSEE AND THE REVENUE, WHICH ARE DIRECTED AGAINST THE ORDER OF CIT(A) - II, KANPUR DATED 06/08/2013 FOR ASSESSMENT YEAR 2008 - 2009. 2. THE REVENUE HAS RAISED THE FOLLOWING GROUNDS IN ITS APPEAL: 1. THAT THE LD. COMMISSIONER OF INCOME TAX (APPEALS) - II, KANPUR HAS ERRED IN LAW AND ON FACTS IN DELETING ADDITION OF RS.9,09,210/ - MADE BY THE ASSESSING OFFICER ON ACCOUNT OF NON - DEDUCTION OF TDS ON PAYMENT OF 2 COMMISSION TO FOREIGN AGENT WITHOUT APPRECIATING THE FACTS BROUGHT ON RECORD BY THE ASSESSING OFFICER DURING THE COURSE OF ASSESSMENT PROCEEDINGS. 2. THAT THE LD. COMMISSIONER OF INCOME TAX (APPEALS) - II, KANPUR HAS ERRED IN LAW AND ON FACTS IN DELETING THE ABOVE ADDITION WITHOUT CONSIDERING THE BOARD' S CIRCULAR NO.7/2009 DATED 22.10.2009. 3. THAT THE LD. COMMISSIONER OF INCOME TAX (APPEALS) - II, KANPUR HAS NOT APPRECIATED THE SETTLED PRINCIPLE IN RESPECT OF INTERPRETATION OF PROSPECTIVE OR RETROSPECTIVE NATURE OF AMENDMENT IN THE STATUTE AS LAID DOWN B Y THE HON'BLE SUPREME COURT IN THE CASE OF CIT VS GOLD COIN HEALTH FOOD PVT. LTD. (2008) 304 ITR 308 (SC) AND CIT VS MOSER BAER INDIA LTD. [2009] 315 ITR 460(SC). 4. THAT THE LD. COMMISSIONER OF INCOME TAX (APPEALS) - II, KANPUR HAS ERRED IN LAW AND ON FACT S IN NOT APPRECIATING THE FACT THAT THE SERVICES RENDERED BY THE NON RESIDENT AGENT TO PROCURE ORDERS FROM FOREIGN BUYERS ARE PURELY TECHNICAL AS WELL AS MANAGERIAL IN NATURE. THEREFORE, THE PROVISION OF SECTION 9(1) (VII) OF THE INCOME TAX ACT, 1961 IS CL EARLY APPLICABLE ON THE ASSESSEE. 5. THAT THE LD. COMMISSIONER OF INCOME TAX (APPEALS) - II, KANPUR HAS ERRED IN LAW AND ON FACTS IN NOT APPRECIATING THE FACT THAT THE PAYMENT BY THE RESIDENT ASSESSEE IN CONNECTION WITH ITS BUSINESS IN INDIA TO A PERSON OUT SIDE COUNTRY IS NOTHING BUT A FEE WHICH HAS BEEN PAID BY THE RESIDENT ASSESSEE TO THE NON - RESIDENT FOR THE TECHNICAL SERVICES RENDERED BY HIM. 6. THAT THE ORDER OF THE LEARNED CIT(A) - II, KANPUR DATED 06/08/2013 NEEDS TO BE QUASHED AND THE ORDER PASSED BY THE ASSESSING OFFICER DATED 30/03/2010 TO BE RESTORED. 3. THE GROUNDS RAISED BY THE ASSESSEE ARE AS UNDER: 1. THAT THE LEARNED C.I.T.(APPEALS) HAS ERRED IN LAW AND ON FACTS IN CONFIRMING THE DISALLOWANCE OF ASSESSEE'S CLAIM FOR DEDUCTION U/S 80IB TO TH E EXTENT OF RS.4,98,471/ - RELATING TO THE EXPORT INCENTIVE NAMELY, DUTY DRAW BACK. 3 2. THAT THE LEARNED C.I.T.(APPEALS) HAS FURTHER ERRED IN LAW AND ON FACTS IN APPLYING THE JUDGMENT OF HON'BLE SUPREME COURT IN THE CASE OF LIBERTY INDTA VS. C.I.T. (2009) 2 25 C.T.R. 233 (S.C.) WHICH IS DISTINGUISHABLE ON THE FACTS OF THE ASSESSEE'S CASE. 3. THAT THE ORDER OF THE C.I.T.(APPEALS) IS ARBITRARY, UNJUST, EXCESSIVE, BAD IN LAW AND AGAINST THE PRINCIPLES OF NATURAL JUSTICE. 4. IT WAS FAIRLY CONCEDED BY LEARNED A.R. OF THE ASSESSEE THAT THE ISSUE RAISED BY THE ASSESSEE IN ITS APPEAL REGARDING NOT ALLOWING OF DEDUCTION U/S 80IB OF THE ACT IN RESPECT OF EXPORT INCENTIVE NAMELY DUTY DRAW BACK IS COVERED AGAINST THE ASSESSEE BY THE JUDGMENT OF HON'BLE APEX COURT IN T HE CASE OF LIBERTY INDIA VS. CIT [2009] 225 CTR 233 (SC). ACCORDINGLY, THIS ISSUE IS DECIDED AGAINST THE ASSESSEE. 5. IN THE RESULT, THE APPEAL OF THE ASSESSEE STANDS DISMISSED. 6. REGARDING THE REVENUES APPEAL, LEARNED D.R. OF THE REVENUE SUPPORTED THE ASSESSMENT ORDER. HE ALSO DRAWN OUR ATTENTION TO VARIOUS AMENDMENTS IN SECTION 9(1)(VII) OF THE ACT AS WELL AS IN SECTION 195(1) BY WAY OF EXPLANATION (2) WITH RETROSPECTIVE EFFECT FROM 01/04/62. 7. AS AGAINST THIS, LEARNED A.R. OF THE ASSESSEE SUPPORTED THE ORDER OF LEARNED CIT(A). HE PLACED RELIANCE ON THE TRIBUNAL DECISION IN THE CASE OF LOHIA STARLINGER LTD. IN I.T.A. NO.32/LKW/2010 & 389/LKW/2010 WHEREIN THE ISSUE WAS DECIDED IN FAVOUR OF THE ASSESSEE AFTER CONSIDERING BOTH THESE SECTIONS OF INCOME TAX ACT I.E. 9(1)(VII) AND 195(1). 8. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. WE FIND THAT IN THE CASE OF LOHIA STARLINGER LTD. ALSO, THE ISSUE INVOLVED WAS REGARDING REQUIREMENT OF DEDUCTION OF TDS FROM THE PAYMENT MADE OF COMMISSION TO FOREIGN AGENT. THIS ISSUE WAS DECIDED BY THE TRIBUNAL IN THAT CASE IN FAVOUR OF THE ASSESSEE BY FOLLOWING THE JUDGMENT OF HON'BLE ALLAHABAD HIGH COURT IN THE 4 CASE OF CIT VS. MODEL EXIMS. IN THIS DECISION, THE TRIBUNAL HAS DULY CONSIDERED THE RECENT AMENDMENTS IN SECTION 9(1)(VII) AS WELL AS SECTION 195(1) OF THE ACT. HENCE, THE ISSUE IN PRESENT APPEAL IS SQUARELY COVERED IN FAVOUR OF THE ASSESSEE. RESPECTFULLY FOLLOWING THIS TRIBUNAL DECISION, WE DECIDE THIS ISSUE IN FAVOUR OF THE ASSESSEE. 9. IN THE RESULT, THE APPEAL OF THE REVENUE STANDS DISMISSED. 10. IN THE COMBINED RESULT, THE APPEAL OF THE REVENUE AND THE ASSESSEE ARE DISMISSED. (ORDER WAS PRONOUNCED IN THE OPEN COURT ON THE DATE MENT IONED ON THE CAPTION PAGE) SD/. SD/. (SUNIL KUMAR YADAV) ( A. K. GARODIA ) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 11 /11/2014 *C.L.SINGH COPY OF THE ORDER FORWARDED TO : 1. THE APPELLANT 2. THE RESPONDENT. 3. CONCERNED CIT 4. THE CIT(A) 5. D.R., I.T.A.T., LUCKNOW ASSTT. REGISTRAR