TMI Blog2009 (12) TMI 952X X X X Extracts X X X X X X X X Extracts X X X X ..... et the major terms of the contract, in so far as they are relevant for our decision on this issue, are mutatis mutandis similar. The learned Departmental Representative failed to invite our attention towards any clause of the instant contract by which departure is required from the view taken by the Tribunal in the immediately preceding year. We find that the Central Board of Direct Taxes vide Circular No.7 of 2009 dated 22.10.2009 has withdrawn Circular No.23 dated 23.7.169 and also Circular No. 786 dated 7.2.2000. According to para 3 of this Circular No.7 of 2009 the earlier circular No.23 dated 23.7.1969 is withdrawn with immediate effect . Similar is the fate for Circular No. 786. It, therefore, becomes clear that the Circulars on which the Tribunal has placed reliance while deciding the case for assessment year 1997-98 in assessee's own case hold good for the instant year as well. It is axiomatic that a Circular in operation through the assessment year 1998-99 cannot be held to be in-operational simply by reason of the fact that it has been withdrawn in the year 2009. The withdrawal of such Circulars will be effective only after the said date of 22 October, 2009 by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... MBER For the Petitioner : Narendra Singh For the Respondent : Nitesh Joshi ORDER R.S. SYAL:- 1. These two appeals by the Revenue and equal number of Cross Objections by the assessee relate to assessment years 1998-99 and 1999-2000. Since some of the issues raised in these appeals and cross objections are similar, we are, therefore, disposing them off by this consolidated order for the sake of convenience. Assessment Year : 1998-99:- 2. First two grounds of the Revenue's appeal are against the deletion of addition made by the Assessing Officer amounting to ₹ 49,26,42,023 by computing profit at 5% of the turnover of ₹ 9,85,28,40,467 arising from the supply of equipment to GPEC. 3. Briefly stated the facts of these two grounds are that the assessee-company entered into two contracts with Gujarat PowerGen Energy Corporation Limited (GPEC). First relating to supply of material/equipment for consideration of DM 713 millions and the second relating to design and engineering of erection material/equipment for consideration of DM 32 millions. Both the contracts were entered into on 12.5.1994. During the year under consideration the assess ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 997-98 drew support from Circular No.23 dated 23.7.1969 para 3 of which has been extracted at page 16 of its order. Further reference has been made in Circular No.786 dated 7.2.2000. We find that the Central Board of Direct Taxes vide Circular No.7 of 2009 dated 22.10.2009 has withdrawn Circular No.23 dated 23.7.169 and also Circular No. 786 dated 7.2.2000. According to para 3 of this Circular No.7 of 2009 the earlier circular No.23 dated 23.7.1969 is withdrawn with immediate effect . Similar is the fate for Circular No. 786. It, therefore, becomes clear that the Circulars on which the Tribunal has placed reliance while deciding the case for assessment year 1997-98 in assessee's own case hold good for the instant year as well. It is axiomatic that a Circular in operation through the assessment year 1998-99 cannot be held to be in-operational simply by reason of the fact that it has been withdrawn in the year 2009. The withdrawal of such Circulars will be effective only after the said date of 22 October, 2009 by which these Circulars have been withdrawn 'with immediate effect'. Accordingly we hold that issuance of Circular no. 7 of 2009 withdrawing the Circular no. 23 o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... .2009. Following the precedent we uphold the impugned order on this issue. 9. First two grounds of the cross objection of the assessee read as under:- (1) In the event the Departments Ground Nos.1 and 2 are allowed, then the Commissioner of Income-tax (Appeals)-XXXI, Mumbai (hereinafter referred to as the CIT(A)) be directed to deal with the alternative contentions raised before him as to the manner and the quantum of income that was assessable in India. (2) The CIT(A) erred in holding that the ground no.9 was not pressed during the course of the proceedings. He failed to appreciate that what was submitted was that in case his findings were in favour of the respondents in respect of ground nos. 3 and 4, ground no.9 would not survive for adjudication. 10. From the subject matter of the grounds itself it is apparent that the decision on this will be required only if the Departmental grounds nos.1 and 2 are accepted. In view of our decision on these two grounds of the Departmental appeal, which have been dismissed supra, we hold that no decision is required on the these two grounds raised by the assessee in its cross objection. These, therefore, stand dismissed as i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ) for taxing royalty and fees for technical services on receipt basis instead of accrual basis. Here again we find that the facts and circumstances of this ground are similar to those considered and decided by us in assessment year 1998-99 supra. Following the same we hold that the royalty and fees for technical services should be taxed in the hands of the assessee on receipt basis. 18. Ground no.3 reads as under:- The respondents submit that the CIT(A) had no jurisdiction to uphold a protective addition and he ought to have decided whether the income was to be taxed on an accrual basis or on a cash basis. 19. It is observed that the assessee sought computation of royalty and fees for technical services on accrual basis at ₹ 30,34,85,521 against the income of ₹ 73,27,64,030 on receipt basis. The Assessment Officer held that such income was to be taxed on accrual basis. He however, in view of the conflict between the assessee and Revenue on this issue in earlier years, taxed the income by way of royalty and fees for technical services on cash basis on protective basis as the said amount was higher in this year. The learned CIT(A) approved the action of the A ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
