TMI Blog2016 (10) TMI 505X X X X Extracts X X X X X X X X Extracts X X X X ..... t of case). In any case, the present Reference has been made in view of the Reference made for the Assessment Year 1982-83 and only with a view to maintain consistency. The attempt on the part of the Applicant-Assessee is to enlarge the scope of the question which has been referred to us for our opinion by the Tribunal. The issue which has been referred to us for our opinion, is not with regard to allocation of expenditure on a prorata basis but the issue is whether deduction has to be allowed on the basis of the gross receipts or on that part of the receipts which form part of total income of the Applicant-Assessee, i.e. on application of Section 80AB of the Act. - Decided in favour of assessee. - Income Tax Reference No. 61 of 2000 - - - Dated:- 13-10-2016 - M. S. Sanklecha And S. C. Gupte, JJ. Mr. Sunil Lala with Ms. Nikita Panhalkar and Ms. Rajshree Lala, for the Applicant None for the Respondent JUDGMENT ( Per M.S. Sanklecha, J. ) None appears on behalf of the Revenue. The Applicant has filed an affidavit of service, indicating completion of service upon the Revenue on 6th April, 2000. 2 This Reference under Section 256(1) of the Income Tax Act, 19 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Boda Co. Pvt. Ltd. of June 1994 refers to the decision of the Supreme Court in Coninenal Construction Ltd., (supra), but does not refer to the provisions of section 80AB. It referred to the earlier decision in the case of Boda Co., the decision of the Supreme Court in Distributors (Baroda) Pvt.Ltd. (supra) and to the decision of the Tribunal in Expo Machinery Ltd. vs. I.A.C. (1989) 31 I.T.D. 41, which was concerned with the deduction under section 80HHA and 80HHB and held the section80AB was in applicable for calculating deduction under section 80HHA and 80 HHB. Section 80-O states where the gross total income of an assessee being an India company... includes an income by way of royalty, commission, fees or any similar payment received by the assessee..... and such income is received in convertible foreign exchange in India, there shall be allowed in accordance with and subject to the provisions of this section a deduction of an amount equal to 50 per cent of the income so received in India in computing the total income of the assessee. Section 80HHB states where the gross total income of an assessee being an Indian Company includes any profits and gains derived from the bu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... one would be deemed to be the amount of income of that nature which is derived or received by the assessee and included in the gross total income. Therefore, there is no way of superseding the provisions of section 80AB which has been considered by the Tribunal in the case of the assessee for the assessment year 198283. In addition, as observed by the Madras High Court in S. Devraj (supra) the principle of stare decisis would come into operation and therefore, in view of the opinion of the High Court having been sought, it would be only proper to maintain consistency in the conclusion. We accordingly hold that the assessee would be entitled to deduction after deducting corporate expenses, which would have to be taken into account in computing the income according to the provisions of this Act, which would be necessary to comply with the provisions of section 80AB of the Act. 3. For the assessment year 198283 in R.A. No.1866/Bom/1993 the assessee had sought identical question for reference along with one other question and the same was referred for the valued opinion of the Hon'ble High Court vide Statement of the Case dated 31.10.1994. In the light of the above, the ques ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on 29th April, 2008). The Apex Court was considering the issue of payment of additional taxes due to restricting the benefit of Section 80-O of the Act while doing adjustment under Section 143 (1)(a) of the Act. The Assessing Officer, while making adjustment, sought to restrict the benefit of Section 80-O of the Act only to net receipts, i.e. after reducing the expenses incurred to earn that (Section 80-O) income. The Apex Court held that at the relevant time, i.e. during the Assessment Years 1996-97 and 1997-98, in view of conflicting interpretation in respect of section 80-O of the Act, prima facie, adjustment to restrict a claim under Section 80-O of the Act, resulting in demand of additional tax, was not permissible. 8 In fact, this controversy was first resolved by this Court in the context of Section 80-O of the Act only in CIT v/s. Asian Cable Corporation Ltd., (No.2) 262 ITR 537. The Court in the above case held that income earned in foreign exchange for services rendered, has to be allowed on net basis, inter alia, on application of Section 80AB of the Act. 9 It may be pointed out that the Apex Court in A. M. Moosa v/s. CIT 294 ITR 1 has held that Section 80AB of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 82-83 and only with a view to maintain consistency. The attempt on the part of the Applicant-Assessee is to enlarge the scope of the question which has been referred to us for our opinion by the Tribunal. The issue which has been referred to us for our opinion, is not with regard to allocation of expenditure on a prorata basis but the issue is whether deduction has to be allowed on the basis of the gross receipts or on that part of the receipts which form part of total income of the Applicant-Assessee, i.e. on application of Section 80AB of the Act. 13 As held by the Apex Court in CIT v/s. Ansuya Devi 68 ITR 750, in a Reference, the High Court may only answer the question which is referred to it. New question cannot be raised by the Court. At the very highest, we can in a reference, reframe the question so as to clear some ambiguity or bring out the real dispute. No such occasion to reframe the question arises in this case. 14 In the above view, the question as raised at the instance of the Applicant-Assessee by the Tribunal is answered in the affirmative i.e. against the Applicant-Assessee and in favour of the Respondent-Revenue. This in view of the decision of this Court in ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
