Principal Commissioner Of Income Tax, Kolkata -2 v. Batlivala And Karani Securities India Pvt. Ltd

OD-2 ORDER SHEETITAT/327/2017IA NO: GA/1/2017(Old No:GA/3123/2017)GA/2/2017 (Old No:GA/3124/2017)IN THE HIGH COURT AT CALCUTTASpecial Jurisdiction (Income Tax)ORIGINAL SIDE PRINCIPAL COMMISSIONER OF INCOME TAX, KOLKATA -2VSBATLIVALA AND KARANI SECURITIES INDIA PVT. LTD BEFORE: The Hon'ble JUSTICE T. S. SIVAGNANAM And The Hon’ble JUSTICE HIRANMAY BHATTACHARYYA Date : 29 November, 2021 Appearance:Mr. S. Lamba, Adv.…For the Appellant Mr. A. Agarwal, Adv.Mr. F. Ghoffar, Adv.…For the Respondent The Court : This appeal of the revenue filed under Section 260A of the Income Tax Act (the ‘Act’ in brevity) is directed against the order dated 8[th] July,2016 passed by the Income Tax Appellate Tribunal, B-Bench, Kolkata (the‘Tribunal’) in ITA Nos.1234 & 1235/Kol/2013 for the assessment years 2008-09and 2009-10. The revenue has raised the following substantial questions of law forconsideration : “(a)Whether in the facts and in the circumstances of the case and inlaw the payment to non-residence subsidiary for expansion of business outside India can be treated as business expenditure or it can be treated asfees for technical services under section 40(a) (iii) of the Income Tax Act? (b)Whether in the facts or in law of the case the Hon’ble Tribunalwas justified in computing u/s.44DA(1) when the foreign subsidiary have nopermanent establishment in India, its income from the said transactionwould not be computed u/s.44DA(1)? (c)Whether the Ld. Tribunal erred in law in holding that theassessee company was not liable to deduct TDS on the technical service feespayment and deduction of the same as expenses is not allowed as perprovisions of Section 40(a)(i) of Income Tax Act, 1961.” We have heard Mr. Lamba, learned counsel for the appellant/revenueand Mr. Agarwal, learned counsel for the respondent/assessee. The learned counsel appearing for the appellant/revenue, oninstruction, submitted that the revenue cannot pursue this appeal on account oflow tax effect. This submission is placed on record on the ground of low taxeffect. Accordingly, the appeal stands dismissed. The substantial questions of laware left open. With the dismissal of the appeal, the connected application also stands dismissed. (T. S. SIVAGNANAM, J.) (HIRANMAY BHATTACHARYYA, J.)