Txa/11/2017 Of The Principal Commissioner Of Income Tax (Central) Bengaluru v. Trimurti Exports

Amrut IN THE HIGH COURT OF BOMBAY AT GOA TAX APPEAL NO.11 OF 2017 The Principal Commissioner of Income TaxVersusTrimurti Exports … Appellant …Respondent Mr K Aravin D, Senior Standing Counsel with Ms A Razaq, Junior Standing Counsel for the Appellant. Standing Counsel for the Appellant. Mr N Sardessai, Senior Advocate with Ms G Kamat & Mr G Panandikar, Advocates for the Respondent. Panandikar, Advocates for the Respondent. PC:- CORAM:G.S. PATEL & NUTAN D. SARDESSAI, JJDATED:11th October 2017 1.We have briefly heard both sides on the proposed substantialquestions of law. 2.As regards the question under Section 153A of the IncomeTax Act, 1961, our attention is drawn to paragraph 12 of the ITATorder. This is actually in two parts. The first part makes generalobservations in regard to the provisions of Section 153A and theproviso. The ITAT held that once reassessment is done underSection 153A, everything in the original assessment “would standeffaced”. We find that this is actually unrelated to the facts of thecase in regard to the addition of Rs. 50 lakh, since no evidence wasfound during a Section 132 search to serve as a foundation for theaddition of this amount of Rs.50 lakhs and further since the books of accounts of the assessee had also not been rejected. No defects werepointed out to substantiate and estimated addition. Thus, on thefacts the question would not arise but the apprehension correctlyexpressed is that the general observations, if left open, wouldconceivably affect other cases in future as well. 3.As regards the observations on the impact of Section 153A,Section 153A(b) and the proviso, we clarify that these questions arespecifically left open for determination in an appropriate proceedingand that the observations of the Tribunal in paragraph 12 cannotserve as precedent since they are without an appropriate factualcontext. No other substantial question of law arises. 4.As regards other questions in relation to a disallowance ofRs.1 lakh paid to the Comunidade of Tivim and the provisions ofSection 40(a)(ia) the ITAT noticed in paragraph 16 that theprovisions of Section 194I did not apply. This was one basis of itsdecision. The second basis was its reliance on decision of AllahabadHigh Court in the case of Vector Shipping Services Pvt Ltd, a decisionthat has been held not to be good law and has been overruled by theSupreme Court in the case of Palam Gas Service in 394 ITR 300. 5.Since the ITAT has given a dual basis for its finding, even ifthe second basis is incorrect, factually the first basis is not and thequestion could not in this case fairly be said to arise. We say thisbecause in a companion case the entirety of the finding is based onlyon the overruled judgment and in that case the question willundoubtedly arise. 6.The appeal is therefore rejected, with the above observations. NUTAN D. SARDESSAI J. G. S. PATEL J.