Director Income Tax (International Taxation) Delhi-Ii New Delhi v. M/S Hyundai Heavy Industries Co. Ltd. …

IN THE HIGH COURT OF UTTARAKHAND AT NAINITALINCOME TAX APPEAL NO. 34 OF 2010 Director Income Tax (International Taxation) Delhi-II New Delhi. ……....Appellant Versus M/s Hyundai Heavy Industries Co. Ltd. …..Respondent. Mr. Hari Mohan Bhatia, Advocate for the appellant. Mr. P.R. Mullick, Advocate for the respondent. Coram: Hon'ble K.M. Joseph, C.J.Hon'ble V.K. Bist, J.K.M. Joseph, C.J. (Oral) The Appeal was admitted on the second substantial question of law, which is as follows: “Whether I.T.A.T. is justified, in the facts and circumstances of the case, in holding that the reopening of the assessment by the Assessing Officer for assessment year 1995-96 was invalid and consequently the impugned addition by application of higher rate of tax, as applicable to foreign companies, could not have been made while framing the reassessment under Section 147/148 of the Income Tax Act.” 2. Appellant is the Revenue. The assessment year relates to 1995-96. The assessment was completed on a business income by applying the tax rate as applicable to Indian / Domestic Companies, i.e. at 46 per cent. The Assessing Officer, thereafter, noticed that for assessment year 1995, no TDS was made on the salary paid to the technicians and the sum was not allowable as business expenditure under Section 40(a) and, therefore, action was taken under Section 148 of the Income Tax Act (hereinafter referred to as ‘the Act’). The ground for re-opening the assessment is that the interest income under Section 244A of the Act has escaped assessment, but in completing the assessment, the Assessing Officer applied the higher rate of tax, namely, at 55 per cent as being the rate applicable to the foreign companies. The Tribunal vide impugned order has found that that theissue of applying the higher rate of tax on the business income of the respondent assessee was not supportable as no such ground was taken for re-opening the matter under Section 147 of the Act. We have not been shown any cause by the learned counsel for the appellant for disturbing the said view taken by the Tribunal. 3. We answer the aforesaid substantial question of law against the Revenue. Consequently, the Appeal will stand dismissed. (V.K. Bist, J.) (K.M. Joseph, C.J.) 05.08.2014 Rathour