The Commissioner Of Income Tax-Iv, Nagpur v. Shri Sanjaykumar Narayandas Saraf

IN THE HIGH COURT OF JUDICATURE AT BOMBAYNAGPUR BENCH AT NAGPUR INCOME TAX APPEAL NO.106/2010 The Commissioner of Income Tax-IV, Nagpur...Versus...Shri Sanjaykumar Narayandas Saraf - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - Office Notes, Office Memoranda of Coram, Court's or Judge's ordersappearances, Court's orders of directionsand Registrar's orders - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - Shri Anand Parchure, Advocate for appellant Shri K.P. Dewani, Advocate for respondent CORAM : SMT. VASANTI A. NAIK AND MRS. SWAPNA JOSHI, JJ.DATE: 12.07.2016 By this Income Tax Appeal, the appellant -Department challenges the order of the Income Tax AppellateTribunal, dated 26.6.2009 dismissing the appeal of theDepartment and upholding the order of the Commissioner ofIncome Tax (Appeals) deleting the addition of Rs.08,32,04,200/-made by the Assessing Officer under Section 68 of the Income TaxAct. The respondent – assessee is a non-resident, who hadremitted money from his foreign bank account to Indian bankaccount during the relevant period. The Assessing Officer madean addition of Rs.08,32,04,200/- under Section 68 of the Act byrejecting the claim of the assessee that the assessee had receivedthe said amount towards consultancy charges for rendering the services outside India for three corporate entities. The order ofthe Assessing Officer was challenged by the respondent – assesseebefore the Commissioner of Income Tax (Appeals) and theCommissioner of Income Tax (Appeals) allowed the appeal filedby the assessee. It was held that no addition could have beenmade by the Assessing Officer, as it was duly proved by theassessee that the assessee had received the said amount towardsconsultancy charges for rendering the services outside India forthe different corporate entities. Being aggrieved by the order ofthe Commissioner of Income Tax (Appeals), the Department hadfiled the appeal before the Income Tax Appellate Tribunal. TheTribunal, by the impugned order, dated 26.6.2009 dismissed theappeal filed by the Department. The Department has filed thisIncome Tax Appeal against the order of the Commissioner ofIncome Tax (Appeals) and the Income Tax Appellate Tribunal. On hearing the learned Counsel for the parties andon a perusal of the orders of the Commissioner of Income Tax(Appeals) and the Income Tax Appellate Tribunal, it appears thatthere is no scope for interference with the orders. TheCommissioner of Income Tax (Appeals) as well as the IncomeTax Appellate Tribunal, have properly assessed the evidence onrecord and have recorded a finding of fact that the assessee hadreceived the aforesaid amount towards the consultancy chargesfor rendering the services out of India. While holding so, theAuthorities observed that the money was admittedly remittedfrom the foreign bank account to the account of the assessee inIndia. The Commissioner of Income Tax (Appeals) and theTribunal recorded that the companies to which the respondent – On hearing the learned Counsel for the parties andon a perusal of the orders of the Commissioner of Income Tax(Appeals) and the Income Tax Appellate Tribunal, it appears thatthere is no scope for interference with the orders. TheCommissioner of Income Tax (Appeals) as well as the IncomeTax Appellate Tribunal, have properly assessed the evidence onrecord and have recorded a finding of fact that the assessee hadreceived the aforesaid amount towards the consultancy chargesfor rendering the services out of India. While holding so, theAuthorities observed that the money was admittedly remittedfrom the foreign bank account to the account of the assessee inIndia. The Commissioner of Income Tax (Appeals) and theTribunal recorded that the companies to which the respondent – assessee provided the consultancy services are the tax residentsof Mauritius and are old corporate entities existing for more thana decade. The Tribunal further found that not only the corporateentities, to which the assessee provided the consultancy services,were registered in the countries out of India but they had alsoissued confirmation letters in support of the services rendered bythe assessee to them, outside India and that the amount ofRs.08,32,04,200/- was received by the assessee towards theconsultancy charges, that were paid by them to the assessee. TheTribunal found that there was material on record to show thatthe assessee visited the countries, where the corporate offices ofthe companies to which the consultancy services were providedby the assessee are located for providing services to them. It wasobserved that the corporate entities, to which the services wererendered, were holding the tax residency certificates from theconcerned Income Tax Authorities. In this background, theCommissioner of Income Tax (Appeals) and the Tribunalrecorded a clear finding of fact that the assessee had beensuccessful in establishing that he is a non-resident, who hadreceived the consultancy fees from the companies located outsideIndia, that was deposited in the foreign bank and then remittedto the account of the assessee in India. After having held so, theCommissioner of Income Tax (Appeals) and the Tribunal heldthat the provisions of Section 68 of the Act could not have beeninvoked, in the circumstances of the case. Since the findings recorded by the Commissioner ofIncome Tax (Appeals) and the Income Tax Appellate Tribunal arepure findings of facts and since they do not give rise to a substantial question of law, we dismiss the Income Tax Appealwith no order as to costs. JUDGEJUDGE Wadkar