The Director Of Income Tax(International Taxation)-Ii v. M/S.linklaters

bsb IN THE HIGH COURT OF JUDICATURE AT BOMBAYORDINARY ORIGINAL CIVIL JURISDICTION INCOME TAX APPEAL NO.1156 OF 2011 The Director of Income Tax(International Taxation)-II … Appellant v/s M/s.LINKLATERS … Respondent Mr.Arvind Pinto for the appellant. Mr.J.D. Mistry, senior advocate with Mr.Anay Banhatti and Ms.Sweta Rajan i/by Madhur R. Baya for the respondent. CORAM: S.C. DHARMADHIKARI & G.S. KULKARNI, JJ. DATED : 30TH APRIL, 2014 P. C. : 1This is an appeal by the revenue. It is stated to be raising a substantial question of law. The appeal is filed although the final order of the Income Tax Appellate Tribunal dated 16[th] July, 2010 is not adverse to the revenue. The revenue has succeeded in the appeal before the Tribunal and yet these proceedings are initiated. 2Mr.Pinto, learned counsel appearing on behalf of the revenue submits that the appeal before the Tribunal raises several questions. One of them was, whether the partnership firm is eligible for treaty benefits in the source country even though it is not taxable in its own right in residency country ? The finding on this issue is against the revenue. The revenue, therefore seeks to question it and by invoking this Court's jurisdiction under Section 260A of the Income Tax Act, 1961. 3On a question as to how under Section 260A of the Act an appeal would lie only against a finding on any issue and rendered by the Tribunal during the course of the proceedings, all that is submitted is that, eventually such finding partakes the character of a order and in the given facts and circumstances this appeal be entertained. 4We are unable to agree. The final order of the Tribunal is challenged by the assessee and we have admitted assessee's appeal being Income Tax Appeal No.6834 of 2010. This itself indicates and demonstrates that the revenue has succeeded before the Tribunal. If the final order of the Tribunal is neither adverse to the revenue nor can be said to be against it, then, on a finding simplicitor on one of the issues in this case, we do not wish to entertain this appeal. That would multiply the number of appeals and from the same proceedings. 5Relying upon the judgment of the Hon'ble Supreme Court in the case of S. Nazeer Ahmed v/s State Bank of Mysore & ors., reported in A.L.R.(2007) SC 989 and drawing analogy from the principles laid down in paragraph 7 thereof, we clarify that in the absence of cross appeal or cross-objection and during the course of argument on the assessee's appeal, it would be open for the revenue to challenge the finding of the Income Tax Appellate Tribunal on the issue of taxability of partnership in the source country or in the country of residency. Without any substantive appeal or cross-objections the revenue can support the final order of the Tribunal but while supporting it can question the finding on the issue referred by us above. With this clarification and keeping open all contentions of parties, we dispose of this appeal. The appeal is disposed of accordingly. (G.S. KULKARNI, J.) (S.C.DHARMADHIKARI, J.)