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Documents citing Cloth Traders (P) Ltd., Etc vs Addl. Commr. Of Income Tax, ... on 4 May, 1979

Dcit, Circle-1(1), Bhubaneswar, ... vs M/S. Paradeep Phosphates Limited, ... on 4 August, 2017

o In the instant case, on facts, the ITO (TDS) had taken the view that since the sale of the concerned software included a licence to use the same, the payment made by the assessee to foreign suppliers constituted 'royalty' which was deemed to accrue or arise in India and, therefore, TAS was liable to be deducted under section 195(1). The said finding of the ITO(TDS) was upheld by the Commissioner (Appeals). However, in the second appeal, the Tribunal held that such sum paid by the assessee to the foreign software supplier was not a 'royalty', and that the same did not give rise to any 'income' taxable in India and, therefore, the assessee was not liable to deduct TAS. However, the High Court did not go into the merits of the case and it went straight to conclude that the moment there is remittance, an obligation to deduct TAS arises, which view stood overruled, o Since the High Court did not go into the merits of the case on the question of payment of royalty, the impugned judgment of the High Court was to be set aside and cases were to be remitted back to the High Court for de novo consideration of the cases on merits. A copy of the aforesaid Judgment in the said case of GE India Technology Cen.(P) Ltd. Vs CIT is enclosed and marked as Annexure-7 for your kind reference.
Income Tax Appellate Tribunal - Cuttack Cites 60 - Cited by 0 - Full Document

Dcit, Bhubaneswar vs M/S. Paradeep Phosphates Limited, ... on 9 November, 2017

"6. We have heard the rival submissions and perused the material available on record. On consideration of the facts and circumstances of the case, we are inclined to find meaning in the learned CIT assuming jurisdiction under the provisions of Section 263 by finding the order of the Assessing Officer erroneous and prejudicial to the interest of revenue insofar as the learned Counsel for the assessee has tried to highlight the direction of the learned CIT to the Assessing Officer for verifying the various issues as considered by him on the issue of show-cause notice which the learned Counsel for the assessee as of now before us has agreed for re-verification in the light of the Assessing Officer having verified the same but holding a view which view was not illegal. However, we are of the considered view that the direction of the learned AR to make addition of Rs.1344 Crores without re-examination suffers from infirmity to the extent that the very amounts sought to be added have been unilaterally on the basis of same material available to the learned CIT as per the view held by the Assessing Officer being the same could not be thrust upon by the learned CIT to be directed to be added without giving an opportunity to the Assessing Officer for re-examination as per the other issues also considered by the learned CIT. The learned Counsel for the assessee therefore has in his earnest put forth the facts which were not disturbed or disputed by the learned CIT for the purpose of assuming jurisdiction under the provisions of Section 263.The Assessing Officer had categorically allowed the claim of 99% of the 15 ITA No.315&331/CTK/2015 raw materials purchased being imported raw materials utilized in the turnover of the assessee was therefore in accordance with the scheme of the business of the assessee and not because the assessee was to determine the nature of payments first for considering deduction of tax at source. The case laws relied upon by the learned Counsel for the assessee was also before the learned CIT at the time of proceedings after the issue of show cause notice when it was clearly on the identical facts considered that the provisions of Section 195(1) do not arise unless and until the need for such consideration has to be from Commissioner of Income-tax (Appeals)(TDS) whether was brought on record by the learned CIT. The learned CIT therefore could not unilaterally direct the AO to disallow the same when the procedure to adopt assuming. jurisdiction under the provisions of Section 63 remained unfulfilled by the learned CIT in accordance with the cited case laws namely, GE India Technology Cen.(P) Ltd v. CIT (supra). The assessee had discharged the onus on being confronted by the Assessing Officer and therefore, neither there was an error nor it was prejudicial to the interest of Revenue by way of literal meaning as can be perused in the order of the Hon'ble Apex Court in the case laws cited. We do find merit in the contention of the learned Counsel for the assessee that the learned CIT has not considered the direction of the Hon'ble Apex Court which says - " If the contention of the department, that the moment there is remittance, the obligation to deduct TAS arises, is to be accepted, then the words 'chargeable under the provisions of the Act' in section 195(1) will be obliterated The said expression in section 195(1) shows that the remittance has got to be of a trading receipt, the whole or part of which is liable to tax in India. The payer is bound to deduct TDS only if the tax is assessable in India. If tar is not so assessable, there is no question of TAS being deducted." Therefore, we are of the considered view that the learned CIT directing the Assessing Officer to disallow the claim of raw material consumption amounting to Rs.1344 Crones to be added in the hands of the assessee was beyond the jurisdiction assumed u/s.263 and is directed to be quashed to that extent. However, as the learned Counsel for the assessee has agreed to be reexamined on the other issues raised by the learned CIT on direction to tile Assessing Officer for de novo assessment the same is upheld."
Income Tax Appellate Tribunal - Panji Cites 33 - Cited by 0 - Full Document

Paradeep Phosphates Limited, ... vs Acit, Bhubaneswar on 9 November, 2017

"6. We have heard the rival submissions and perused the material available on record. On consideration of the facts and circumstances of the case, we are inclined to find meaning in the learned CIT assuming jurisdiction under the provisions of Section 263 by finding the order of the Assessing Officer erroneous and prejudicial to the interest of revenue insofar as the learned Counsel for the assessee has tried to highlight the direction of the learned CIT to the Assessing Officer for verifying the various issues as considered by him on the issue of show-cause notice which the learned Counsel for the assessee as of now before us has agreed for re-verification in the light of the Assessing Officer having verified the same but holding a view which view was not illegal. However, we are of the considered view that the direction of the learned AR to make addition of Rs.1344 Crores without re-examination suffers from infirmity to the extent that the very amounts sought to be added have been unilaterally on the basis of same material available to the learned CIT as per the view held by the Assessing Officer being the same could not be thrust upon by the learned CIT to be directed to be added without giving an opportunity to the Assessing Officer for re-examination as per the other issues also considered by the learned CIT. The learned Counsel for the assessee therefore has in his earnest put forth the facts which were not disturbed or disputed by the learned CIT for the purpose of assuming jurisdiction under the provisions of Section 263.The Assessing Officer had categorically allowed the claim of 99% of the raw materials purchased being imported raw materials utilized in the turnover of the assessee was therefore in accordance with the scheme of the business of the assessee and not because the assessee was to determine the nature of payments first for considering deduction of tax at source. The case laws relied upon by the learned Counsel for the assessee was also before the learned CIT at the time of proceedings after the issue of show cause notice when it was clearly on the identical facts considered that the provisions of Section 195(1) do not arise unless and until the need for such consideration has to be from Commissioner of Income-tax (Appeals)(TDS) whether was brought on record by the learned CIT. The learned CIT therefore could not unilaterally direct the AO to disallow the same when the procedure to adopt 15 ITA No.315&331/CTK/2015 assuming. jurisdiction under the provisions of Section 63 remained unfulfilled by the learned CIT in accordance with the cited case laws namely, GE India Technology Cen.(P) Ltd v. CIT (supra). The assessee had discharged the onus on being confronted by the Assessing Officer and therefore, neither there was an error nor it was prejudicial to the interest of Revenue by way of literal meaning as can be perused in the order of the Hon'ble Apex Court in the case laws cited. We do find merit in the contention of the learned Counsel for the assessee that the learned CIT has not considered the direction of the Hon'ble Apex Court which says - " If the contention of the department, that the moment there is remittance, the obligation to deduct TAS arises, is to be accepted, then the words 'chargeable under the provisions of the Act' in section 195(1) will be obliterated The said expression in section 195(1) shows that the remittance has got to be of a trading receipt, the whole or part of which is liable to tax in India. The payer is bound to deduct TDS only if the tax is assessable in India. If tar is not so assessable, there is no question of TAS being deducted." Therefore, we are of the considered view that the learned CIT directing the Assessing Officer to disallow the claim of raw material consumption amounting to Rs.1344 Crones to be added in the hands of the assessee was beyond the jurisdiction assumed u/s.263 and is directed to be quashed to that extent. However, as the learned Counsel for the assessee has agreed to be reexamined on the other issues raised by the learned CIT on direction to tile Assessing Officer for de novo assessment the same is upheld."
Income Tax Appellate Tribunal - Panji Cites 34 - Cited by 0 - Full Document

Blackrock Services India Pvt. Ltd., ... vs Acit, Gurgaon on 2 February, 2018

27. We find the Pune Bench of the Tribunal in the case of IT Cube Solutions (P.) Ltd. (supra) has excluded Coral Hub Limited from the list of comparables on the ground that the Coral's work is substantially outsourced and thus business module has acquired a different character on the touchstone of FAR analysis. The various other decisions relied on by the ld. counsel for the assessee also support its case. In view of above and considering the fact that this company is functionally different from that of the assessee company and it has significant outsourcing of work, we direct exclusion of Coral Hub Limited from the list of comparables.
Income Tax Appellate Tribunal - Delhi Cites 19 - Cited by 0 - Full Document

Punjab State Industrial Development ... vs Deputy Commissioner Of Income Tax on 24 April, 2006

It will thus be seen that, according to this decision, the words "such profits and gains" in the latter part of Sub-section (1) of Section 80E were referable to the quantum of the profits and gains attributable to the specified business included in the total income as referred to in the earlier part of the provision. If this decision lays down the correct interpretation of Sub-section (1) of Section 80E, the same interpretation must also govern the language of Sub-section (1) of Section 80M. Structurally, there is hardly any difference between Section 80E, Sub-section (1), and Section 80M, Sub-section (1), and the reasoning which appealed to the Court in the interpretation of Sub-section (1) of Section 80E must apply equally in the interpretation of Sub-section (1) of Section 80M. We find ourselves wholly in agreement with the view taken by this Court in Cambay Electric Supply Co. Ltd. v. CIT and we must, therefore, dissent from the interpretation placed on Sub-section(1) of Section 80M by the decision in Cloth Traders' case (supra).
Income Tax Appellate Tribunal - Chandigarh Cites 179 - Cited by 6 - Full Document

Indore Development Authority And Etc. vs Manoharlal And Ors. Etc. on 23 October, 2019

United States 333 US 611: “I see no reason why I should be consciously wrong today because I was unconsciously wrong yesterday.” Lord Denning also said to the same effect when he observed in Ostime v. Australian Mutual Provident Society (1960) AC 549: “The doctrine of precedent does not compel Your Lordships to follow the wrong path until you fall over the edge of the cliff.” Here we find that there are overriding considerations which compel us to reconsider and review the decision in Cloth Traders case (supra).
Supreme Court of India Cites 74 - Cited by 8 - A Mishra - Full Document

Commissioner Of Income Tax vs M.N. Dastur & Co. (P) Ltd. on 14 January, 2000

20. From the discussion above it is made clear that after insertion of section, 80AB, the argument of Shri Syali has no force that the decision of Bombay High Court in case of New Great Insurance Co. Ltd. (supra) and decision of this court in case of Darbhanga Marketing Co. Ltd. (supra) has been approved by Supreme Court in its decision in the case of Cloth Traders (P) Ltd. (supra). Therefore, the deduction should be allowed on gross income received in India without taking into account the expenses incurred in India.
Calcutta High Court Cites 27 - Cited by 9 - Full Document

Paradeep Phosphates Ltd., Bhubaneswar vs Jcit, Range-1, Bhubaneswar, ... on 27 April, 2018

28. We have heard rival submissions and perused the material available on record. We find the CIT(A) while dealing with the disputed issue has made an elaborate discussion relying upon various judicial decisions and deleted the addition. The CIT(A) further found that the AO has not brought any facts on record nor it is apparent that income in respect of transactions arises in favour of the nonresident sellers in the Indian territory or that the income of such nonresidents in respect of transactions is assessable under Indian Income tax Law. The CIT(A) also relied upon the decision of Hon'ble Supreme Court in the case of GE India Technology Cen. (P) Ltd. v. CIT (supra) 327 ITR 456 (SC), wherein it is held that if the payment is made to a non-resident, which is not a taxable income in India, then no tax is required to be deducted u/s.195 of the Act. Accordingly, we do not find any mistake in the order of CIT(A) and the same is upheld and ground Nos. 1 to 3 of Revenue are dismissed.
Income Tax Appellate Tribunal - Cuttack Cites 34 - Cited by 1 - Full Document

M/S. Tata Elxsi Limited, Bangalore vs Deputy Commissioner Income Tax, ... on 8 January, 2024

13. Now, according to Parliament, this interpretation placed on Section 80-M by the summit court was not in conformity with the legislative intent and it resulted in considerable unjustified loss of revenue. Parliament therefore immediately proceeded to set right what according to it was an interpretation contrary to the legislative intent and with a view to setting at naught such interpretation. Parliament, by Section 12 of Finance (No.2) Act, 1980, introduced in the Income Tax Act, 1961, Section 80-AA with retrospective effect from April 1, 1968, that is, the date when Section 80-M was originally enacted, providing that the deduction required to be allowed under Section 80M in respect of inter-corporate dividends "shall be computed with reference to the income by way of such dividends as computed in accordance with the provisions of this Act (before making any deduction under this Chapter) and not with reference to the gross amount of such dividends". It is the validity of this new Section 80-AA which is challenged in the present writ petition. But we may make it clear that what is challenged is not the prospective operation of Section 80-AA. That would clearly be unexceptionable because the Legislature can always impose a new tax burden or enhance an existing tax liability with prospective effect. But the complaint of the assessee was against retrospective effect being given to Section 80-AA, because that would have the effect of enhancing the tax burden on the assessee by setting at naught the interpretation placed on Section 80M by the decision in Clothe Traders case and reducing the amount of deduction required to be allowed under Section 80-M. However, as pointed out at the commencement of this judgment, it would become necessary to examine this complaint against the constitutional validity of retrospective operation of Section 80-AA only if we affirm the interpretation placed on Section 80-M by the decision of this Court in Cloth Traders case.
Income Tax Appellate Tribunal - Bangalore Cites 91 - Cited by 0 - Full Document
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