Assessee not entitled to benefit of s 220(7), wherein the income which arisen in Russia but not been brought in India and remitted to third country despite there been no restriction on remittance to India

High Court of Delhi

Writ Petition(C) No. 328, 340/2010

Decided on: 20 April 2011

Ravina and Associates Private Limited and Another Vs CIT and Others

Judgment

Sanjiv Khanna, J.

Delhi High Court judgment on Writ Petition No. 328, 340/2010 – Ravina and Associates vs CIT. Stay on recovery of tax demand. Key details here.

Ravina and Associates Private Limited and Ravina Khurana have filed the present writ petitions for stay of recovery of the outstanding demand of Rs.54,91,15,497/- for the assessment years 2004-2005, 2005-2006 and 2006-2007 in the case of Ravina and Associates Private Limited and Rs.5,02,17,426/- for assessment years 2000-2001 to 2004-2005 in the case of Ravina Khurana. In the alternative, the two petitioners have made a prayer that the outstanding amount should be recovered from the accounts of the petitioners in the NatWest ₇th Bank, London. Challenge is also made to the order dated January, 2010 passed by the Commissioner of Income Tax, Delhi-V rejecting the application for stay of demand. It is submitted that the petitioners cannot be treated as assessees in default in view of sub-section (7) to section 220 of the Income Tax Act, 1961 (for brevity, ‘the Act’).

2. Though the facts are almost similar, yet for the sake of clarity, the factual matrix in the two cases may be noticed separately.

Ravina and Associates Private Limited

3. Ravina and Associates Private Limited, incorporated on 22^nd July, 1987, was/is engaged in the business of providing technical support services to Russian companies. For the assessment years 2004-2005 and 2005-2006, income tax returns were filed by the said petitioner company declaring income of Rs.31,77,400/- and 49,97,160/- on  31^st October, 2004 and 31 ^st October, 2005, respectively.

4. Notice for reopening under section 148 of the Act dated22 nd May, 2006 were issued for the assessment years 2004-2005 and 2005-2006.

5. It is accepted and admitted that Ravina and Associates Private Limited had received and accredited sum of Rs.108,39,46,971/- during financial years 2004-2005 to 2006-2007 under the agreements entered into with M/s Techno Prom Export, Moscow, Russia.