The main legal point established in the judgment is that for an assessee to be entitled to deductions under Section 80-O of the Income Tax Act, the services must be performed on foreign soil, and the assessees must provide material to support their claim for expertise capable of being used abroad rather than in India.

Dama Seshadri Naidu, J.

Introduction:

1. In this batch of Income Tax Appeals, an identical question of law arises: the scope and ambit of Section 80-O of the Income Tax Act (‘the Act’), as the provision was existing during the assessment year 1993-94.

2. Since all the other appeals have been decided based on the order of the Tribunal in the matter of the assessee who is the appellant in ITA No.132 of 2002, we shall refer to the facts of the said case for discussion and elucidation. Further, given a common question of law under identical fact situation arises, we also deem it appropriate to render a common judgment in all the appeals.

Facts:

3. The facts in brief, in the words of the appellant, are that ITA. No. 131/2002 & connected cases the appellant firm is an assessee engaged, mainly, in the business of providing commercial services to certain foreign enterprises. For the assessment year 1993-1994, the assessing officer disallowed the assessee's claim for deduction under Section 80-O of the Act on the premise that the assessee has not fulfilled the conditions laid down in the said provision. Aggrieved by the denial of deductions, the assessee filed an appeal. We may, however, add that in ITA No.437/2009, the dispute concerns the AY 1995-96.

4. Through Annexure-B order, the Appellate Authority upheld the assessee's claim and allowed the appeal declaring that the assessee is eligible for deduction under Section 80-O. Then, it was the turn of the revenue to assail Annexure-B appellate order before the Income Tax Appellate Tribunal (‘the Tribunal’). As seen, the Tribunal concurred with the Appellate Authority and rendered Annexure-C order dismissing the second appeal. Further aggrieved, the revenue has filed before this Court an appeal in ITA No.132 of 2002. Similarly, it has filed other appeals involving other assessees under identical circumstances.

Submissions:

Revenue’s:

5. In the above factual background, Mr. P.K.R. Menon, the learned Senior Counsel for the revenue, has taken us through Section 80-O of the Act as well as the agreements the respondent firm entered into with two foreign companies: Gelazur, a French Company; Hoko Fishing Co. Ltd., a Japanese Company.

6. The principal contention raised by the learned Senior Counsel is that the assessee is, straight and simple, an agent of the foreign enterprises procuring marine products from India; all its services are incidental to its main functioning as a fish procuring agent. He has further contended that the assessee rendered its services “in India”, contradistinguished with the expression “from India”, and as such the Tribunal has misdirected itself in affirming the findings of the Appellate Tribunal.

7. When faced with a query that both the companies to which the assessee has acted as an agent are situated outside India, the learned Senior Counsel would contend that mere communication between the assessee based in India and the principal based abroad does not bring their inter-se transactions within the purview of Section 80-O.

8. In the end, the learned Senior Counsel for the revenue has laid much emphasis on the phraseology employed in Annexures-D and E agreements between the assessee on one hand and the two foreign companies respectively on the other to hammer home his contention that the assessee was engaged as an agent to do a particular business in India on behalf of those foreign companies. To support his submissions, the learned Senior Counsel has placed reliance on the Commissioner of Income Tax v Thomas Kurien and another ITA No.254 of 2009, an unreported judgment, dt.08.02.2012, rendered by a learned Division Bench.

Assessees’:

9. Per contra, Mr. Pardi Wala, the learned Senior Counsel for the respondent-assessee has, to begin with, raised a technical plea concerning the maintainability of the appeals. According to him, the Government of India issued Circular No.21/15 dated 10th December 2015 deciding, as a matter of policy, not to file appeals/SLP's in cases whe