THE COMMISSIONER OF INCOME TAX - INTERNATIONAL TAXATION -1 vs. GE TRANSPORTATION PARTS LLC

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ITA/1210/2018HC DelhiDLHC01071705201802 November 2018Bench: HON'BLE MR. JUSTICE SANJIV KHANNA,HON'BLE MR. JUSTICE ANUP JAIRAM BHAMBHANI2 pages
AI SummaryRemanded

What did the High Court hold?

The Delhi High Court disposed of the appeal in terms of the order passed in ITA No. 661/2018. The court noted that the question raised by the Revenue regarding the levy of interest under Section 234B of the Income Tax Act, 1961, was covered against them by the High Court's own judgment in Director of Income Tax (International Taxation) vs. GE Packaged Power Inc., (2015) 373 ITR 65 (Delhi). While an appeal against this judgment was pending before the Supreme Court, the parties agreed that the Supreme Court's ruling would equally apply to the present appeal. Consequently, the appeal was disposed of with a liberty to the parties to file an application after the Supreme Court's decision in case of any difficulty. No specific finding was recorded on the merits of the issue, as the disposal was based on the pending Supreme Court matter and the parties' agreement.

What were the facts?

The appeal was filed by the Commissioner of Income Tax - International Taxation -1 (the Revenue) against GE Transportation Parts LLC (the assessee). The appeal challenges an order of the Income Tax Appellate Tribunal (ITAT). The parties agreed to dispose of the present appeal in terms of a previous order passed in ITA No. 661/2018, citing Sections 158A and 158AA of the Income Tax Act, 1961, although acknowledging these provisions were not strictly applicable. The core issue pertains to the levy of interest under Section 234B of the Income Tax Act, 1961. The Revenue acknowledged that this issue was decided against them by the Delhi High Court in the case of Director of Income Tax (International Taxation) vs. GE Packaged Power Inc. (2015) 373 ITR 65 (Delhi). A special leave to appeal against this decision was granted by the Supreme Court, and the appeal is pending.

What were the issues?

1. Whether the levy of interest under Section 234B of the Income Tax Act, 1961, is sustainable in the facts and circumstances of the case? Assessee's Contention: The assessee relies on the Delhi High Court's decision in Director of Income Tax (International Taxation) vs. GE Packaged Power Inc., (2015) 373 ITR 65 (Delhi), which ruled against the levy of interest under Section 234B in similar circumstances. The assessee's counsel states that the present appeal should be disposed of in terms of the order passed in ITA No. 661/2018, which followed the aforementioned High Court ruling. Revenue's Contention: The Revenue acknowledges that the issue of levy of interest under Section 234B is covered against them by the Delhi High Court's judgment in Director of Income Tax (International Taxation) vs. GE Packaged Power Inc. They also note that an appeal against this judgment is pending before the Supreme Court. The Revenue agrees that the ruling of the Supreme Court would apply to the present appeal.

Which sections of the Income-tax Act were involved?

Section 158A,Section 158AA,Section 234B

AI-generated summary — verify with the full judgment below

$~28 * IN THE HIGH COURT OF DELHI AT NEW DELHI + ITA 1210/2018 THE COMMISSIONER OF INCOME TAX - INTERNATIONAL TAXATION -1

..... Appellant

Through: Mr. Ruchir Bhatia, Advocate.

versus

GE TRANSPORTATION PARTS LLC ..... Respondent Through: Mr. Rohit Garg and Mr. Aarush Bhatia, Advocates.

CORAM: HON'BLE MR. JUSTICE SANJIV KHANNA HON'BLE MR. JUSTICE ANUP JAIRAM BHAMBHANI

O R D E R %

02.11.2018 CM No. 45567/2018

Exemption allowed subject to all just exceptions.

CM No. 45568/2018 Delay in refiling is not opposed by the respondent-assessee. Accordingly, the application for condonation of delay is allowed. ITA 1210/2018 Counsel for the parties state that the present appeal may be disposed of in terms of the order dated 01.06.2018 passed in ITA No. 661/2018, The Pr. Commissioner of Income Tax-1 (International Taxation) vs. General Electric Power Systems INC. It is stated that this would be in consonance with Sections 158A and 158AA of the Income Tax Act, 1961, though these

provisions are not strictly applicable. 2. The question raised by the Revenue in these appeals relates to levy of interest under Section 234B of the Income Tax Act, 1961 which issue is covered against them vide the judgment of this Court in Director of Income Tax (International Taxation) vs. GE Packaged Power Inc., (2015) 373 ITR 65 (Delhi). 3. The appeal against the said decision is pending before the Supreme Court as special leave to appeal has been granted. 4. Counsel for the parties state that the ruling by the Supreme Court would equally apply to the present appeal. Recording the above, the appeal is disposed of. 5. In case of any difficulty, it will be open to the parties to file an application in this appeal after the decision of the Supreme Court.

SANJIV KHANNA, J.

ANUP JAIRAM BHAMBHANI, J. NOVEMBER 02, 2018 MR

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