Shell International B.V., New Delhi V. The Income tax Officer,Ward-1(4), Ahmedabad

MA 176/AHD/2013

• Counselvise Citation: [2014] 124 COUNSELVISE.COM (IT) 1763 (ITAT-AHMEDABAD)
• Duration Of Justice: 7 month(s) 12 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 09-05-2014
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Next Hearing Date: 02-05-2014
• Assessment Year: 2003-2004
• Appeal Filed On: 27-09-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Business expenditure

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH, AHMEDABAD BEFORE SHRI MUKUL KR. SHRAWAT, JUDICIAL MEMBER AND SHRI ANIL CHATURVEDI, ACCOUNTANT MEMBER M.A. NO.176/AHD/2013 (ARISING OUT OF ITA NO.1150/AHD/2007) A.YS. 2003-04 SHELL INTERNATIONAL B.V. CAREL VAN BYLANDTLAAN, 30 DEN HAAG, THE NETHERLANDS, C/O S.R. BATLIBOI & CO., 2 ND FLOOR, SHIVALIKA SAAM, NR.C.A. VIDHALAYA AMBAWADI, AHMEDABAD. PAN: AAHCS9360D VS INCOME TAX OFFICER, WARD-1(4), AHMEDABAD. (APPELLANT) (RESPONDENT) REVENUE BY : SHRI O.P. BATHEJA, SR.D.R. , ASSESSEE(S) BY : SHRI DHINAL SHAH, A.R. / DATE OF HEARING : 02/05/2014 / DATE OF PRONOUNCEMENT: 09/05/2014 / O R D E R PER SHRI MUKUL KUMAR SHRAWAT, JUDICIAL MEMBER THIS MISC. APPLICATION HAS BEEN FILED BY THE APPLIC ANT ON 27 TH OF SEPTEMBER, 2013 ARISING FROM THE ORDER OF THE TRIBU NAL AS PER THE NOMENCLATURE HEREINABOVE, DATED 07.08.2013. 2. THE MAIN GRIEVANCE OF THE APPLICANT AS POINTED O UT BY LEARNED AR, MR. DHINAL SHAH IS AS UNDER: 4.7 HOWEVER, THE APPELLANT HUMBLY AND MOST RESPECT FULLY SUBMITS THAT WHILE PASSING THE IMPUGNED ORDER, IT SEEMS THAT YOU R HONOURS HAVE INADVERTENTLY ALSO DIRECTED THE LEARNED ASSESSING O FFICER TO VERIFY THE MA NO.176/AHD/2013 IN ITA NO.1150 /AHD/2007 SHELL INTERNATIONAL BV VS. ITO WARD-1(4) AHMEDABAD. A.Y. 2003-04 - 2 - CLAIM OF DEDUCTIBILITY OF THE EXPENDITURE IN THE HA NDS OF THE HAZIRA ENTITIES IF IN CASE THE AMOUNTS DO NOT QUALIFY AS F TS. 4.8 IN THIS REGARD THE APPELLANT RESPECTFULLY SUBMI TS THAT THE ISSUE IN THE APPEAL RELATES TO TAXABILITY OF SERVICE RENDERED BY THE APPELLANT AND NOT ON THE DEDUCTIBILITY OF THE CLAIM OF EXPENDITURE BY HAZIRA ENTITIES. HAZIRA ENTITIES ARE ALTOGETHER SEPARATE ENTITIES RE GULARLY ASSESSED TO TAX IN THEIR RESPECTIVE JURISDICTIONS. ACCORDINGLY DIRE CTING THE LEARNED ASSESSING OFFICER TO VERIFY THE CLAIM OF EXPENDITUR E OF HAZIRA ENTITIES IS BEYOND THE SCOPE OF THE CURRENT APPEAL. 3. FURTHER, LEARNED AR HAS ARGUED THAT THE TRIBUNAL IS EMPOWERED TO PASS AN ORDER ONLY IN RESPECT OF THE SUBJECT MATTER OF THE APPEAL AND THE GROUNDS RAISED, BUT HAS NO POWER TO GIVE DIRECTION IN RESPECT OF AN ANOTHER PERSON WHO IS NOT IN APPEAL. BY DIRECTING T HE AO TO FIND OUT THE BUSINESS EXPENDITURE IN THE HANDS OF HAZIRA PARTIES , THE TRIBUNAL HAS EXCEEDED ITS JURISDICTION BECAUSE THE HAZIRA PARTIE S WERE NOT IN APPEAL BEFORE THE TRIBUNAL. HENCE, LEARNED AR HAS PLEADED THAT THE SUBJECT MATTER OF APPEAL WAS ABOUT TAXABILITY OF PAYMENT RE CEIVED BY THE APPELLANT, NAMELY, SHELL INTERNATIONAL BV FOR THE S ERVICES RENDERED AND NOT WHETHER THE SAID PAYMENT WAS ALLOWABLE AS A DED UCTION FOR HAZIRA ENTITIES. THEREFORE, THE DIRECTION FOR VERIFICATION OF CLAIM OF EXPENDITURE BY HAZIRA ENTITIES WAS BEYOND THE SUBJECT MATTER OF THE PARTIES. IN SUPPORT OF THIS CASE LAW CITED IS F.Y. KHAMBHATI VS. COMMISSIONER OF INCOME TAX, 61 ITR 30 (GUJ). 4. FROM THE SIDE OF THE RESPONDENT, LEARNED SR.D.R. , MR. O.P. BATHEJA HAS SUPPORTED THE ORDER OF THE TRIBUNAL AND ARGUED THAT ONLY BY ASCERTAINING THE FACT OF CLAIM OF EXPENDITURE IN TH E HANDS OF HAZIRA PARTIES A CORRECT DECISION SHALL BE ARRIVED BY THE AO; HENCE, SUCH A DIRECTION CANNOT BE HELD AS OUT OF THE SUBJECT MATT ER OF THE APPEAL. MA NO.176/AHD/2013 IN ITA NO.1150 /AHD/2007 SHELL INTERNATIONAL BV VS. ITO WARD-1(4) AHMEDABAD. A.Y. 2003-04 - 3 - 5. AFTER HEARING THE SUBMISSIONS OF BOTH THE PARTIE S AND ON CAREFUL PERUSAL OF THE ORDER OF THE TRIBUNAL, WE ARE OF THE CONSIDERED OPINION THAT THE ISSUE IN THE HAND CAN OTHERWISE BE DECIDED IN T HE LIGHT OF THE SEVERAL OTHER DIRECTIONS AS GIVEN BY THE TRIBUNAL, EVEN WIT HOUT EXAMINING THE EXPENDITURE CLAIMED BY HAZIRA PARTIES. UNDISPUTEDLY , HAZIRA PARTIES WERE NOT IN APPEAL BEFORE US AND THE QUESTION OF CLAIM O F EXPENDITURE IN THE HANDS OF HAZIRA PARTIES WAS NOT THE SUBJECT MATTER OF THIS APPEAL. WE FIND FORCE IN THIS MISC. APPLICATION THAT AN APPARENT MI STAKE HAS BEEN COMMITTED BY EXCEEDING THE JURISDICTION IN DIRECTIN G THE AO TO ENQUIRE INDEPENDENT TAX ENTITIES WHO IS NOT IN APPEAL BEFOR E US. HOWEVER, WE ARE ALSO AWARE ABOUT A SITUATION WHEN THE TRIBUNAL SOME TIMES DIRECTS THE AO TO COLLECT ALL MATERIAL FACTS AND FOR THAT DIRECT T HE AO TO CALL INFORMATION FROM THE CONNECTED PARTIES. HENCE, SUCH DIRECTION O F COLLECTION OF INFORMATION FROM OTHER PARTIES THEN THE PARTY IN AP PEAL; DEPENDS UPON THE FACTS OF EACH CASE. WE, THEREFORE, CONCLUDE THAT TH E OBSERVATION MADE HEREINABOVE SHALL REMAIN CONFINED TO THE FACTS OF T HIS CASE, PARTICULARLY WHEN WE HAVE NOTED THAT THE ENQUIRIES AS DIRECTED S HALL BE SUFFICIENT TO ARRIVE AT THE CORRECT CONCLUSION BY THE AO IN RESPE CT OF THE CLAIM MADE BY THIS APPLICANT. RESULTANTLY, WE HEREBY EXPUNGE T HE LINE, QUOTE THE AO HAS ALSO TO FIND OUT THAT IF THE SERVICES RENDER ED BY THIS ASSESSEE WERE NOT MADE AVAILABLE TO THOSE HAZIRA PARTIES FOR THEIR BUSINESS PURPOSE THEN UNDER WHAT GROUND THEY HAVE CLAIMED BU SINESS EXPENDITURE, IF ANY? UNQUOTE,. REST OF THE DIRECTIONS AND THE VERDICT OF THE JUDGMENT SHALL STAND AS IT WAS PRONOUNCED BY TH E SAID ORDER OF THE TRIBUNAL. MA NO.176/AHD/2013 IN ITA NO.1150 /AHD/2007 SHELL INTERNATIONAL BV VS. ITO WARD-1(4) AHMEDABAD. A.Y. 2003-04 - 4 - 6. IN THE RESULT, MISC. APPLICATION OF THE ASSESSEE IS ALLOWED IN THE TERMS MENTIONED SUPRA. SD/- SD/- (ANIL CHATURVEDI) (MUKUL KR. SHRAWAT) ACCOUNTANT MEMBER JUD ICIAL MEMBER AHMEDABAD; DATED 09/05/2014 PRABHAT KR. KESARWANI, SR. P.S. / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. / CONCERNED CIT 4. ( ) / THE CIT(A)-III, AHMEDABAD 5. , , / DR, ITAT, AHMEDABAD 6. / GUARD FILE. / BY ORDER, / ( DY./ASSTT.REGISTRAR) , / ITAT, AHMEDABAD