Smith International INC v. The Addl. Director of Income-tax - 2019-LL-0226-39

Citation	2019-LL-0226-39
Appellant Name	Smith International INC
Respondent Name	The Addl. Director of Income-tax
Court	HIGH COURT OF UTTARAKHAND AT NAINITAL
Relevant Act	Income-tax
Date of Order	26/02/2019
Judgment	View Judgment
Keyword Tags	substantial question of law • customs duty • reimbursement of expense • gross receipt
Bot Summary:	The substantial question of law, raised by the Assessee in this appeal, is whether reimbursement of expenses, towards customs duty paid by the Assessee, are to be included under Section 44BB of the Income Tax Act; and whether the Tribunal had erred in not following its own decision in the appellant s case for the Assessment Year 2006-07, and/or the binding judgment of this Court in DIT Vs. Schlumberger Asia Services Ltd. : 317 ITR 156. In the order under appeal, the Tribunal has only recorded that, after having heard both the parties, it was of the view that, under Section 44BB, gross receipts are to be considered. The Tribunal is the final court of facts, and an appeal under Section 260A of the Income Tax Act would lie only if the order of the Tribunal gives rise to a 2 substantial question of law. Failure on its part to consider relevant questions, both on facts and law, would give rise to a substantial question of law warranting interference in an appeal under Section 260A of the Income Tax Act. We are satisfied that the matter necessitates examination afresh by the Tribunal. The order under appeal is set aside, and the appeal before the Tribunal is restored to file. The Tribunal shall, with utmost expedition, decide the appeal afresh in accordance with law.

IN HIGH COURT OF UTTARAKHAND AT NAINITAL Income Tax Appeal No. 61 of 2014 M/s Smith International INC ...Appellant Vs. Addl. Director of Income Tax ...Respondent Mr. Porus Kaka, learned Senior Advocate assisted by Mr. Manish Kant and Mr. Chetan Joshi, learned counsel for appellant. Mr. Hari Mohan Bhatia, learned Standing Counsel for Income Tax- respondent. Dated: 26th February, 2019 Coram: Hon ble Ramesh Ranganathan, C.J. Hon ble Sudhanshu Dhulia, J. Hon ble Alok Singh, J. Ramesh Ranganathan, C.J. (Oral) This Appeal is preferred, under Section 260A of Income Tax Act, against order passed by Income Tax Appellate Tribunal, New Delhi in ITA No. 5287/Del/2010. substantial question of law, raised by Assessee in this appeal, is whether reimbursement of expenses, towards customs duty paid by Assessee, are to be included under Section 44BB of Income Tax Act; and whether Tribunal had erred in not following its own decision in appellant s case for Assessment Year 2006-07, and/or binding judgment of this Court in DIT Vs. Schlumberger Asia Services Ltd. : 317 ITR 156. 2. In order under appeal, Tribunal has only recorded that, after having heard both parties, it was of view that, under Section 44BB, gross receipts are to be considered. Tribunal has not even examined question whether reimbursement of customs duty, in accordance with terms and conditions of contract entered into between Assessee and ONGC, is liable to tax under Section 44BB of Income Tax Act. Tribunal is final court of facts, and appeal under Section 260A of Income Tax Act would lie only if order of Tribunal gives rise to 2 substantial question of law. Tribunal has failed to examine terms and conditions of contract, and has not assigned reasons for its conclusion that gross receipts (evidently including reimbursement of expenses towards customs duty) are to be considered under Section 44BB of Income Tax Act. Failure on its part to consider relevant questions, both on facts and law, would give rise to substantial question of law warranting interference in appeal under Section 260A of Income Tax Act. 3. We are satisfied, therefore, that matter necessitates examination afresh by Tribunal. order under appeal is set aside, and appeal before Tribunal is restored to file. Tribunal shall, with utmost expedition, decide appeal afresh in accordance with law. 4. appeal is, accordingly, disposed of. No costs. (Alok Singh, J.) (Sudhanshu Dhulia, J.) (Ramesh Ranganathan, C.J.) 26.02.2019 26.02.2019 26.02.2019 Rahul Smith International INC v. Addl. Director of Income-tax

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