Itat/185/2022 Ia No. Ga/1/2022, Ga/2/2022 Principal Commissioner Of Income Tax - 1 Kolkata v. Nissin Abc Logistics (P) Limited

OD – 3 IN THE HIGH COURT AT CALCUTTASPECIAL JURISDICTION (INCOME TAX)ORIGINAL SIDE ITAT/185/2022IA NO. GA/1/2022, GA/2/2022PRINCIPAL COMMISSIONER OF INCOME TAX - 1 KOLKATAVersusNISSIN ABC LOGISTICS (P) LIMITED BEFORE :THE HON’BLE JUSTICE T.S. SIVAGNANAMAndTHE HON’BLE JUSTICE HIRANMAY BHATTACHARYYADated : NOVEMBER 15, 2022. Appearance:Mr. Tilak Mitra, Adv.…for appellantMr. J. P. Khaitan, Sr. Adv.Mr. A. Gupta, Adv.Mr. I. Banerjee, Adv.…for respondent GA/1/2022 The Court :- We have heard Mr. Tilak Mitra, learned standing Counsel for theappellant and Mr. J. P. Khaitan, learned Senior Counsel for the respondent. There is adelay of 210 days in filing this appeal. We have perused the affidavit filed in support ofthe petition and found sufficient cause has been shown for condonation of delay. Accordingly, the application is allowed and the delay in filing the appeal iscondoned. ITAT/185/2022 This appeal filed by the revenue under Section 260A of the Income Tax Act, 1961(the Act) is directed against the order passed by the Income Tax Appellate Tribunal “B”Bench Kolkata dated 10[th] August, 2021 in ITA No. 473Kol/2020 for the assessment year 2014-15. The revenue has raised the following substantial questions of law forconsideration:- i.WHETHER the Learned Tribunal has erred in allowing the disallowance ofRs.7,85,93,661/- made under section 40(a)(i) of the Income Tax Act, 1961by the AO on account of payment made to International Freight ForwardingAgents (i.e. it related companies) ?Rs.7,85,93,661/- made under section 40(a)(i) of the Income Tax Act, 1961by the AO on account of payment made to International Freight ForwardingAgents (i.e. it related companies) ? ii.WHETHER the Learned Tribunal has erred in deciding the present caserelying on the facts and circumstances of the assessee’s own case for theassessment year 2010-2011, ignoring the facts that each and everyassessment is distinct and is made on different facts and circumstances ?relying on the facts and circumstances of the assessee’s own case for theassessment year 2010-2011, ignoring the facts that each and everyassessment is distinct and is made on different facts and circumstances ? We have heard Mr. Tilak Mitra, learned standing Counsel for the appellant andMr. J. P. Khaitan, learned Senior Counsel for the respondent. The learned Tribunal had dismissed the revenue’s appeal by following theassessee’s own case for the assessment year 2010-11 wherein a similar disallowanceunder Section 40(a)(i) was upheld by the Tribunal vide order dated 5[th] April, 2019 in ITANo. 649/Kol/2017 holding that the amount paid by the assessee company toInternational Freight Forwarding Agent was neither covered under Section 9(1)(i) norunder Section 9(1)(vii) of the Act and the same, therefore, did not construe the income asdeemed to occur or arise in India in the Memorandum of Grounds of Appeal. Thedepartment has indirectly accepted that no appeal as against the order passed for theassessment year 2010-2011 was filed before this Court. That same plea raised in secondsubstantial question of law is that each and every assessment is distinct and differentand, therefore, the learned Tribunal ought not to have followed the decision in assessee’sown case for the assessment year 2010-2011. Though it may be true that eachassessment year is an independent unit yet the theory of maintaining a consistent breach is well settled. This theory should be breached only if the department hasdistinguishing features both on facts as well as on law. From the impugned order passedby the learned Tribunal we find that the learned Tribunal has taken note of the decisionof the Commissioner of Income Tax (Appeals) (CITA) for the assessment year 2010-2011which was in favour of the assessee. There is nothing on record to indicates that the factsituation for the assessment year 2010-11 is materially different or in any mannerdifferent from the assessment year under consideration, i.e. A.Y. 2014. That apart wefind that the learned Tribunal had examined the entire factual position and gonethrough the agreement and thereafter tested the correctness of the argument of therevenue on the ground that the foreign companies are related parties. The learnedTribunal did not agree with the said condition since on facts it noted that those foreigncompanies are independent legal entities in foreign countries and they have no businessactivity nor any permanent establishment in India and, therefore, cannot automaticallyhave business connection in India just because they are related parties. The revenue hasnot been able to dislodge the factual finding recorded by the Tribunal in its order. Thuswe find that there is no question of law much less substantial question of law arises forconsideration in this appeal. Accordingly, the appeal fails and dismissed. (T.S. SIVAGNANAM, J.) (HIRANMAY BHATTACHARYYA, J.)