THE COMMISSIONER OF INCOME TAX vs. M/S ABBEY BUSINESS SERVICES

1 IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 6TH DAY OF JULY 2021 PRESENT THE HON’BLE MR. JUSTICE ALOK ARADHE AND THE HON’BLE MR.JUSTICE HEMANT CHANDANGOUDAR I.T.A. NO.421 OF 2015 BETWEEN: 1. THE COMMISSIONER OF INCOME-TAX C.R. BUILDING, QUEENS ROAD BANGALORE. 2. THE DY. COMMISSIONER OF INCOME-TAX CIRCLE-1(2) RASHTROTHANA BHAVAN NRUPATHUNGA ROAD BANGALORE-560001.

... APPELLANTS (BY SRI. K.V. ARAVIND, ADV.,) AND: M/S. ABBEY BUSINESS SERVICES (INDIA) PVT., LTD., THE RESIDENCY, 7TH FLOOR 133/1, RESIDENCY ROAD BANGALORE 560025 PAN:AAFCA 0037R.

... RESPONDENT (BY SRI. HIMANSU SHEKAR SINHA, ADV.,) - - -

2 THIS I.T.A. IS FILED UNDER SECTION 260-A OF I.T. ACT, 1961 ARISING OUT OF ORDER DATED 18.07.2012 PASSED IN ITA NO.41/BANG/2010, FOR THE ASSESSMENT YEAR 2006-07, PRAYING TO:

I. FORMULATE THE SUBSTANTIAL QUESTIONS OF LAW STATED ABOVE. II. ALLOW THE APPEAL AND SET ASIDE THE ORDER PASSED BY THE ITAT, BANGALORE IN

ITA NO.41/BANG/2011 DATED:18.07.2012 AND CONFIRM THE ORDER OF THE APPELLATE COMMISSIONER CONFIRMING THE ORDER PASSED BY THE DEPUTY COMMISSIONER OF INCOME-TAX, CIRCLE-11(1), BANGALORE. THIS I.T.A. COMING ON FOR FINAL HEARING, THIS DAY, ALOK ARADHE J., DELIVERED THE FOLLOWING: JUDGMENT Mr.K.V.Aravind, learned counsel for the revenue. Mr.Himanshu Shekar Sinha, learned counsel for the respondent. 2. This appeal under Section 260-A of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’, for short) has been filed by the revenue. The subject matter of the appeal pertains to the Assessment Year 2006-07. The appeal was admitted by a Bench of this Court on the following substantial questions of law: "a) Whether the Tribunal was correct in holding that the disallowance made u/s.40(a)(i)

3 for non-deduction of tax on payment made to abbey National Plc., UK., in not liable to TDS u/s.195 of the Act and consequently the said payments are not laible for disallowance u/s.40(a)(i) of the Act? b) Whether the Tribunal was correct in allowing relief to the assessee holding that the reimbursement of salary costs and other expenditure was without any profit element and hence cannot be regarded as income chargeable in the hands of Abbey National Plc., UK under Article 13 of the India-UK Treaty, without properly appreciating the nature and content of the transactions with reference to the provisions of section 195 and section 40(a)(i) of the Act?" 2. When the matter was taken up today, learned counsel for the assessee submitted that the aforesaid substantial questions of law have already been answered in favour of the assessee by judgment dated 01.12.2020 passed in ITA Nos.214/2014 and 215/2014. It is also urged that the appeal filed by the revenue is barred by limitation and no application for condonation of delay has been filed. Therefore, the appeal itself cannot be entertained. In support of aforesaid submission, reliance has been placed on

4 the decision of Full Bench of Delhi High Court in 'COMMISSIONER OF INCOME TAX Vs. ODEON BUILDERS P. LTD.' 393 ITR 27. 3. Learned counsel for the revenue was unable to point out as to why the judgment in ITA Nos.214/2014 and 215/2014 does not apply to the facts of this case. 4. We have heard the learned counsel for the parties at length and we find that the aforesaid questions of law have already been answered in favour of the assessee by judgment dated 01.12.2020 passed in ITA Nos.214/2014 and 215/2014. 5. For the reasons assigned in the aforesaid judgment, the substantial questions of law are answered against the revenue and in favour of the assessee. 6. The question whether or not the appeal is barred by limitation, is kept open and the parties are granted liberty to adjudicate the same in an appropriate proceeding.

5 In the result, we do not find any merit in the appeal and the same is hereby dismissed. Sd/- JUDGE Sd/- JUDGE RV