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IN THE HIGH COURT OF DELHI
Manmohan, Manmeet Pritam Singh Arora, JJ.
Principal Commissioner of Income Tax - Appellant
Versus
Marubeni Itochu Steel India Pvt. Ltd. - Respondent
ITA 374 of 2022
Decided On : 28-09-2022
| Table of Content |
|---|
| 1. appeal against itat order. (Para 1) |
| 2. errors in assessment of activities and cost base. (Para 2 , 4) |
| 3. pending decisions and their implications. (Para 3 , 5 , 6) |
| 4. no substantial question of law. (Para 7) |
| 5. final decision subject to supreme court ruling. (Para 8) |
JUDGMENT
Manmohan, J. (Oral)--Present income tax appeal has been filed challenging the impugned order dated 30th October, 2019, passed by the Income Tax Appellate Tribunal (`ITAT') in ITA No. 6655/Del./2015 for Assessment Year 201112.
2. Learned counsel for the Appellant states that the ITAT has erred in not considering the description of the activities carried out by the assessee as being akin to that of a trader. He states that the ITAT has erred in rejecting the use of Free on Board (FOB) value in the cost base without appreciating that the same is relevant cost base for determining the ALP of the international transaction of the assessee with its AEs given the function performed, assets utilized, and risk undertaken by the assessee.
3. Admittedly, the questions of law urged in the present appeal are covered by the decisions of this Court in assessee's own case in ITA 94/2015 dated 23rd April, 2015 and ITA 376/2018 dated 4th April, 2018.
4. Learned Counsel for the Appellant states that the Revenue has not accepted the aforesaid decisions and has preferred Civil Appeal No.11882/2018 against the same.
5. Though the judgments of this Court have been challenged and are pending adjudication before the Supreme Court, yet there is no stay of the said judgments till date.
6. Consequently, in view of the judgments passed by the Supreme Court in Kunhayammed and Others vs. State of Kerala and Another, (2000) 6 SCC 359 and Shree Chamundi Mopeds Ltd. Vs. Church of South India Trust Association CSI Cinod Secretariat, Madras, (1992) 3 SCC 1, the present appeal is covered by the judgments passed by the learned predecessor Division Bench.
7. Accordingly, no substantial question of law arises for consideration in the present appeal and the same is dismissed.
8. However, it is clarified that the order passed in the present appeal shall abide by the final decision of the Supreme Court in the aforesaid Civil Appeal.
Pending Supreme Court decisions do not affect the applicability of existing judgments in lower courts unless stayed. This reinforces the principle of finality in judicial decisions.
The court upheld earlier judgments regarding tax exemption eligibility despite pending appeals, confirming adherence to precedent until legally stayed.
The absence of incriminating material does not preclude assessment under Section 153A, as established by existing judicial precedents.
The court upheld precedent time, reaffirming the classification of expenses while determining that appeals should be resolved in line with existing judicial decisions despite pending higher court rev....
The court held that notional forex losses can be deductible under Section 37(1) if conditions set by Supreme Court precedent are met, emphasizing that CBDT Circular is not applicable in this context.
The main legal point established in the judgment is the application of the Supreme Court judgment in determining the classification of income under the 'royalty' definition.
Transactions validated if conducted at arm's length; no additions justify if sales not disputed by assessing authority.
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