- (1.) CIVIL Appeal No. 4485 of 2007 with Civil Appeal No. 4502 of 2007, Civil Appeal No. 4497 of 2007, Civil Appeal No. 4498 of 2007, Civil Appeal Nos. 4499 -4501 of 2007, Civil Appeal No. 4495 of 2007, Civil Appeal No. 4496 of 2007, Civil Appeal Nos. 4486 -87 of 2007, Civil Appeal Nos. 4488 -4489 of 2007 and Civil Appeal No. 4492 of 2007 This order shall dispose of the aforesaid appeals as the point involved is the same, For the sake of convenience, the facts are taken from Civil Appeal No. 4485 of 2007.
(2.) ASSESSEE -respondent, hereinafter referred to as 'the assessee' filed its return of income for the assessment year 1992 -93 declaring income of Rs. 4,30,06,580 by showing its business as investment and finance, which was processed under Section 143(1)(a) of the Income Tax Act, 1961 (hereinafter referred to as 'the Act')on 18th Jan., 1996 on the same income. Along with the return the assessee claimed refund amounting to Rs. 29,16,660 on the basis of credit of deemed TDS on dividend received from a Malaysian company i.e. Pan Century Edible Oils SDN, BHD, Malaysia. The assessing officer raised a demand of Rs. 1,07,370 after rejecting the credit claimed by the assessee on the basis of deemed credit on dividend received from the aforesaid Malaysian company. Being aggrieved, assessee filed an appeal before the Commissioner (Appeals) which was accepted. Revenue thereafter filed appeal before the Income -tax Appellate Tribunal (hereinafter referred to as 'the Tribunal'). The Tribunal disposed of the appeal with the observation that Double Taxation Avoidance Agreement (hereinafter referred to as 'DTAA') entered into by the Government of India with the Government of Malaysia would override the provisions of the Act if they are at variance from the provisions of the Act. It was held that from a plain reading of Article 11 of the DTAA, it was clear that dividend income would be taxed only in the contracting states where such income accrued.
(3.) AGGRIEVED by the order of the Tribunal, the department filed further appeal in the High Court of Madhya Pradesh at Indore Bench which was admitted on the following questions of law: 1. Whether Tribunal was justified in holding that dividend income earned by the assessee amounting to Rs. 21,35,766 from a company called Pan Century Edible Oils SDN, BHD, Malaysia is not liable to be taxed in the hands of assessee in India under any of the provisions of the Income Tax Act ? 2. In view of Section 5(1)(c) of the Income Tax Act, whether the finding recorded by the Tribunal that income earned out of dividend from the Company outside the country is not liable to be taxed under the Act ? 3. Whether Tribunal was justified in law in recording a finding on an issue which was not raised by the assessee either before the assessing officer or before the Commissioner (Appeals) but was raised for the first time before the Tribunal and that too in an appeal filed by the department ? 4. Having dismissed the cross objection filed by the assessee, whether the Tribunal was justified in then proceeding to decide the issue raised by the assessee on merits in their favour.;