Global Thermoelectric Inc., V. Addl. CIT, Range Noida,

MA 213/DEL/2010

• Counselvise Citation: [2011] 123 COUNSELVISE.COM (IT) 7169 (ITAT-DELHI)
• Duration Of Justice: 1 year(s) 5 month(s) 27 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 04-11-2011
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: H
• Assessment Year: 2002-2003
• Appeal Filed On: 07-05-2010
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: N K CHAND
• Keywords: Permanent establishment; Question of law

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH E (FRIDAY) BEFORE SHRI C.L. SETHI AND SHRI K.G. BANSAL M.A. NO. 213(DEL)/2010 (ARISING OUT OF ITA NO. 3686(DEL)/2005) ASSESSMENT YEAR: 2002-03 GLOBAL THERMO ELECTRIC INC., AD DITIONAL COMMISSIONER OF 201, AKASH DEEP BUILDING, VS. INCOME -TAX, CIRCLE NOIDA. 26-A, BARAKHAMBA ROAD, NEW DELHI. (APPLICANT) (RESPONDENT) APPLICANT BY : SHRI M.P. RASTOGI, ADVOCATE RESPONDENT BY : SHR I N.K. CHAND, SR. DR DATE OF HEARIN G : 04.11.2011 DATE OF PRONOUNC EMENT: 04.11.2011. ORDER PER K.G. BANSAL ; AM IN THIS CASE, THE TRIBUNAL HAD PASSED THE ORDER ON 12.05.2006. THE ASSESSEE MOVED AN APPLICATION U/S 254(2) OF THE INCOME-TAX ACT, 1961 ON 07.05.2010. IT IS SUBMITTED THAT IN THE IMPUGNED ORDER 20% OF THE PROFIT ON SALE OF OFFSHORE SUPPLY OF EQUIPMENTS WAS TREATED TO HAVE ACCRUED IN INDIA. THIS IS IN SPITE OF THE CATEGORICAL F INDING THAT THE OFFSHORE SUPPLY OF EQUIPMENTS WAS MADE OUTSIDE INDIA. T HEREFORE, NO PROFIT COULD BE DEEMED TO HAVE ACCRUED IN INDIA AT TH E TIME OF NEGOTIATION OF THE AGREEMENT AS NO PERMANENT ESTABLISHMENT ( PE FOR SHORT) WAS IN M.A. NO. 213(DEL)/2010 2 EXISTENCE AT THE RELEVANT POINT OF TIME. THE FI NDING OF THE TRIBUNAL IS IN CONTRADICTION WITH THE DECISION OF THE SPECIAL BE NCH OF THE DELHI TRIBUNAL IN THE CASE OF MOTOROLA INC., 95 ITD 269. ACC ORDINGLY, IT IS URGED THAT THE RELEVANT PORTION OF THE ORDER MAY BE RECTIFI ED. 2. IN THE COURSE OF HEARING BEFORE US, IT WAS FO UND THAT THE ASSESSEE MOVED AN APPEAL BEFORE HONBLE ALLAHABAD HIGH CO URT AGAINST THE ORDER OF TRIBUNAL, WHICH HAS BEEN ADMITTED FOR ADJUD ICATION, BEING ITA NO. 187 OF 2010. IN THIS APPEAL, A GROUND HAS BEEN T AKEN UP IN RESPECT OF WHICH RECTIFICATION IS SOUGHT IN THE MISCELLANEOUS APPLICATION. THE CASE OF THE LD. COUNSEL IS THAT APPEAL PROCEEDINGS BEFORE THE HONBLE HIGH COURT ARE SEPARATE AND DISTINCT FROM RECTIFICATION PR OCEEDINGS BEFORE THE TRIBUNAL. ACCORDINGLY, IT IS URGED THAT THE APPL ICATION MAY BE DISPOSED OFF ON MERITS. IN THIS CONNECTION, RELIANCE HAS BEE N PLACED ON THE DECISION OF HONBLE SUPREME COURT IN THE CASE OF ISHIKAWAJIMA HARIMA HEAVY INDUSTRIES LTD. VS. DIRECTOR OF INCOME-TAX, (2007 ) 288 ITR 408 AND CIT VS. HYUNDAI HEAVY INDUSTRIES CO. LTD., (2007) 291 ITR 482. 3. IN REPLY, THE LD. DR SUBMITTED THAT THE TRI BUNAL HAS CONSIDERED THE WHOLE MATTER AND THEREAFTER HELD THAT PROFIT AC CRUES IN RESPECT OF OFFSHORE M.A. NO. 213(DEL)/2010 3 SUPPLIES MADE TO AN INDIAN PARTY BECAUSE THE CON TRACT HAD BEEN NEGOTIATED AND SIGNED IN INDIA. FURTHER, THE APPEAL OF THE ASSESSEE HAS BEEN ADMITTED WHICH CONTAINS A GROUND IN RESPECT OF TAXABILITY OF AFORESAID PROFIT IN INDIA. THE APPEALS ARE ADMITTED BY THE HIGH C OURT ONLY WHERE SUBSTANTIAL QUESTION OF LAW IS INVOLVED. THUS, IT CANNOT BE SAID THAT THERE IS ANY MISTAKE APPARENT FROM RECORD IN THE ORDER OF THE TRIBUNAL. 4. WE HAVE CONSIDERED THE FACTS OF THE CASE AND SUBMISSIONS MADE BEFORE US. IT IS A MATTER OF FACT THAT THE ORDER OF THE TRIBUNAL MAKES ELABORATE DISCUSSION ABOUT THE FACTS OF THE CAS E AND ACCRUAL OF INCOME IN INDIA. WE ARE NOT CONCERNED HERE WHETHER THE ORDER IS SUSTAINABLE OR NOT IN LAW. WE ARE CONCERNED WITH WHETHER T HERE IS A MISTAKE APPARENT FROM RECORD IN THE ORDER. TWO FACTORS GO AGAINST THE ASSESSEE. FIRSTLY, THE TRIBUNAL HAS DISCUSSED THE RELEVANT MATTER AND CAME TO A DECISION BY WRITING A SPEAKING ORDER. THEREFORE , ANY ORDER INTERFERING WITH THE EXISTING ORDER WOULD BE IN THE NATURE O F REVIEW OF THE ORDER AND NOT RECTIFICATION OF THE ORDER, WHICH IS BEYOND THE POWERS OF THE TRIBUNAL CONFERRED ON IT U/S 254 OF THE ACT. SECONDLY, T HE HONBLE ALLAHABAD HIGH COURT HAS ADMITTED APPEAL AGAINST THE ORDER OF THE TRIBUNAL, WHICH SHOWS THAT A SUBSTANTIAL QUESTION OF LAW IS INVOL VED. IN SUCH A SITUATION, IT M.A. NO. 213(DEL)/2010 4 CANNOT BE SAID THAT THERE IS ANY MISTAKE APPAR ENT FROM RECORD IN THE ORDER OF THE TRIBUNAL. ACCORDINGLY, WE ARE OF T HE VIEW THAT THE APPLICATION CANNOT BE SUSTAINED. 5. IN THE RESULT, THE APPLICATION IS DISMISSED. SD/- SD/- (C.L. SETHI) (K.G.BANSAL) JUDICIAL MEMBER ACCOUNTANT MEMBER SP SATIA COPY OF THE ORDER FORWARDED TO:- 1. KUMAR INTERNATIONAL, MORADABAD. 2. ITO, WARD 1(1), MORADABAD. 3. CIT 4. CIT(A) 5. THE DR, ITAT, NEW DELHI. ASSISTANT REGISTRAR.