Itxa/1330/2016 Of Pr. Commissioner Of Income Tax-1 v. Nyk Line (India) Ltd

IN THE HIGH COURT OF JUDICATURE AT BOMBAYORDINARY ORIGINAL CIVIL JURISDICTION INCOME TAX APPEAL NO. 1330 OF 2016 Pr. Commissioner of Income Tax-1 .. Appellant v/s. M/s. NYK Line (India) Ltd... Respondent Mr. Suresh Kumar a/w Ms. Sumandevi Yadav for the appellant Mr. Niraj Sheth I/b Atul Jasani for the respondent CORAM : AKIL KURESHI & M.S. SANKLECHA, J.J. P.C. DATED : 4[th] FEBRUARY, 2019 1.The Revenue is in appeal against the judgment of the Income TaxAppellate Tribunal (“the Tribunal” for short) raising following questionsfor our consideration :- (i)Whether on the facts and in the circumstances of the caseand in law, the Tribunal was right in deleting the addition madeby the Assessing Officer on account of Container DetentionCharges (CDC) pertaining to the relevant assessment year,without appreciating the expenditure on collection CDC arealready debited to the P & L Account? (ii)Whether on the facts and in the circumstances of the caseand in law, the Tribunal was right in deleting the addition made by the Assessing Officer on account of Container DetentionCharges (CDC), which is in the nature of reimbursement ofexpenditure incurred by the assessee agent to collect CDC onbehalf of the principal? 2.Identical issues come up for consideration before this Court inIncome Tax Appeal No. 1497 of 2016 concerning this very assessee as arespondent. The Revenue's appeal came to be dismissed by makingfollowing observations :- “2.The respondent assessee is a shipping agent providing suchservices to its principal one NYK Japan. The assessee in the processof providing such services in India to such foreign base company,receives commission. The dispute between the assessee and theRevenue revolves around the Container Detention Charges (“CDC”for short). The assessee under peculiar circumstances of the case,though received certain amounts for and on behalf of principal, didnot offered to tax immediately on the ground that there was delayin holding such sums on behalf of the principal. It is only under aletter dated 25[th] May, 2009 written by the principal, according tothe assessee, that the income accrued to the assessee. The assessee,therefore, accounted for such income in the return filed forAssessment Year 2010-11. This related to the entire period fromthe year 1993 onwards. The Revenue argues that such incomeshould be taxed in each separate year during which such chargeswere collected. The Tribunal however, hold in favour of the assesseeinter alia observing that the income accrued to the assessee onlyupon the principal writing said letter on 25[th] May, 2009. 3.Quite apart from the view of the Tribunal being plausible onthe facts of the case, we also note that the assessee has alreadyoffered the entire income to tax in the Assessment Year 2010-11.The Revenue's attempt at taxing such income in respect of individualyear has failed on several occasions since the reopening of assessment was not permitted. We wonder whether in suchcircumstances, it is even be prudent for the Revenue to pursue thisline. Additionally, we record the statement of the Counsel for theassessee that in order to protect the assessee against doubletaxation, the assessee has filed appeal before the Tribunal inrelation to Assessment Year 2010-11 and kept the question oftaxing the entire income in the said year alive so that in case theRevenue succeeds in the present appeal and similar otherproceedings, the assessee can atleast protect itself from being taxedall over again for Assessment Year 2010-11. He stated oninstructions that if the Revenue is not allowed to shift the incomethis year, the assessee would not press its appeal before the Tribunalon this ground for Assessment Year 2010-11. 4.Under the circumstances, no question of law arises. 5.The tax appeal is dismissed.” 6.The issues being identical, without giving separate reasons, thisappeal is also dismissed.