Calcutta High Court
Commissioner Of Income Tax vs Bertrams Scott Limited. on 2 February, 1987
Equivalent citations: (1987)62CTR(CAL)11
JUDGMENT
Dipak Kumar Sen, J. - This is a consolidated reference initiated by the assessee and also the revenue by applications under s. 256(1) of the IT Act, 1961. The following questions have been referred at the instance of the assessee :
"(1) Whether, on the facts and in the circumstances of the case the Tribunal was right in holding that the assessee had business connection in India ?
(2) If the answer to question number 1 is in the affirmative whether, on the facts and in the circumstances of the case and on a correct interpretation of the agreement dt. 23-12-1960 the Tribunal was justified in holding that part of the income from payments made by the Indian company M/s. Bertrams Scott (India) Limited to the assessee company as is reasonably attributable to the operations carried out in India is assessable to tax under the IT Act, 1961 ?"
2. The following question has been raised at the instance of the revenue :
"Whether, on the facts and in the circumstances of the case and having held that the assessee had business connection in India, the Appellate Tribunal was, justified in holding that the entire income was not liable to assessment and only part thereof was liable to assessment as is reasonably attributable to the operations carried out in India ?"
3. No one appeared on behalf of the assessee at the hearing of this reference. Therefore, we decline to answer the questions which have been referred at the instance of the assessee.
4. So far as the question referred at the instance of the revenue is concerned the same arises from the following observation in the decision of the Tribunal :
"We searched in vain in the records for finding out some basis for determining what of the total income of the assessee on account of its business connection in India can reasonably be attributed to services rendered by it in India. Neither the department nor the assessee, even when asked, could give us any relevant particulars .....
Necessarily therefore, an estimate has to be made as regards what of the amount brought to tax by the Income-tax Officer is attributable to the service rendered by the assessee in India.
xx xx xx xx Taking everything into consideration and looking particularly into the large number of items of services in the schedule of the agreement which relate to services to be rendered outside India as compared to the comparatively fewer services that are to be rendered in India. We feel that 10% of what had been estimated by the Income-tax Officer as net profits of those years would be a proper estimate of the assessees income that had accrued or arisen in India to be accordingly brought to tax. The Appellate Assistant Commissioners order in all these cases will stand reversed to that extent".
5. The findings of the Tribunal as recorded in its judgment noted above have not been challenged by the revenue and they have become final. It appears to us that the Tribunal had materials on record on the basis of which the Tribunal had materials on record on the estimate of the appropriation of profits which would be said to have accrued, arisen and taxable in India. The decision of the Tribunal cannot be said to be improper or illegal and needs no interference.
6. For the reasons above, we answer the said question in the affirmative and in favour of the assessee.
7. There will be no order as to costs.
Syamal Kumar Sen, J. - I agree.