THE COMMISSIONER OF INCOME TAX - INTERNATIONAL TAXATION -2 vs. PUNEET MAHAJAN

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ITA/258/2018HC DelhiDLHC01032380201827 February 2018Bench: HON'BLE MR. JUSTICE S. RAVINDRA BHAT,HON'BLE MR. JUSTICE A. K. CHAWLA2 pages
AI SummaryDismissed

What did the High Court hold?

The High Court dismissed the Revenue's appeal, finding that no substantial question of law arose. The Court noted that the ITAT's decision was primarily based on a previous ruling by the Uttarakhand High Court in Director of Income Tax (IT) vs. Sedco Forex International Drilling Inc. & Others. Furthermore, the Court observed that a subsequent decision by a Division Bench of the Delhi High Court in Yoshio Kubo vs. Commissioner of Income Tax, 357 ITR 452 (Del), also supported the assessee's position. Consequently, the High Court concluded that the issue urged by the Revenue in favor of the assessee was covered by these precedents. The appeal was dismissed without delving into the merits of the specific facts beyond acknowledging the ITAT's reliance on case law. No issue was left undecided.

What were the facts?

The Revenue, in its appeal under Section 260A of the Income Tax Act, challenged an order of the Income Tax Appellate Tribunal (ITAT). The ITAT had upheld the decision of the Commissioner of Income Tax (Appeals) which allowed the assessee's claim for exemption. The assessee, a non-resident working for a non-resident company, claimed an exemption of ₹1,53,75,770/- under Section 10(10CC) of the Act. This amount represented the tax liability borne by the assessee's employer. The Assessing Officer (AO) had initially brought this sum to tax in the hands of the assessee, but both the CIT(A) and the ITAT ruled in favor of the assessee.

What were the issues?

1. Whether the Tribunal erred in allowing exemption under Section 10(10CC) of the Income Tax Act, 1961, for the tax liability borne by the assessee's employer. Assessee's Contentions: The assessee argued that the amount paid by the employer towards the assessee's tax liability was not taxable in the hands of the assessee, relying on the exemption provided under Section 10(10CC). The assessee's plea was accepted by the CIT(A) and the ITAT. Revenue's Contentions: The Revenue challenged the ITAT's decision, contending that the exemption was wrongly granted. The Revenue's appeal to the High Court was based on the belief that a substantial question of law arose from the ITAT's order. The Revenue's specific arguments are not detailed in the judgment, but the appeal itself signifies their disagreement with the ITAT's interpretation of Section 10(10CC).

Which sections of the Income-tax Act were involved?

Section 260A,Section 10(10CC)

AI-generated summary — verify with the full judgment below

$~43 * IN THE HIGH COURT OF DELHI AT NEW DELHI + ITA 258/2018 THE COMMISSIONER OF INCOME TAX - INTERNATIONAL TAXATION -2

..... Appellant Through Mr. Ruchir Bhatia, Sr. Standing Counsel.

versus

PUNEET MAHAJAN

..... Respondent

Through None.

CORAM: HON'BLE MR. JUSTICE S. RAVINDRA BHAT HON'BLE MR. JUSTICE A. K. CHAWLA

O R D E R %

27.02.2018

The Revenue in its appeal under Section 260A of the Income Tax Act questions the order of the ITAT rejecting the Revenue’s appeal against an order of the CIT (A). The Assessee a non-resident working for a non- resident company, had claimed exemption under Section 10(10CC) of the Act to the tune of `1,53,75,770/-. This amount constituted the tax liability borne by the assessee’s employer. The AO had brought the sum to tax in the hands of the assessee. However, the CIT(A) and the ITAT accepted the assessee’s plea.

A reading of the Tribunal’s order would disclose that it primarily went back to the previous decision of the Uttrakhand High Court in Director of Income Tax (IT) vs. Sedco Forex International Drilling Inc. & Others,[(TS-603-HC- 2012 (UTT)]. This Court notices that a subsequent decision of the Division Bench of this Court

in Yoshio Kubo vs. Commissioner of Income Tax, 357 ITR 452 (Del) also covers the issue urged in favour of the assessee. Consequently, no substantial question of law arises.

The appeal is dismissed.

S. RAVINDRA BHAT, J

A. K. CHAWLA, J FEBRUARY 27, 2018 rc

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