THE COMMISSIONER OF INCOME TAX, TRICHUR vs. M/S. AL AHALYA MONEY EXCHANGE BUREAU

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ITA/192/2015HC KeralaKLHC01025593201518 September 2018Bench: HONOURABLE MR.JUSTICE K.VINOD CHANDRAN,HONOURABLE MR. JUSTICE ASHOK MENON4 pages
AI SummaryRemanded

What did the High Court hold?

The High Court held that the appeals were infructuous because the advance ruling, which formed the basis of the assessments, had been cancelled by the Delhi High Court in U.A.E. Exchange Centre Ltd. v. Union of India & another. The Court noted that the Revenue had filed an SLP which was admitted by the Supreme Court. Consequently, the High Court closed the Income Tax Appeals as infructuous. However, the Court left it open for the Revenue to move an application for reopening the appeals before the High Court if the Supreme Court were to allow the SLP. In such an event, both sides would be free to argue the merits of the appeals. The respondents (assessee) were held to be entitled to the benefit of the directions of a previous judgment in ITA No. 352/2010 and connected cases, which involved similar issues.

What were the facts?

The appeals before the High Court of Kerala concerned assessment year 2006-07. The appellant was the Commissioner of Income Tax, Trichur, and the respondent was M/s. Al Ahalya Money Exchange Bureau. The assessments leading to these appeals were based on an advance ruling by the Authority for Advance Ruling, which held that the respondent's operations in India were taxable. The dispute before the Tribunal was limited to the quantum of tax. However, both parties informed the High Court that the advance ruling had been cancelled by a Delhi High Court judgment in U.A.E. Exchange Centre Ltd. v. Union of India & another. The Revenue had filed a Special Leave Petition (SLP) against the Delhi High Court's decision, which had been admitted by the Supreme Court.

What were the issues?

1. Whether the appeals before the Tribunal are infructuous in light of the cancellation of the advance ruling by the Delhi High Court, and if so, what is the consequence for the pending appeals before the High Court? (Question of law) Assessee's Contention: The assessee, through their counsel, agreed with the Revenue that the appeals were infructuous because the advance ruling, which formed the basis of the assessment, had been cancelled by the Delhi High Court. They relied on the judgment in U.A.E. Exchange Centre Ltd. v. Union of India & another. Revenue's Contention: The Revenue's counsel also agreed that the appeals were infructuous due to the cancellation of the advance ruling. However, they informed the Court that an SLP had been admitted by the Supreme Court against the Delhi High Court's decision, leaving open the possibility of the Revenue's appeal being revived.

AI-generated summary — verify with the full judgment below

IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT THE HONOURABLE MR.JUSTICE K.VINOD CHANDRAN & THE HONOURABLE MR. JUSTICE ASHOK MENON TUESDAY ,THE 18TH DAY OF SEPTEMBER 2018 / 27TH BHADRA, 1940 ITA.No. 192 of 2015 AGAINST THE ORDER/JUDGMENT IN ITA 333/2014 of I.T.A.TRIBUNAL,COCHIN BENCH DATED 05-12-2014 FOT THE ASSESSMENT YEAR 2006-07 APPELLANT: THE COMMISSIONER OF INCOME TAX, TRICHUR TRICHUR BY ADVS. SRI.P.K.R.MENON,SR.COUNSEL, GOI(TAXES) SRI.JOSE JOSEPH SC FOR INCOME TAX RESPONDENT/S: M/S. AL AHALYA MONEY EXCHANGE BUREAU VRINDAVAN, PUTHENVEETTU VAZHI, CHEMBUKAVU, THRISSUR 20 BY ADVS.DR. K B MOHAMED KUTTY SR COUNSEL SRI.E.C.AHAMED FAZIL SRI.K.M.FIROZ SMT.M.SHAJNA SMT.UMMUL FIDA SRI.K.M.FIROZ THIS INCOME TAX APPEAL HAVING BEEN FINALLY HEARD ON 18.09.2018, ALONG WITH ITA.224/2015, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:

ITA Nos192/2015 & 224/2015 2 JUDGMENT Vinod Chandran, J Heard the learned Senior Counsel for the appellant and the learned Senior Counsel for the respondents. It is agreed by both sides that a batch of appeals involving similar issues filed by the appellant were disposed of by judgment dated 19.12.2011 in ITA No.352/2010 and connected cases. 2. In that judgment, the Division Bench has held thus : Assessments giving rise to these appeals filed by the Revenue were made based on advance ruling given by the Authority for Advance Ruling constituted under the Income Tax Act holding that respondent's operations in India attract tax under the Income Tax Act. Therefore, the limited dispute settled before the Tribunal is on the quantum, against which the Revenue is in appeals. However, when the appeals were taken up, both sides submitted that the advance ruling rendered by the authority stands cancelled by the Division Bench judgment of the Delhi High

ITA Nos192/2015 & 224/2015 3 Court in U.A.E.Exchange Centre Ltd. v. Union of India & another, reported in 313 ITR 94. Since the learned Senior Standing Counsel for the Revenue submitted that SLP is admitted by the Supreme Court, we close these Income Tax Appeals as infructuous leaving it open to the Revenue to moveapplication before this Court for reopening the appeals in the event the Supreme Court allows the SLP filed by the Revenue. In the event of re-opening of appeals, both sides are free to argue on merits of the appeals at that time. Since the issues involved in these appeals are also similar, these appeals are disposed of directing that the respondents herein will be entitled to the benefit of the directions of the judgment in ITA No. 352/2010 and connected cases referred to above. Sd/- K.VINOD CHANDRAN JUDGE Sd/- ASHOK MENON jma JUDGE

ITA Nos192/2015 & 224/2015 4 APPENDIX (IN ITA NO.192/2015) PETITIONER'S/S EXHIBITS: ANNEXURE P1 A TRUE COPY OF THE ASSESSMENT ORDER DATED 31-12-2010. ANNEXURE P2 TRUE COPY OF THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS)DATED 25.02.2014 ANNEXURE P3 TRUE COPY OF THE ORDER OF THE INCOME TAX APPELLATE TRIBUNAL DATED 04.12.2014. ANNEXURE P4 TRUE COPY OF THE JUDGMENT OF THE HIGH COURT OF KERALA. //true copy//

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