Itat/308/2018 Of Principal Commissioner Of Income Tax -4, Kolkata v. M/S. Reliance Chemotex Industries Ltd

OD - 16 IN THE HIGH COURT AT CALCUTTASpecial Jurisdiction (Income Tax)ORIGINAL SIDE IA NO.GA/2/2018 (Old No.GA/3402/2018) ITAT/308/2018 PRINCIPAL COMMISSIONER OF INCOME TAX-4, KOLKATA -Versus-M/S. RELIANCE CHEMOTEX INDUSTRIES LTD. Appearance :Mr. P.K. Bhowmik,for the appellant. Mr. J.P. Khaitan, Sr. Adv.,Mr. Akhilesh Kumar Gupta, Adv.,Mr. Asim Chatterjee, Adv.,Mr. Soham Sen, Adv. for the respondent. BEFORE: The Hon’ble JUSTICE T.S. SIVAGNANAM -And- The Hon’ble JUSTICE HIRANMAY BHATTACHARYYA Date : 17[th] February, 2022. The Court : This appeal filed by the revenue under Section260A of the Income Tax Act, 1961 (the ‘Act’ in brevity) isdirected against the order dated 16[th] August, 2017 passed by theIncome Tax Appellate Tribunal, “A” Bench, Kolkata (the ‘Tribunal’in short) in ITA No.2041/Kol/2014 for the assessment year 2010-11. The revenue has raised the following substantial questions of law: (i) (ii) (iii) (iv) Whether on the facts and the circumstances of thecase, the Learned Tribunal has erred in law aswell as on fact and the impugned order is perversein holding that the assessing officer had made thedisallowance of Rs.42,65,989/- on account ofForeign Trade expenses by ignoring the assessingofficer had clearly analysed the foreign travelexpenses and allowed the foreign travel expenseswhich were spent for the business purpose?Whether on the facts and the circumstances of thecase, the Learned Tribunal has erred in law aswell as on fact and the impugned order is perversein confirming the order of the CIT(Appeals)therebydeletingthedisallowancesofRs.12,45,778/-onaccountofadditionaldepreciation made by the assessing officer withoutciting any cogent reason merely by stating thatthe findings of the CIT (Appeals) was not rebuttedby the department before it whereas the fact wasthat the department relied on the finding made bythe assessing officer in the assessment order?Whether on the facts and the circumstances of thecase, the Learned Tribunal has erred in law aswell as in fact by restricting the disallowanceunder Section 14A of the Income Tax Act, 1961 readwith Rule 8D of the Income Tax Rules, 1962contrary to the provisions of the section?Whether on the facts and the circumstances of thecase, the Learned Tribunal has erred in law aswell as in fact and the impugned order is perversein confirming the order of the CIT (Appeals)thereby deleting the addition of Rs.3,73,78,133/- on account of commission to foreign and Indianagent by holding that the assessee had paidcommission and brokerage for procurement of salewithout appreciating the fact that the assesseehad failed to provide documents/evidence insupportofsuchservicesactuallyprovided/discharged by the agents? We have heard Mr. P.K. Bhowmik, learned standing counselfor the appellant/revenue and Mr. J.P. Khaitan, learned seniorstanding counsel for the respondent/assessee. On carefully going through the order passed by theTribunal, we find that the tribunal has affirmed the order passedby the Commissioner of Income Tax (Appeals) – XX [CIT(A)] whichhas deleted the addition made by the assessing officer on threeissues, namely, foreign travel expenses, claim for additionaldepreciation and commission to foreign and Indian agents. Theother issue was with regard to the restricting the disallowanceunder Section 14A of the Act read with Rule 8D of the Income TaxRules, 1962. On the first three issues we find that the tribunal hasmade a thorough factual exercise and took note of the documentsand details noted by the CIT(A) and granted relief. With regard tothe commission paid to four entities abroad, the discussion on thesaid issue is in paragraph 5.3 of the impugned order. After notingthe details of the overseas commission paid to four parties, the On the first three issues we find that the tribunal hasmade a thorough factual exercise and took note of the documentsand details noted by the CIT(A) and granted relief. With regard tothe commission paid to four entities abroad, the discussion on thesaid issue is in paragraph 5.3 of the impugned order. After notingthe details of the overseas commission paid to four parties, the tribunal has referred to the documents and certificates in theform of paper book and came to the conclusion that the documentsconclusively proved that the commission agent has renderedservices to the assessee outside India. In paragraphs 5.3.2, 5.3.3and 5.3.4 the commission paid to the other agents abroad wereconsidered and after taking note of the facts the tribunal wassatisfied that the commissioner was right in granting relief tothe assessee. With regard to the commission paid to the Indianagents for export sales, the discussion is in paragraphs 5.3.6 and5.3.7. After noting the facts, the tribunal held that thecommission is not paid to any related party of the assessee. Thus,we find that no substantial question of law arises forconsideration on the three issues. With regard to the restrictionof disallowance under Section 14A of the Act, the tribunal hasdiscussed the said issue from paragraph 4.1 and after noting thefacts, directed the assessing officer to disallow only a sum ofRs. 1,486/- under Section 14A on the ground that the disallowanceunder the said provision cannot exceed the exempt income. We find no error in approach of the tribunal. Thus, weare satisfied that no question of law much less substantialquestion of law arises for consideration in this appeal. In the result, the appeal filed by the revenue standsdismissed. With the dismissal of the appeal, the connectedapplication stands closed. (T.S. SIVAGNANAM, J.) (HIRANMAY BHATTACHARYYA, J.) S.Das/pa.