TaxTMI 
TaxTMI 
2019 (1) TMI 1690
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....ed 09/08/2004 on certain grounds of appeal. Revenue's Appeal, ITA No.2727/Mum/2004 2. The revenue has taken up following grounds of appeal: - 1. On the facts and in the circumstances of the case and in law, the CIT(A) has erred in directing the A.O. to modify the claim of the assessee u/s.80-0 treating the receipt of Rs. 3,96,86,123/- from Merrill Lynch Ltd. as fee received in consideration of the services rendered in terms of agreement dt. 23.3.1993 without appreciating the fact that the said amount was on account of co-lead manager and not for any commercial and technical services as specified u/s.80-0 of the Income-tax Act. 2. Further, placed in the above factual and legal scenario, the impugned order of the CIT(A) is, the appellan....
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....ynch, against whom the assessee reflected total fees of Rs. 706.35 Lacs and claimed deduction u/s 80-O. 4.3 Subsequently, the case was reopened by issuance of notice u/s 148 dated 22/03/2002 in view of the fact that the assessee made false claim u/s 80-O in respect of ADR issue of M/s Raymond (I) Limited (Raymond) as no services were provided by the assessee to Merrill Lynch International. It was alleged that what the assessee received from Merrill Lynch International (MLINT) was its share of underwriting spread (selling commission) of the Raymond issue for which it was an independent manager, dehors the lead manager i.e. MLINT. The assessee received its share of commission from Raymond and MLINT merely coordinated the issue and remittance....
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....issuer. It was also submitted that assessee's name was merely mentioned as co-lead manager to enhance its image in the international markets. Nevertheless, the services were rendered by the assessee to MLINT as per specific terms of agreement dated 23/03/1993. A confirmatory letter dated 24/01/2003 from MLINT was also submitted to support the same. 4.5 However, upon perusal of subscription agreement concerning Raymond, Ld. AO noted that the assessee, in its own capacity, gave a commitment to purchase part of the issue and it acted as an independent agent in its own capacity to provide managerial services to Raymond in successfully carrying out the ADR issue. Further, as per the terms of separate agreement dated 09/11/1994 between MLINT and....
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....INT. Therefore, the aggregate amount of Rs. 396.86 Lacs stated to be received from MLINT with respect to 3 entities was reduced while computing eligible amount u/s 80-O. The said action would reduce the final deduction u/s 80-O and accordingly, enhance the total income of the assessee. 5.1 Aggrieved, the assessee preferred further appeal before learned first appellate authority vide impugned order dated 06/02/2004 wherein the assessee's claim was accepted by observing as under: - 6. I have considered the submissions of the assessee and also the order of the A.O. Assessing Officer has mainly relied on subscription agreement entered into between Raymond Woollen Mills Ltd. and Merrill Lynch i.e. assessee where assessee has been named as one....
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....dated 23.03.1993. It is evident that learned CIT(A) has given relief by noticing that fee was received by the assessee against services rendered in terms of service agreement dated 23/03/1993 as supported by the confirmatory letter of MLINT. It was also noted that there was no evidence which would prove that the said fee was received in the capacity of co-lead manager. Aggrieved, the revenue is in further appeal before us. 5.2 The Ld. DR, supporting the findings of Ld.AO as given in reassessment order, submitted that the assessee was not eligible to claim the deduction u/s 80-O with respect to the 3 entities. Au Contraire, Ld. AR, reiterating the stand taken before Ld. CIT(A), submitted that fees was received only in terms of service agr....