| The Tax Publishers2020 TaxPub(DT) 2447 (SC) : (2020) 315 CTR 0217 : (2020) 272 TAXMAN 0275 INCOME TAX ACT, 1961
Section 80-O
Where assessee was engaged in providing services to foreign buyers of frozen seafood and/or marine products, it was held that services of assessee were nothing but of an agent, who was procuring merchandise for its foreign principals and such services by assessee as agent were rendered in India, income received by assessee in foreign exchange did not qualify for deduction under section 80-O.
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Deduction under section 80-O - Royalty receipts from foreign enterprises - Conditions precedent - Assessee, whether marine product procuring agent ineligible for deduction
Assessee was engaged in providing services to foreign buyers of frozen seafood and/or marine products and received service charges from foreign buyers/enterprises in foreign exchange. It claimed deduction under section 80-O. AO denied such claim for deduction on allegation that services rendered by assessee were 'services rendered in India, and not 'services rendered from India' and, therefore, service charges received by assessees from the foreign enterprises did not qualify for deduction in view of clause (iii) of the Explanation to section 80-O. Held: High Court held that assessee was merely marine product procuring agents for the foreign enterprises, without any claim for expertise capable of being used abroad rather than in India and thus, services rendered by assessee did not qualify as 'services rendered from India' for the purpose of section 80-O. To bring any particular foreign exchange receipt within ambit of section 80-O for deduction, it must be a consideration attributable to information and service contemplated by section 80-O. Merely for having a contract with a foreign enterprise and mere earning foreign exchange does not ipso facto lead to application of section 80-O. Therefore, services of assessee were nothing but of an agent, who was procuring merchandise for its foreign principals and such services by assessee as agent were rendered in India, income received by assessee in foreign exchange did not qualify for deduction under section 80-O.
Affirmed:CIT v. Ramnath and Co. 2016 TaxPub(DT) 4557 (Ker-HC)Distinguished:CIT v. B. Suresh (2009) 313 ITR 149 (SC) : 2009 TaxPub(DT) 1519 (SC) Abhiram Singh v. C.D. Commachen (Dead) By Lrs. & Ors. 2017(2) SCC 629 JB. Boda and Company (P) Ltd. v. CBDT (1997) 223 ITR 271 (SC) : 1997 TaxPub(DT) 0851 (SC) EPW. Da Costa & Anr. V. UOI (1980) 121 ITR 751 (Delhi) : 1980 TaxPub(DT) 0560 (Del-HC)Followed:Commr. of Cus. (Import) v. M/s. Dilip Kumar and Company & Ors. (2018) 9 SCC 1 : 2018 TaxPub(EX) 737 (SC) UOI v. Wood Papers Ltd. (1990) 4 SCC 256 : 1990 TaxPub(EX) 0432 (SC) B.L. Passi v. CIT (2018) 404 ITR 19 (SC) : 2018 TaxPub(DT) 1993 (SC) Continental Construction Ltd. v. CIT (1992) 195 ITR 81 (SC) : 1992 TaxPub(DT) 1016 (SC)
REFERRED : CIT & Anr. v. M/s. Yokogawa India Ltd. (2017) 391 ITR 274 (SC) : 2016 TaxPub(DT) 5139 (SC) CCE v. M/s. Hari Chand Shri Gopal (2011) 1 SCC 236 (SC) : 2010 TaxPub(EX) 2201 (SC) M/s. Liberty India v. CIT (2009) 9 SCC 328 : 2009 TaxPub(DT) 2027 (SC) CIT v. Baby Marine Exports 2007 TaxPub(DT) 1126 (SC) IPCA Laboratory Ltd. v. Dy. CIT (2004) 266 ITR5 21 (SC) : 2004 TaxPub(DT) 1472 (SC) Sea Pearl Industries & Ors. etc. v. CIT 2001 (127) ELT 649 (SC) : 2001 TaxPub(EX) 0276 (SC) K Ravindranathan Nair v. CIT (2001) 247 ITR 178 (SC) : 2001 TaxPub(DT) 0871 (SC) Central Board of Direct Taxes and others v. Oberoi Hotels (India) (P) Ltd. (1998) 231 ITR 148 (SC) : 1998 TaxPub(DT) 1277 (SC) Sun Export Corporation v. Collector of Customs (1997) 6 SCC 564 (SC) : 1997 TaxPub(EX) 1016 (SC) Bajaj Tempo Ltd. v. CIT (1992) 196 ITR 188 (SC) : 1992 TaxPub(DT) 1271 (SC) Collector of Central Excise v. Parle Exports (P) Ltd. (1989) 1 SCC 345 : 1988 TaxPub(EX) 0895 (SC) CWT v. Officer-in-Charge (Court of Wards) (1976) 105 ITR 133 (SC) : 1976 TaxPub(DT) 0825 (SC) CIT v. Raja Benoy Kumar Sahas Roy (1957) 32 ITR 466 (SC) : 1957 TaxPub(DT) 0152 (SC) CIT v. M/s. Chakiat Agencies (P) Ltd. (2009) 314 ITR 200 (Mad) : 2009 TaxPub(DT) 1579 (Mad-HC) Li and Fung India (P) Ltd. v. CIT (2008) 305 ITR 105 (Delhi) : 2008 TaxPub(DT) 1762 (Del-HC) CIT v. Khursheed Anwar (2009) 311 ITR 468 (Mad) : 2009 TaxPub(DT) 0133 (Mad-HC) CIT v. Inchcape India (P) Ltd. (2005) 273 ITR 92 (Delhi) : 2005 TaxPub(DT) 0861 (Del-HC) CIT v. Mittal Corporation (2005) 272 ITR 87 (Delhi) : 2005 TaxPub(DT) 0856 (Del-HC) Godrej and Boyce Manufacturing Co. Ltd. v. S.B. Potnis, Chief CIT & Ors. (1993) 203 ITR 947 (Bom) : 1993 TaxPub(DT) 0608 (Bom-HC) CIT v. Thomas Kurien (2012) 72 DTR 263 (Ker) : 2012 TaxPub(DT) 2606 (Ker-HC) Searle (India) Ltd. v. CBDT & Anr. (1984) 145 ITR 673 (Bom) : 1984 TaxPub(DT) 0325 (Bom-HC) Eastman Consultants (P) Ltd. v. CBDT & Anr. (1981) 132 ITR 637 (Bom) : 1981 TaxPub(DT) 0894 (Bom-HC) Capt. KC. Saigal. V. ITO (1995) 54 ITD 488 (Delhi) : 1995 TaxPub(DT) 1210 (Del-Trib)
FAVOUR : Against the assessee
A.Y. : 1993-94 to 1997-98
IN THE SUPREME COURT OF INDIA
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