Income Tax Appellate Tribunal - Kolkata
Singhi & Co., Kolkata vs Assessee on 28 May, 2012
IN THE INCOME TAX APPELLATE TRIBUNAL "A" BENCH: KOLKATA
[Before Shri Pramod Kumar, A.M. & Shri George Mathan, J.M.]
I.T.A. No.195/Kol/2012
Assessment Year :1993-94
M/s. Singhi & Co., -Vs- ACIT, Circle-54, Kolkata
Chartered Accountants,
1-B, Old Post Office Street,
4th floor, Kolkata - 700 001
(PAN:AASFS 9578D)
(Appellant) (Respondent)
Date of concluding the hearing : 28.05.2012
Date of pronouncing the Order : 28.05.2012
Appearances : For the Appellant : Shri A.K.Gupta
: For the Respondent : Shri A.K.Pramanik
ORDER
Per Shri George Mathan,J.M. This is an appeal filed by the assessee against the order of the Ld. CIT(A)- XXIV, Kolkata in Appeal No.182/CIT(A)-XXIV/C-38/07-08 dated 29th December 2011 for the assessment year 1993-94.
2. Shri A. K. Gupta appeared for the appellant whereas Shri A. K. Pramanik appeared for the respondent.
3. In this assessee's appeal, the assessee has raised the following grounds:
"1. That the order of reassessment passed by the Income Tax Officer under Section 147 of the Income Tax Act is without jurisdiction, illegal and ab- initio void. The proceedings under Section 148 of the Act were not properly initiated.
2. For that none of the conditions precedent for initiation of the proceedings u/s.148 of the Act were satisfied and/or fulfilled and the notice under Section 148 of the Act and all the proceedings initiated thereon and any order passed pursuant to the said notice is illegal and without jurisdiction and authority of law.2 ITA No.195/Kol/2012 M/s.Singhi & Co.
Assessment Year: 1993-94
3. For that all materials and primary facts and evidence relevant for the purpose of assessment were truly and fully disclosed and there was no omission or failure of whatever na1are in this regard by the appellant and the provisions of Section 147(a) of the Act were not attracted.
4. For that matter and in the event of no expenses have been incurred in India in connection with earning of this income, as such no deduction of expenses incurred for earning other income in India to be made proportionately in computation of deduction uls.80-O.
5. For that your petitioner craves the right to put additional grounds and! or alter/amend/modify the present grounds at the time of hearing."
4. At the time of hearing, it was submitted by the ld. counsel for the assessee that as he has a very good case on merits, he did not wish to press this ground in regard to technicality of the reopening. Consequently, it was his submission that ground nos.1 to 3 of the assessee's appeal may be treated as not pressed. Consequently, ground nos. 1 to 3 of the assessee's appeal are dismissed as not pressed.
5. In regard to ground no.4, there was submission that the issue was against the action of the ld. CIT(A) in confirming the computation of deduction under section 80-O as made by the AO. It was the submission that the assessee is a partnership firm, which is engaged in the profession of Chartered Accountants. It was a submission that the assessee had income from foreign remittance on which the assessee was entitled to claim deduction under section 80-O. It was his submission that the deduction under section 80-O was granted to the assessee on the gross receipts. It was his submission that for the immediately preceding assessment year, the issue of deduction under section 80-O had gone into done and the issue was in appeal before the ld. CIT(A). It was his submission that the ld. CIT(A) for the assessment year 1997-98 had directed that in view of the decision of the Hon'ble Jurisdictional High Court in the case of M.N.Dastur & Co. (2000) 243 ITR 10, the deduction under section 80-O would have been granted on the net income and not on the gross income. It was his submission that when computing the net income, 3 ITA No.195/Kol/2012 M/s.Singhi & Co. Assessment Year: 1993-94 the expenditure incurred on earning the said foreign income in respect of the Indian expenditure was liable to be proportionately disallowed. It was his submission that in the order of the ld. CIT(A) for the assessment year 1997-98, the ld. CIT(A) had directed that the proportionate amount of Indian salaries from income of the three Chartered Accountants received during the period of absence from India should be treated as direct expenditure against the income from the foreign currency received. It was submission that this finding was because the said three officials apparently continued to earn their income in India, since they were on official duty. It was submission that this finding of the ld. CIT(A) for the assessment year 1997-98 in appeal no. 11/SR-8/CIT(A)-X/99-00 dated 24.09.2000 had become final insofar as the order of the ld. CIT(A) for the assessment year 1997-98 had not been appealed against by the revenue. It was further submission that for the relevant assessment year also, the issue was identical. It was submission that he had no objection if the AO was directed to compute the deduction under section 80-O on the similar line, as per the direction given by the ld. CIT(A) for the assessment year 1997-98. It was submission that for the relevant assessment year, the ld. CIT(A) had not considered the decision in the assessee's own case for the assessment year 1997-98. It was submission that in view of the decision of the Hon'ble Supreme Court in the case of Radhasoami Satsang -vs- CIT 193 ITR 321, as the facts were identical for the relevant assessment year as for the assessment year 1997-98, the order of the ld. CIT(A), which has been accepted by the revenue, similar finding was liable to be given in the case of the assessee for the assessment year 1993-94. In reply, the ld. D.R. vehemently supported the orders of the ld. CIT(A). It was submission that the deduction under section 80-O had been rightly computed by the AO and the same has been rightly upheld by the ld. CIT(A).
5. We have heard the rival submissions. The submission of the ld. A.R. that the order of the ld. CIT(A) for the assessment year 1997-98 has been accepted by the revenue stands indisputed. The perusal of the order of the ld. CIT(A) for the 4 ITA No.195/Kol/2012 M/s.Singhi & Co. Assessment Year: 1993-94 assessment year 1997-98 clearly shows that the ld. CIT(A) has followed the decision of the Hon'ble Jurisdictional High Court in the case of M.N.Dastur & Co. referred to supra. After following the decision of the Hon'ble Jurisdictional High Court in the case of M.N.Dastur & Co., the ld. CIT(A) had proceeded to exclude the proportionate amount of Indian salary/income of the said three Chartered Accountants received during the period of absence from India by treating the same as direct expenditure against the income from the foreign currency received. This finding of the ld. CIT(A) having become final and the facts remaining identical, in view of the decision of the Hon'ble Supreme Court in the case of Radhasoami Satsang (supra), wherein the Hon'ble Supreme Court has held "We are aware of the fact that, strictly speaking, res judicata does not apply to income-tax proceedings. Again, each assessment year being a unit, what is decided in one year may not apply in the following year but where a fundamental aspect permeating through the different assessment years has been found as a fact one way or the other and parties have allowed that position to be sustained by not challenging the order, it would not be at all appropriate to allow the position to be changed in a subsequent year" would apply. In the present case, as to the finding of the ld. CIT(A) for the assessment year 1997-98 has been accepted and the finding therein is a point of fact and a fundamental one at that, such a finding would have to be held to be applicable for the assessment year 1993-94 also. In these circumstances, we are of the view that the principles of natural justice demand that a factual finding given by the ld. CIT(A) is liable to be followed for the assessment year 1993-94 also. In this circumstances, respectfully following the decision of the Hon'ble Supreme Court in the case of Radhasoami Satsang (supra) and applying the principles of consistency as explained therein, this issue is restored to the file of the AO with a categorical direction that when computing the deduction under section 80-O, the AO shall follow the same method as prescribed by the ld. CIT(A) for the assessment year 1997-98 in the assessee's own case referred to supra. In the circumstances, the order of the ld. CIT(A) stands set aside 5 ITA No.195/Kol/2012 M/s.Singhi & Co. Assessment Year: 1993-94 and the issue is restored to the file of the AO with the direction, as given above. In the circumstances, the said ground of the assessee is allowed.
6. In the result, the appeal filed by the Assessee is partly allowed.
This Order is dictated and pronounced in the open court on 28th May, 2012 immediately after the completion of the hearing.
Sd/- Sd/-
(Pramod Kumar) (George Mathan)
Accountant Member Judicial Member
Dated : 28th May, 2012
Copy of the order forwarded to:
1. M/s. Singhi & Co., Chartered Accountants, 1-B, Old Post Office Street, 4th floor, Kolkata - 700 001 2 ACIT, Circle-54, Kolkata
3. The CIT(A), Kolkata
4. CIT, Kolkata
5. DR, Kolkata Benches, Kolkata True Copy, By order, Asstt. Registrar, ITAT, Kolkata Talukdar(Sr.P.S.) 6 ITA No.195/Kol/2012 M/s.Singhi & Co. Assessment Year: 1993-94