RAMNATH & CO. Vs. COMMISSIONER OF INCOME TAX
LAWS(SC)-2020-6-32
SUPREME COURT OF INDIA
Decided on June 05,2020

Ramnath And Co. Appellant
VERSUS
COMMISSIONER OF INCOME TAX Respondents


Referred Judgements :-

CCE V. PARLE EXPORTS (P) LTD. [REFERRED TO]
CAPT. K. C. SAIGAL VS. INCOME TAX OFFICER [REFERRED TO]
CIT V. YOKOGAWA INDIA LTD. [REFERRED TO]
CCE V. HARI CHAND SHRI GOPAL [REFERRED TO]
COMMISSIONER OF WEALTH TAX ANDHRA PRADESH VS. OFFICER IN CHARGE COURT OF WARDS PAIGAH [REFERRED TO]
UNION OF INDIA VS. WOOD PAPERS LIMITED [REFERRED TO]
CONTINENTAL CONSTRUCTION LIMITED VS. COMMISSIONER OF INCOME TAX CENTRAL 1 [REFERRED TO]
BAJAJ TEMPO LIMITED BOMBAY VS. COMMISSIONER OF INCOME TAX BOMBAY CITY 111 BOMBAY [REFERRED TO]
J B BODA AND COMPANY PVT LIMITED VS. CENTRAL BOARD OF DIRECT TAXES NEW DELHI [REFERRED TO]
SUN EXPORT CORPORATION BOMBAY VS. COLLECTOR OF CUSTOMS BOMBAY [REFERRED TO]
CENTRAL BOARD OF DIRECT TAXES NEW DELHI VS. OBEROI HOTELS INDIA PRIVATE LIMITED [REFERRED TO]
K RAVINDRANATHAN NAIR VS. COMMISSIONER OF INCOME TAX ERNAKULAM [REFERRED TO]
SEA PEARL INDUSTRIES VS. COMMOSSIONER OF INCOME TAX COCHIN [REFERRED TO]
IPCA LABORATORY LTD VS. DEPUTY COMMISSIONER OF INCOME TAX MUMBAI [REFERRED TO]
COMMISSIONER OF INCOME TAX THIRUVANANTHAPURAM VS. BABY MARINE EXPORTS KOLLAM [REFERRED TO]
COMMR OF INCOME TAX-IV VS. B SURESH [REFERRED TO]
E P W DA COSTA VS. UNION OF INDIA [REFERRED TO]
COMMISSIONER OF INCOME TAX VS. INCHCAPE INDIA P LTD [REFERRED TO]
LI AND FUNG INDIA P LTD VS. COMMISSIONER OF INCOME TAX NEW DELHI [REFERRED TO]
GODREJ AND BOYCE MFG COMPANY LIMITED VS. POTNIS S B COMMISSIONER OF INCOME TAX CHIEF [REFERRED TO]
COMMISSIONER OF INCOME TAX PONDICHERRY VS. KHURSHEED ANWAR DOLPHIN HOUSE 236 MISSION STREET PONDICHERRY [REFERRED TO]
COMMISSIONER OF INCOME TAX VS. CHAKIAT AGENCIES (P) LTD. [REFERRED TO]
COMMISSIONER OF INCOME TAX VS. MITTAL CORPORATION [REFERRED TO]
ABHIRAM SINGH VS. C.D. COMMACHEN (DEAD) BY LRS. & ORS. [REFERRED TO]
B L PASSI VS. COMMISSIONER OF INCOME TAX, DELHI [REFERRED TO]
COMMISSIONER OF CUSTOMS (IMPORT), MUMBAI VS. DILIP KUMAR AND COMPANY [REFERRED TO]



Cited Judgements :-

SANJEEVKUMAR VS. UNION OF INDIA [LAWS(BOM)-2022-4-83] [REFERRED TO]


JUDGEMENT

DINESH MAHESHWARI,J. - (1.)Leave granted.
(2.)The short point calling for determination in these appeals against the common judgment dated 09.06.2016 passed by the High Court of Kerala at Ernakulam in a batch of appeals is as to whether the income received by the appellants in foreign exchange, for the services provided by them to foreign enterprises, qualifies for deduction under Section 80-O of the Income Tax Act, 1961 [Hereinafter also referred to as "the Act of 1961" or "the Act"], as applicable during the respective assessment years from 1993-94 to 1997-98.
(3.)Put in a nutshell, the question involved in these appeals has arisen in the backdrop of facts that the appellants herein, who had been engaged in providing services to certain foreign buyers of frozen seafood and/or marine products and had received service charges from such foreign buyers/enterprises in foreign exchange, claimed deduction under Section 80-O of the Act of 1961, as applicable for the relevant assessment year/s. In both these cases, the respective Assessing Officer/s ["AO" for short] denied such claim for deduction essentially with the finding that the services rendered by respective assessees were the "services rendered in India" and not the "services rendered from India" and, therefore, the service charges received by the assessees from the foreign enterprises did not qualify for deduction in view of clause (iii) of the Explanation to Section 80-O of the Act of 1961. After different orders from the respective Appellate Authorities, the Income Tax Appellate Tribunal ["ITAT" for short], Cochin Bench accepted the claim for such deduction under Section 80-O of the Act with the finding in case of the assessee Ramnath and Co. [Related with the appeal arising out of SLP (Civil) Nos. 23535-23538 of 2016] for the assessment year 1993-94 that as per the agreements with the referred foreign enterprises, the assessee had passed on the necessary information which were utilised by the foreign enterprises concerned to make a decision either to purchase or not to purchase; and hence, it were a service rendered from India. The same decision was followed by ITAT in the case of this assessee for other assessment years under consideration as also in the case of other assessee M/s Laxmi Agencies [Related with the appeal arising out of SLP (Civil) No. 23699 of 2016]. The revenue preferred appeals before the High Court against the orders so passed by ITAT in favour of the present appellants as also a few other assessees. These appeals have been considered together by the High Court of Kerala; and similar questions regarding eligibility for deduction under Section 80-O of the Act in relation to the similarly circumstanced assessees have been decided by the impugned common judgment dated 09.06.2016. The High Court has essentially held that the assessees were merely marine product procuring agents for the foreign enterprises, without any claim for expertise capable of being used abroad rather than in India and hence, the services rendered by them do not qualify as the "services rendered from India", for the purpose of Section 80-O of the Act of 1961. Therefore, the High Court has allowed the appeals of revenue while setting aside the respective orders of ITAT. Aggrieved, the assessees have preferred these appeals[1]
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