CENTRAL BOARD OF DIRECT TAXES NEW DELHI Vs. OBEROI HOTELS INDIA PRIVATE LIMITED

JUDGEMENT

(1.) Central Board of Direct Taxes (CBDT) is in appeal. It is aggrieved by the judgment dated May 29, 1981 of a Division Bench of the Delhi High Court quashing its non approval under Section 80-O of the Income-tax Act, 1961 (for short 'the Act') to an agreement dated November 29, 1969 entered into by the respondent with M/s. Soaltee Hotel Pvt. Ltd. Kathmandu (Nepal) a foreign enterprise. Section 80-O is as under :

(2.) As required by Section 80-O, the respondent sought approval of the agreement as falling within the purview of the section. CBDT declined to grant approval. However, it did not communicate any ground as to on what basis approval was not granted. Respondent filed a writ petition in the Delhi High Court, it being Civil Writ Petition No. 1301 of 1975. The writ petition was allowed by a Division Bench of the Delhi High Court on January 5, 1979 with a direction to the CBDT to consider the matter afresh and give a decision after granting hearing to the respondent. This order of the Division Bench is reproduced hereunder :

(3.) After that respondent represented its case before CBDT but again CBDT did not find any ground under the Section to approve the agreement and by order dated February 26, 1980, communicated its decision to the respondent. We reproduce the relevant portion of this order of CBDT as under : (pages 63-64 of the PB)