MARUBENI INDIA PVT.LTD. Vs. DIT

JUDGEMENT

(1.) ITA No.1042/2011 is an appeal by the assessee relating to the assessment year 2002-03 and ITA No.1114/2011 is an appeal by the CIT for the assessment year 2003-04. They arise out of a consolidated order passed by the Income Tax Appellate Tribunal on 18.03.2011.

(2.) The assessee is a private limited company incorporated in India under the Companies Act, 1956. It is a 100% subsidiary of Marubeni Corporation, Japan ("MCJ", for short). It carries on mainly two types of business (i) operations consisting of representation service, i.e., to liaise between the business divisions of MCJ and its various suppliers/ customers in India which includes import, export, off shore trade, project management, marketing of finished goods, market research and liaison work; and (ii) trading of a broad range of industrial, agricultural and consumer goods, commodities and natural resources.

(3.) We may first take up the appeal filed by the assessee in ITA No.1042/2011 relating to the assessment year 2002-03. The assessee filed a return of income on 31.10.2002 declaring "nil" income. It was revised but even in the revised return the income declared was ' nil; however, it was explained that the interest on bank deposit earlier treated as business income was being shown as "income from other sources" in the revised return, that the brought forward unabsorbed depreciation was being claimed as depreciation of the current year and that the expenses amounting to Rs. 11,23,440/- relating to construction project was being withdrawn. The return was scrutinised and an assessment order was passed under section 143(3) of the Income Tax Act, 1961 (hereinafter referred to as the "Act") determining the total income at Rs. 2,35,01,470/-. Several additions were made in the assessment order. For the purpose of the present appeal, however, the assessee has proposed the following 7 questions, stated to be substantial questions of law, for our consideration: -