PR. COMMISSIONER OF INCOME TAX -7 DELHI vs. POWER MACHINES INDIA LTD.

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ITA/160/2017HC DelhiDLHC01047998201717 February 2017Bench: CASES PERTAINING TO SPL.DIVISION BENCHES1 pages
AI SummaryDismissed

What did the High Court hold?

The High Court held that no substantial question of law arises in the present appeal. This decision is based on a previous order of the same court in ITA 399-400/2016 and connected cases, titled Principal Commissioner of Income Tax-7 v. Power Machines India Ltd., decided on 28.07.2016. In that prior case, an identical issue concerning similar payments made to the same foreign entity (a Russian banker) for bank guarantee commission had arisen. The Court had refused to frame a question of law in that instance, upholding the ITAT's order. Consequently, following the precedent set by its own prior judgment, the present appeal is dismissed for want of a substantial question of law.

What were the facts?

The Revenue is aggrieved by an order of the Income Tax Appellate Tribunal (ITAT). The appeal is filed under Section 260A of the Income Tax Act, 1961. The Revenue contends that amounts added under Section 40(a)(i) were wrongly deleted by the ITAT. The dispute pertains to payments made to a Russian banker for bank guarantee commission. For previous years, an identical issue concerning similar payments to the same foreign entity had arisen. The High Court had previously refused to frame a question of law in a similar case involving the same assessee and foreign entity, upholding the ITAT's order. The present appeal challenges the deletion of additions made under Section 40(a)(i).

What were the issues?

1. Whether a substantial question of law arises from the order of the ITAT concerning the deletion of amounts added under Section 40(a)(i) of the Income Tax Act, 1961, relating to bank guarantee commission paid to a foreign entity. Assessee's Contention: The judgment does not record any specific contentions made by the assessee. The High Court's decision is based on its prior ruling. Revenue's Contention: The Revenue contends that the amounts added under Section 40(a)(i) of the Income Tax Act, 1961, were wrongly deleted by the ITAT. They are aggrieved by the ITAT's order and seek to challenge it.

Which sections of the Income-tax Act were involved?

Section 260A,Section 40(a)(i)

AI-generated summary — verify with the full judgment below

$~22 * IN THE HIGH COURT OF DELHI AT NEW DELHI

ITA 160/2017, CM APPL.6428/2017

PR. COMMISSIONER OF INCOME TAX -7 DELHI ..... Appellant Through: Ms. Vibhooti Malhotra, Jr. Standing Counsel.

versus POWER MACHINES INDIA LTD. ..... Respondent

Through: None. CORAM: HON’BLE MR. JUSTICE S. RAVINDRA BHAT HON’BLE MR. JUSTICE V. KAMESWAR RAO

O R D E R %

17.02.2017

The Revenue claims to be aggrieved by the order of the Income Tax Appellate Authority (ITAT) in its appeal under Section 260A and contends that the amounts added under Section 40(a)(i) of the Income Tax Act, 1961 were wrongly deleted. At the outset it is pointed out that in the assessee’s case, for previous years, an identical issue had arisen in respect of similar payments made to the same foreign entity, i.e., a Russian banker, towards bank guarantee commission. The Court had refused to frame the question of law upholding the order of the ITAT (see order in ITA399-400/2016 and connected cases - Principal Commissioner of Income Tax-7 v. Power Machines India Ltd., decided on 28.07.2016). Consequently no substantial question of law arises; the appeal is, therefore, dismissed.

S. RAVINDRA BHAT, J

V. KAMESWAR RAO, J FEBRUARY 17, 2017/vikas/

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