ANAND & ANAND Vs. COMMISSIONER OF INCOME TAX

JUDGEMENT

(1.) THIS appeal under s. 260A of IT Act, 1961, arises from an order passed by the Tribunal whereby it has upheld the order passed by the CIT(A) and affirmed the finding that a sum of Rs. 92,91,442 out of a total foreign receipt of Rs.

(2.) ,13,35,647 did not qualify for deduction under s. 80 -O of the Act. The facts are few and may be set out at the threshold. 2. The appellant is a partnership concern comprising legal practitioners specializing in cases involving intellectual property rights and disputes relating to patents, trademarks, copyrights and designs, etc. For the asst. yr. 1997 -98, the appellant declared a total professional receipt of Rs. 2,79,09,740 which included receipts to the tune of Rs. 2,13,35,647 in foreign exchange. Claiming deduction under s. 80 -O for an amount of Rs. 1,06,68,824, the appellant declared its net taxable income at Rs. 19,05,515 only.

(3.) THE AO completed the assessment in the process holding that the deduction allowable under s. 80 -O of the IT Act was limited to a sum of Rs. 34,22,040. Consequently, he added back an amount of Rs. 72,46,782 to the income of the assessee disallowing the remainder of the claim for deduction made by the appellant. Aggrieved, the appellant appealed to the CIT(A) who dismissed the appeal and repelled the contention urged before her that the amount of deduction claimed by the appellant represented fees received for services rendered from India. The CIT(A) held that since the amount of Rs. 92,91,442 represented fees received by the appellant for filing and arguing cases on behalf of foreign clients in Courts within the country, the services corresponding to the said receipts were rendered in India and, therefore, did not qualify for deduction. A further appeal taken by the assessee to the Tribunal also proved unsuccessful. The Tribunal concurred with the view taken by the CIT(A), that the amount of Rs. 92,91,442 received in foreign exchange represented fees for services rendered by the appellant 'in' India and not 'from' India as claimed by them. The said amount, therefore, did not qualify for deduction under s. 80 -O. The present appeal, as noticed earlier, calls in question the correctness of the said view.