Ita/75/2000 Of The Commissioner Of Income Tax, Cochin v. M/S.kerala Agro Machinery, Corpn Ltd

IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE C.N.RAMACHANDRAN NAIR & THE HONOURABLE MR. JUSTICE K.M.JOSEPH TUESDAY, THE 7TH NOVEMBER 2006 / 16TH KARTHIKA 1928 ITA.No. 75 of 2000 ------------------------- ITA.827/COCH/1995 of I.T.A.TRIBUNAL,COCHIN BENCH .................... APPELLANT/APPELLANT: ------------------------------------ THE COMMISSIONER OF INCOME-TAX, COCHIN. BY ADV. SRI.P.K.R.MENON(SR.),SC FOR IT SRI.GEORGE K. GEORGE, SC FOR IT RESPONDENT/RESPONDENT: ----------------------------------------- M/S. KERALA AGRO MACHINERY CORPORATION LTD.ATHANI - 683 585. (NO REPRESENTATION) THIS INCOME TAX APPEAL HAVING BEEN FINALLY HEARD ON 07/11/2006, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: C. N. RAMACHANDRAN NAIR & K. M. JOSEPH, JJ. -------------------------------------------- I.T. APPEAL NO.75 OF 2000 -------------------------------------------- Dated this the 7[th] day of November, 2006 JUDGMENT C. N. Ramachandran Nair, J. Even though notice was served on respondent/assessee,there is no appearance. Therefore, we proceed to hear thestanding counsel for appellant and dispose of the Appeal. 2. Question raised in this Appeal filed against the order of the Income Tax Appellate Tribunal disposing of the Income TaxAppeal for 1992 - 1993, is whether the payments made byassessee to Government as service charges for services renderedby Government to the Company is an allowable businessexpenditure. Tribunal, following another order, allowed theclaim. Moreover, the appeal was disposed of along with theappeal by assessee for the year 1991 - 1992 against which I.T.A.No.70/00 was filed in this Court. Standing Counsel produced common Judgment of this Court in ITR No.20/98 and connectedcases which include ITA No.70/00 which was filed against thevery same common order of Tribunal, under challenge in thisappeal. This Court found that different Benches of the Tribunalwith co-ordinate jurisdiction have taken divergent views in thematter. The cases were accordingly disposed of with a directionto the Tribunal to re-consider the matter afresh. It is not knownwhether the matter was heard or disposed of by tribunal again.In any case, since the connected case ITA No.70/00 isremanded to the Tribunal, and since the Tribunal has notconsidered the facts relevant for this case separately, we feel thiscase also should be remanded. We find from the first appellateauthority's order that various services rendered by Governmentthrough its Agricultural Department which promotes sales ofpower tiller manufactured by respondent/assessee areconsidered. However, other services rendered, like Government nominees managing the affairs of the Company bybeing members of the Board, Government incentives given tothe agriculture sector through subsidies, loans etc. formodernisation of the agriculture sector which promotes sale ofpower tiller manufactured by petitioner are not seen consideredin detail. In such circumstances, we set aside the order ofTribunal and remand the matter back to the Tribunal for re-consideration. We make it clear that the Tribunal should givefresh opportunity to the assessee to furnish more detailspertained to detailed service rendered by Government for whichthe Company has paid service charges based on the demand byGovernment. Tribunal is directed to dispose of the appeal alongwith connected appeals, if not already disposed of. If theTribunal has already disposed of other Appeals withoutconsidering relevant aspects mentioned above, then they will dispose of this appeal separately with reference to theobservations mentioned above. The I.T. Appeal is disposed of as above. C. N. RAMACHANDRAN NAIR, JUDGE K. M. JOSEPH, JUDGE kbk. C. N. RAMACHANDRAN NAIR & K. M. JOSEPH, JJ. I.T.APPEAL NO.75 OF 2000 JUDGMENT 7[th] November, 2006