Itxa/1745/2010 Of Director Of Income Tax (Internatioal Taxation), Mumbai v. Charbonnages De France International Sa, Mumbai

IN THE HIGH COURT OF JUDICATURE AT BOMBAY ORDINARY ORIGINAL CIVIL JURISDICTIONINCOME TAX APPEAL (L) NO.2873 OF 2008 The Director of Income Tax ..Appellant. V/s. Charbonnages De. France ..Respondent. Mr. Parag A. Vyas for appellant. Mr. J.D. Mistry with A.K. Jasani for respondent. CORAM : V.C.DAGA AND J.P.DEVADHAR, JJ. DATED : 6TH JULY, 2009. P.C. :- 1.Heard learned counsel fot the revenue and the respondents. The question sought to be raised reads as under:- 1. Whether on the facts and in circumstances of the case and in law without considering the retrospective insertion of the explanation to section 9 the ITAT was justified in holding that the technical fees received by the respondents were not subject to tax in India ? without considering the retrospective insertion of the explanation to section 9 the ITAT was justified in holding that the technical fees received by the respondents were not subject to tax in India ? 2. Whether on the facts and in circumstances of the case and in law after the retrospective insertion of the explanation to section 9, the law laid down by the decision of the Hon'ble Supreme Court of India in the case of Ishikawajima Harima Heavy Industries Ltd. V/s. Director of Income Tax reported in 288 ITR 408(SC) has changed ?the retrospective insertion of the explanation to section 9, the law laid down by the decision of the Hon'ble Supreme Court of India in the case of Ishikawajima Harima Heavy Industries Ltd. V/s. Director of Income Tax reported in 288 ITR 408(SC) has changed ? 2.The Tribunal has recorded the findings of fact in para 23 reading as under:- " The other undisputed facts are that the assessee has no establishment in India and that the entire preparation and finalization of feasibility report was carried outside India. The entire information etc. was provided by CICCO. Under these facts and circumstances, the issue that is to be seen, is whether section 5(2) and section 9(1)(vii) of Act are attracted. Once we reach the conclusion that section 5 sub-section (2_, section 9(1)(vii) of Act apply, then only recourse should be taken to the Double Taxation Avoidance Agreement. When it is admitted that the entire services are rendered outside India and when only payment is made out of India then it cannot be held that the income of the assessee as is received or accrued in India, so as to bring the income to tax under the Indian Income Tax Act. " 3.The Tribunal has relied upon the judgment of the Apex Court in the case of Ishikawajima-Harima Heavy Industries Ltd. V/s. Director ofIncome Tax reported in 288 ITR 408 (SC). 4.Learned counsel for the respondent submits that in view of the amendment in section 9 of the I.T. Act, 1961 with retrospective effect after the -judgment of the Apex Court in the case of IshikawajimaHarima HeavyIndustries Ltd. V/s. Director of Income Tax (supra), this Court had occasion to consider the very same issue in the case of Clifford Chance V/s. DeputyCommissioner of Income Tax reported in (2009) 221 CTR (Bom) 1. In this view of the matter and considering the findings of fact recorded by the Tribunal, we do not see any substantial question of law involved in this appeal. The appeal is, therefore, dismissed in limini with no order as to costs. (J.P.DEVADHAR, J.) (V.C.DAGA, J.)