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Income Tax Appellate Tribunal, DELHI BENCH “E” BENCH NEW DELHI
Before: SHRI N.K. SAINI & SHRI AMIT SHUKLA
ITA No. 3428/Del./2011 Assessment Year: 2003-04 IN THE INCOME TAX APPELLATE TRIBUNAL (DELHI BENCH “E” BENCH NEW DELHI) BEFORE SHRI N.K. SAINI ACCOUNTANT MEMBER & SHRI AMIT SHUKLA, JUDICIAL MEMBER ITA No. 3428/Del./2011 Assessment Year: 2003-04 ADIT Vs. Maersk Company Ltd. Intl. Taxation, C/o A.f. Furgusen & Co., 13A, Subhash Road, Aayakar Allahabad Bank Building, Bhawan, Dehradun 1st Floor, Bombay Samachar Marg, Fort Mumbai (Applicant) (Respondent) (PAN: )
Revenue by: Shri Rajesh Kumar, Sr. DR Assessee by: Shri Porus Kaka, Sr. Advocate Shri Manish Kanth, Advocate Shri Divesh Chawla, Advocate Date of hearing 18/04/2017 Date of pronouncement 24/04/2017
ORDER PER AMIT SHUKLA, JUDICIAL MEMBER: The aforesaid appeal has been filed by the revenue against impugned order dated 31.12.2010, passed by the ld. CIT (Appeals)-II, Dehradun for the A.Y. 2003-04 in relation to the proceedings/orders passed u/s 148/143(3). In the grounds of appeal the revenue has raised following grounds:-
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“1. That the ld. CIT (A) erred in appreciating that even after passing order u/s 154 there was still escapement of income of Rs. 19,14,583/- as the actual receipts of the assessee were Rs. 15,64,92,615/- as against declared receipts of Rs. 13,73,76,789/- which were increased to Rs. 14,24,00,000/- in the order u/s 154. 2. That the ld. CIT (A) erred in holding that the Assessing Officer did not have reasons to believe that income had escaped assessment. 3. That the ld. CIT (A) erred in holding that the Assessing Officer did not have reasons to believe that the income had escaped assessment. 4. The appellant prays for leave to add, amend, modify or alter any grounds of appeal at the time or before the hearing of the appeal.”
The brief facts are that, assessee is a non-resident company incorporated in United Kingdom. It had contract with ONGC for supply of platform supply vessel (PSV) in respect of which hire charges were received by Assessee Company. In the return of income filed on 1.12.2003, hire charges of Rs. 13,71,09,862/- was claimed as not taxable in India as it was claimed that assessee company did not had any PE in terms of Article 5 and therefore, its income cannot be taxed in India in terms of Article 7. It was stated that hire charges were computed on the basis of invoice received by ONGC, because the TDS certificate from ONGC had not been received. The assessment order u/s 143(3) was passed by the Assessing Officer determining the income of the assessee at Rs. 1,42,40,000/- by Page 2 of 8
holding that the assessee had an PE in India and thereby, its receipts was taxed in India and demand of Rs. 80,10,787/- was raised. The TDS credit of Rs. 95,962/- was given by the Assessing Officer which was filed along with the return of income and for the balance credit of TDS it was stated that when the assessee will furnish the TDS certificate same would be allowed. The assessee furnished the original TDS certificate which was verified from the ONGC. The Assessing Officer noted that the revenue earned by the assessee as per TDS was to the extent of Rs. 15,64,92,615/- which is more than what assessee had shown and accordingly, the assessee’s case was reopened u/s 147 by issuance of notice 148 dated 28.5.2007 after recording the following reasons as under:- “In this case assessment was completed at the income of Rs. 1,42.40,000/- u/s 143(3) of I.T. Act on 30.01.2006 against the return income of Rs. 4,26,058/-. During the year under consideration the assessee company had offered the revenues of Rs. 13,73,46,789/- with a note that invoices raised for hire charges outstanding as on 31.03.2003 and IDS there from are converted at the telegraphic transfer buying rate prevailing as on 31.03.2003 as the TDS certificates have not yet been received from ONGC. However while commuting hire charges Ac assesses has taken Pie revenues at Rs. 13,71,09,862./-. While completing the assessment these revenues were taken at Rs. 13,73,46,789/-. While completing the assessment u/s 143(3) A I.T. Act the then A.O. had mentioned in its office notes that the assesses company had claimed refund of Rs. 86,2 1,953/- as per return of income but TDS certificate of Rs. 95,962/- only were enclosed with the return of income. Credit to the extent of
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Pm. 85,55,991/- could not be allowed u/s 143(1). The credit of above TDS would be allowed when the assessee furnishes original 'TDS certificates’. The assessee has furnished the original TDS certificates which were got verified from ONGC Mumbai. As per this the revenues earn by the assessee are 15,64,92,615/-. Accordingly, the taxable profit would be 1,56,49,261/-. Resultantly amount of Rs. 1409261/- has escaped assessment.”
In this manner, the ld. Assessing Officer enhanced the hire charges at Rs. 15,64,92,615/- and tax was computed u/s 44BB @ 10%.
Before the Ld. CIT (Appeals) the following facts were brought on record by the assessee:- “5. A letter F No.ACIT(OSD)/R-1/DDN/RECOVERY/2006- 07 dated 8th May, 2006 / was issued in connection with the recovery of demand of Rs. Rs.80,10,787/-. In response thereto, your Appellant vide letter No.RKA/100 dated 19th May, 2006 filed a copy of the TDS certificate from ONGC. A copy of the letter No.RKA/100 dated 19th May, 2006 was handed over at the hearing on 8th June, 2010. 6. In the letter dated 19th May, 2006, it was pointed out that as the figures of income and TDS as per the certificate did not reconcile with the figures of income and TDS as per the annexure to the certificate, the higher income of Rs.15,64,92,615/- be considered and credit be granted for TDS amounting to Rs.93,43,073/-. Further, a computation was appended demonstrating that on Page 4 of 8
considering the income and TDS amounts at Rs.156,492,615/- and Rs.93,43,073/- respectively, the demand of Rs.80,10,787/- will be wiped off and in fact, a refund of Rs.31,69,441/- will be due to the Appellant. 7. A duly notarized and stamped indemnity bond was also furnished under cover of your appellant’s tax attorney letter no. W/MT/2187 dated 16th June, 2006. 8. It appears that based on a representation, letter No.RKA/100 dated 19th May 2006, an order has been issued under Section 154 of the Act, determining a refund of Rs.31.25,715/- after considering the income from ONGC at P.s. 155.492,615/-. 9. Though the Appellant had not then received the order issued under Section 154. an intimation dated 6th February, 2007 issued under Section 245 of the Act was received, proposing to adjust the the refund of Rs.31,25,715/- against the outstanding demand of Maersk Company Limited as agent of A.P.Moller Maersk A/s, A copy of the intimation dated 6th February, 2007 was handed over at the hearing on 8th June, 2010.”
The Learned CIT(Appeals) after considering the assessee’s objections, held that, firstly, the reassessment has been passed without disposing of objections; secondly, there is no “reasons to believe” that the income chargeable to tax has escaped assessment; and lastly, the Assessing Officer has accepted the higher figure of received from the ONGC in his order passed u/s 154. Thus, Ld. CIT(A) held that not only the reopening and passing of reassessment order is bad in law and also held that already Assessing Officer has Page 5 of 8
accepted by the higher figure received from ONGC in his order u/s 154.
Before us the Ld. Sr. Counsel, Shri Porus Kaka submitted that without going into aspects validity of reopening, it is quite apparent from the record that the TDS certificate in Form No. 16A issued by ONGC dated 29.5.2003, it can be seen that they have included receipts pertaining to earlier assessment year. The period which should to be taken into cognizance by the Assessing Officer for the impugned AY is the period 1.04.2002 to 31.03.2003. The amount paid of Rs. 15,64,92,615/- as mentioned in the TDS certificate includes an amount of Rs. 4,46,77,980/- which was the payment relating as on 31.3.2002 which has already been taxed by the AO u/s 143(3) in his order dated 18.1.2004. Thus, there is no occasion to take the same income again in the assessment year 2003-4 on the basis of the said TDS certificate.
On the other hand the ld. DR submitted that the matter can be sent back to the Assessing Officer for proper verification.
After considering the rival submissions and on perusal of the impugned order as well as the material placed on record, we find that the entire basis for reopening the assessment order is that, the revenue of the assessee as per the TDS certificate dated 29.5.2003 issued by ONGC at Rs.15,64,92,615/- should be considered and the figure on which earlier assessment has been framed is not correct. From the perusal of the said TDS certificate and details of the payment mentioned therein, we find that there is one payment of Rs.4,64,73,960/- has been mentioned to be relating to 31.03.2002, Page 6 of 8
i.e., pertaining to A.Y. 2002-03. This amount as pointed out by the Ld. Sr. Counsel, stands assessed by the Assessing Officer in the A.Y. 2002-03 in the order passed u/s 143(3) dated 18.10.2004. Once, the amount outstanding as on 31.3.2002 as mentioned in the TDS certificate has been taxed in the A.Y. 2002-03, then there remains no basis for holding that this amount has been left to be taxed in the A.Y. 2003-04 at the time of passing of the original assessment order. Thus, on this ground alone, we find that there cannot be any ‘reason to believe’ for reopening the assessment u/s 147 and taxing the additional revenue which already stands assessed and taxed in the earlier assessment year. Accordingly, the ground raised by the revenue is dismissed.
Order pronounced in the open court on 25.04.2017.
(N.K. SAINI) (AMIT SHUKLA) ACCOUNTANT MEMBER JUDICIAL MEMBER Dated: 25.04.2017
Narender Copy forwarded to: 1) Appellant 2) Respondent 3) CIT 4) CIT (Appeals)
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5) DR: ITAT ASSISTANT REGISTRAR
Date Draft dictated on 21 .04.2017 Draft placed before author 24.04.2017 Draft proposed & placed before the second member Draft discussed/approved by Second Member. Approved Draft comes to the 25 .4.2017 Sr.PS/PS Kept for pronouncement on File sent to the Bench Clerk 25 .4.2017 Date on which file goes to the AR Date on which file goes to the Head Clerk. Date of dispatch of Order.
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