2009 - TMI - 34004 - CESTAT, CHENNAI
Business Auxiliary Service – procurement of inputs - appellants have a heating machine to heat ‘Hydraulic Oil’ which is used for heating the hydraulic press used for pressing the design ‘mould’ at their factory premises. In addition to their own use of the heated hydraulic oil, they also supplied heated fluid to adjacent two companies through pipelines for which they received heating charges on hourly basis which is in no way can be treated as service rendered as it is only a supply of excess heated oil to other units - no third party involved – activities not liable to service tax.

2009 - TMI - 34003 - CESTAT, CHENNAI
Tour Operator Service – in earlier case of the same assessee it was held that appellant have only provided transport and they did not rendered ‘tour operator service’ – in view of this appeal is allowed – demand set aside.

2009 - TMI - 34002 - CESTAT, CHENNAI
Condonation of delay of 25 days in filing an appeal – appellant submits that delay was caused due to that General Manager of the partnership firm who is looking after the affairs had suffered an attack of Infective Hepatitis – found that firm has 20 partners – explanation for delay is not sufficient to condone delay – appeal dismissed.

2009 - TMI - 34001 - CESTAT, CHENNAI
Cenvat Credit on Outdoor Catering Service – Input Service – Rule 2(l) – assessee is a manufacturer of forgings - held that outdoor catering services are entitled for cenvat credit as input service.

2009 - TMI - 33999 - CESTAT, NEW DELHI
Waiver of Penalty – Section 80 – when the appellant have discharged tax liability from October, 2004 to March, 2005 period along with interest, while in view of Tribunal’s Judgment in case of Hindustan Zinc Ltd. (supra), they were liable to pay the tax only with effect from 1-1-2005, it would be illogical to impose penalties on them under sections 76, 77 and 78. - the provisions of section 80 of the Act are applicable to the facts of this case and therefore, no penalty should have been imposed on the appellant – Held that the Commissioner’s order imposing penalty on the appellant under sections 76, 77 and 78 of the Act is not sustainable and the same is set aside. The appeal is allowed.

2009 - TMI - 33996 - CESTAT, BANGALORE
Clearing and Forwarding Agent – Services being provided on principal to principal basis not on principal agent basis - That the appellants are paying Service Tax under the category of ‘Transport of goods through pipeline’ which is a fact not disputed by the department – Held that the services rendered by the appellants do not fall under C & F Agents services - we are bound to follow the ratio of our own decision in the said final order. It was pointed out that the department has gone in appeal against the said final order to the Hon’ble High Court of Andhra Pradesh. However, there is no stay of operation of the Tribunal’s order. In these circumstances, respectfully, following the ratio of the earlier order, we allow the appeal and set aside the impugned order with consequential relief.

2009 - TMI - 33995 - CESTAT, CHENNAI
Condonation of delay in Filing of an appeal before Commissioner (Appeals) – Commissioner (Appeals) were dismissed the appeals against the order in original, although the delay was within the period which the Commissioner (Appeals) was empowered to condone, the delay was not satisfactorily explained – Tribunal has gone through the memorandum of appeal filed before the Commissioner (Appeals) and found that appellant could not satisfy the reasons for delayed filing of appeal – accordingly tribunal upheld the order and rejected the appeal of assessee.

2009 - TMI - 33994 - CESTAT, BANGALORE
Demand and Recovery of Service Tax – extended period of limitation - alleged that appellants had not included the value of Piling works undertaken by them for the construction of new Commercial and Industrial Construction Works as well as the Residential Complexes in the taxable value for the purpose of assessment and discharge of service tax liability. It was also noticed by the authorities that the services rendered by the appellant for soil testing and survey work would fall under the category of “Consulting Engineer Services” and the amount collected by the appellant for such services has escaped assessment and discharge of service tax liability – Tribunal upheld demand of service tax on piling works but remanded the matter for re-quantification – but for soil testing and survey work held as non taxable in view of new service introduced from 16-6-2005 as Site Formation and Clearance, excavation and earthmoving and demolition.

2009 - TMI - 33993 - CESTAT, MUMBAI
Service Tax Paid before issuance of SCN – Reduction in Penalty - Commercial or Industrial Construction service - Even if a minimum penalty is prescribed, the authority competent to impose the penalty will be justified in refusing to impose penalty, when there is technical or venial breach of the provisions of the Act or where the breach flows from a bona tide belief that the offender is not liable to act in the manner prescribed by the statute – Tribunal uphold the order of the Commissioner (Appeals) reducing the penalty to Rs.10,000 and reject the appeal of the revenue.

2009 - TMI - 33992 - CESTAT, MUMBAI
Penalty for non payment of service tax – Service Tax along with Interest was paid after issuance of SCN - Commissioner (Appeals) has upheld the demand of service tax but reduced the penalty to Rs. 60,000 considering the explanation of the respondents that failure to pay service tax emanated from lack of knowledge of service tax laws and procedures –show-cause notice has proposed penalties under three sections 76, 77 and 78 - the penalty apparently has been imposed under section 76 only (though the orders says that it has been imposed under sections 76, 77 and 78) as it is Rs.100 per day subject to maximum of service tax evaded being Rs. 3,65,940 and this is total consonance with the provisions of section 76 wherein penalty cannot exceed the amount of service tax not paid. It appears that no penalty has been imposed under section 78 where the minimum penalty is equal to service tax not paid – Revenue appeal against the order of comm.(A) rejected.

2009 - TMI - 33991 - CESTAT, CHENNAI
Clearing and Forwarding Agents Service – Demand of Service Tax – The same issue Apex Court has since been decided against the revenue in the judgment in CCE v. Gujarat Carbon & Industries Ltd. – Revenue Appeal dismissed

2009 - TMI - 33962 - CESTAT, MUMBAI
Appeal filed before commissioner (appeals) with a request to grant stay – C(A) dismissed stay application and ordered to pre-deposit – appellant filed an application before C(A) to modify its own order on the issue of stay – C(A) refused to modify its own order – Appeal files against the decision of the C(A) for not exercising its power to modify its own order in the interest of justice – Tribunal Observed that modification of order implies review of its earlier order – the review of orders of appellant authorities are not permitted exercising its appellate power – appellants requested to refer the matter to Larger Bench – Held that the demand of referring the issue to Larger Bench is not tenable – appellant directed to comply with the orders of the commissioner (appeals)

2009 - TMI - 33961 - CESTAT, CHENNAI
Cenvat Credit on Mobile Phones – Commissioner (Appeals) had passed the impugned orders consistent with the interpretation of the provisions by the Hon’ble High Court of Gujarat. The mobile phones in question were used for official purpose. It has to be held that use of the phones was in or in relation to manufacture of excisable goods by the respondents. In view of the Board’s Circular dated 23-8-2007, the Revenue has taken superceded instructions of the Board’s earlier circular as a ground to assail the impugned orders. In terms of the Board’s clarification contained in Circular dated 23-8-2007, cases of use of phones found in the instant cases constituted input service and the service tax credit was admissible as CENVAT credit. - the ground on which the credit was disallowed, namely, the phones were not installed in the factory premises, cannot be termed to be a ground germane to the provisions of the Rules relevant for the present purpose – credit is allowed.

2009 - TMI - 33960 - CESTAT, CHENNAI
Cenvat Credit on telephone services – mobile phones and landline phones installed by company at residence of executives - In the Excel Crop Care Ltd. case, the Hon’ble High Court of Rajasthan held that service tax paid for use of mobile phones was available to the assessee paying the mobile phone bill. Their Lordships held that “the ground on which the credit was disallowed namely, the phones were not installed in the factory premises, cannot be termed to be a ground germane to the provisions of the rules relevant for the purpose. In the Indian Rayon and Industries Ltd. case, the Tribunal had held that service tax paid on mobile phones was available as credit to eligible service providers of output service and manufacturers. Excel Crop Care case, Grasim Industries case, Keltech Energies Ltd. case and the Brakes India Ltd. case had followed the ratio of the Tribunal’s decision in the Indian Rayon & Industries Ltd. case. – Credit allowed.

2009 - TMI - 33959 - CESTAT, NEW DELHI
Refund of erroneous payment – Service Tax was paid on Import of Services during the period from January, 2004 to July, 2004 - The appellant paid the tax on such payment under the mistaken impression under the category of “Consulting Engineering”. The appellant filed refund claim. The adjudicating authority rejected the refund claim which was upheld by the Commissioner (Appeals). In view of the Larger Bench decision of the appellants own case, we hold that the appellant is not liable to pay service tax. On perusal of the aforesaid decision, we find that in the said cases, it has been held that the appellant deposited tax to the Government without remitting to the foreign company not to be refunded. The issue was decided after examining the agreement – impugned order set aside – matter remanded to the adjudicating authority to decide the refund claim in accordance with the law.

2009 - TMI - 33958 - CESTAT, CHENNAI
Refund of service tax paid on Input services - 100% EOU – Refund has been rejected for a certain period on the ground that during the material period the Central Government had not issued Notification under Rule 5 of CCR 2004 specifying any safeguard, conditions and limitations subject to which the refund of credit relating to input service could be allowed – While allowing the refund tribunal held that, there is no justification to deny refund relatable to input service used for production of goods exported during the same perio, a similar refund claim for credit of input service denied by the authorities was held to be admissible as Rule 5 of CCR, 2004 provided for such refund - impugned order is set aside and this appeal allowed.

2009 - TMI - 33957 - CESTAT, CHENNAI
ROM – Rectification of Mistake – Appellant filed an application to rectify the order in view of apex court decision - The question as to what is the main activity of the assessees and what is their incidental activity is something which has not been established by the assessees before the Tribunal. Therefore, the applicability of the apex court’s decision is highly debatable and it cannot be applied to the facts of the present case. In the circumstances, no error arises in holding that the applicants are liable to service tax. As regards the second plea, nowhere it is reflected in the order of the Tribunal that the assessees had argued against imposition of penalty and, therefore, no error arises on this score also. – Application for ROM rejected.

2009 - TMI - 33956 - CESTAT, AHMEDABAD
Club or association - Section 65(25)(a) - The appellants are engaged in providing effluent treatment service to industrial establishments located in the area of GIDC, Vapi. The service tax amounting to more than Rs. 3.26 crores with interest as applicable has been demanded and penalty equal to the service tax demanded under Section 78 has been imposed and penalties have been imposed under Sections 76 and 77 of Finance Act, 1994 against the appellant - In view of the fact that the Hon’ble High Court of Gujarat has granted unconditional stay to M/s. Green Environment Services Co-operative Society Ltd. in a similar case, tribunal allowed the stay petition unconditionally.

2009 - TMI - 33955 - CESTAT, BANGALORE
Photography Service – Exemption under notification no. 12/2003 ST dated 20-6-2003 - Stay application allowed by granting waiver of pre-deposit of the amount and staying its recovery till the disposal of the appeals

2009 - TMI - 33954 - CESTAT, BANGALORE
Maintenance and Repair Services – the definition under went a change on 16-6-2005 wherein the services rendered by the applicant would have got covered. Since the issue involved in this is prior to that period, we find that the Final Order 172 /2007 squarely covers the issue in favour of the applicant. Accordingly, application for waiver of the pre-deposit of the amounts involved is allowed and the recovery thereof stayed till the disposal of the appeal

2009 - TMI - 34007 - AUTHORITY FOR ADVANCE RULINGS
Permanent Establishment – P/E – Nature of Income – Business Profit - M/s Cable and Wireless UK (C &W UK) is providing end to end international long distance telecommunication services to its Indian customers. Whereas the applicant will carry the calls and data within the country, C&W UK will further carry those calls and data to the recipients outside India. The network and equipments of C&W UK will not be used in India and the applicant’s network and equipments will not be used outside India. Thus in telecom parlance, domestic half circuit will be provided by the applicant and international half circuit will be provided by C&W UK. In respect of the aforesaid services rendered by C&W UK, the applicant will pay fees to the former. – Held that the payments made by the applicant to C&W UK are in the nature of business profits. In the absence of there being any permanent establishment of C&W UK in India, this income is not at all taxable here. Since this income is not chargeable to tax under the Act, there is no question of making any deduction at source u/s 195.

2009 - TMI - 34005 - PUNJAB AND HARYANA HIGH COURT
Concealment of Income – penalty – Assessee filed nil return claiming exemption u/s 10(29) – on assessment AO found that certain income is not allowed for exemption and assessed the income at Rs.1,81,93,618/- and propose to levy penalty under section 271(1)(c) of the Income Tax Act, 1961 – held that despite the fact that the respondent-assessee had filed a nil income tax return for the assessment year 1993-94, claiming exemption under section 10(29) of the Act, yet it had disclosed its entire income by, depicting clearly the various heads under which the said income had been earned. And as such, it was not as if the respondent assessee had “concealed the particulars of his income” or “furnished inaccurate particulars of his income” – Penalty is not leviable.

2009 - TMI - 33990 - GUJARAT HIGH COURT
Capital or Revenue Expenditure – Going Concern – Payment of guarantee commission can not disallowed – The assessee had acquired four divisions during the year as going concerns along with their assets and liabilities which included amounts payable to four investment companies in five annual equal instalments - The amount due to these investment companies, by mutual agreement, commuted at a discounting rate of 12 per cent. and the difference of Rs. 32,50,557 was credited to the capital reserve of the assessee-company – Assesse contended this amount was not of the character of income or deemed income and that it had nothing to do with the trading activities of the assessee, instead the amount represented capital receipt and was not liable to tax – AO rejected the submissions of the assessee and assessed the amount is taxable income – Held that the profits arising on reduction of liabilities was not trading profits liable to be taxed as business income – amount is not taxable as income.

2009 - TMI - 33989 - RAJASTHAN HIGH COURT
Claim of Depreciation u/s 32 on leased goods – reassessment - Assessing Officer had formed a particular opinion on a particular set of documents simply because the Assessing Officer at Mumbai had formed a different opinion on the same set of documents the action was sought to be initiated here for reassessment which - it was a “borrowed satisfaction” under the opinion of the Assessing Officer at Mumbai – Held that it borrowed satisfaction is sufficient to confer power on the Assessing Officer to initiate reassessment proceedings – Further, lease agreement shows that the lessee shall not claim any relief by way of any deduction, allowance, or grant available to the lessor as owner of the equipment under the Income-tax Act, 1961, or any other statute, rule of regulation issued by the Government or any statutory authority – the benefit of depreciation is allowed in the hands of lessor.

2009 - TMI - 33988 - PATNA HIGH COURT
Deduction u/s 80P(2)(a)(i) – Interest Income and Rental Income – AO, Comm(A) and Tribunal has disallowed the claim observing that the interest earned on the investment of the provident fund money was not eligible for exemption under section 80P(2) (a) (i) of the Income-tax Act, because the said income has not been earned from regular business of banking. It also observed that the interest earned on investment of the provident fund amount did not form part of either the stock-in-trade or the circulating capital. For parity of reasons the Tribunal disallowed the deduction of the rental income also - Held that interest derived from investment of the provident fund amount and the rental income do not qualify for deduction under section 80P(2)(a) (i) of the Act. Appeal dismissed.

2009 - TMI - 33987 - MADRAS HIGH COURT
Depreciation u/s 32(1)(iv) at – Rate of Depreciation - Commissioner of Income-tax (Appeals) came to the conclusion that the assessing authority was wrong in not accepting that the hospital is a “welfare centre” and that in view of section 32(1) (iv) of the Income-tax Act, as it then stood, concluded that the “welfare centre” would include hospital. The Tribunal also accepted the decision – “In taxing statute particularly it is not the dictionary meaning which has to be seen but the meaning as understood in common parlance specially in commercial circles” and that, “in interpreting words and phrases in taxing statutes it is the popular meaning which has to be followed it” - It is also well settled that “exemptions under taxing statutes must be strictly construed”. This is a case of depreciation and there is no definition for either “welfare centre” or “hospital” – Hospitals can not be treated as par with welfare centre – benefit of higher depreciation is not allowed.

2009 - TMI - 33986 - PUNJAB AND HARYANA HIGH COURT
Penalty u/s 271(1)(c) for concealment of Income - on the basis of an information, a notice under section 148 of the Act was issued on the ground that certain income chargeable to tax had escaped assessment. In response to the said notice, the assessee filed the return of income; wherein income was declared at Rs. 63,39,640, which, inter alia, included the entire amount of receipts on account of sale proceeds of the shares at Rs. 33,10,380 against long-term capital gain of Rs. 29,74,951 declared in the original return of income. Aassessee submitted that return of income is being voluntarily revised to include the entire amount of receipt along with other amount to buy peace of mind and to avoid hazards of litigation and also to save himself from any penal action – Held that The assessing authority had failed to take any objection that the declaration of income made by the assessee in his revised return and in his explanation were not bona fide. Penalty has been deleted rightly.

2009 - TMI - 33984 - KARNATAKA HIGH COURT
Expenditure u/s 37 – the assessee who is carrying on business as stevedoring, clearing and forwarding agents and is being assessed in the status of a firm. For the assessment year 1996-97, a sum of Rs. 32,32,601 was debited as stevedoring charges. On verifying these expenses claimed, it was found by the Assessing Officer that the assessee had produced certain self-made vouchers endorsed by the assessee’s own employees and that these were other than the regular salary and other allowances which itself was taxable under the provisions of the Act. AO, on the basis of absence of proper voucher disallowed Rs. 13,17,243 – Held that in order to ensure that work of handling goods are done within a reasonable time and to handle emergency operations of cargo handling beyond the working hours, such payments are made either through labour or workers’ union, cannot be considered to be either prohibited by law and further the assessee cannot be expected to take the receipt from individual workers or make payment by way of cheques. Expenditures are allowed to be deducted.

2009 - TMI - 33983 - KERALA HIGH COURT
Rectification of Mistake u/s 154 – An intimation was send u/s 143(1)(a) for acceptation of return filed by the assessee – thereafter regular assessment was done u/s 143(3) - Later, the Assessing Officer noticed that the intimations sent were incorrect inasmuch as adjustments towards prima facie inadmissible items, namely, disallowance under rules 6B, 6D and section 37(2A) were not made. Accordingly notice u/s 154(1)(b) issued for rectification – Tribunal has held that rectification can not be made under section 154 in the present situation – HC held that, Tribunal have misunderstood the facts and have not referred to the statutory provisions applicable at the relevant time – matter remanded to the tribunal for reconsideration after setting aside the order.

2009 - TMI - 33982 - GUJARAT HIGH COURT
Interest Paid on Capital Borrowed – Section 36 – Interest Paid Rs. 27,96,55,759 - The hon’ble Supreme Court has held that section 36(1) (iii) of the Income-tax Act, 1961, has to be read on its own terms : it is a code by itself. It makes no distinction between money borrowed to acquire a capital asset or a revenue asset. All that the section requires is that the assessee must borrow capital and the purpose of the borrowing must be for business which is carried on by the assessee in the year of account. Unlike section 37 which expressly excludes an expense of a capital nature, section 36(1) (iii) emphasises the user of the capital and not the user of the asset which comes into existence as a result of the borrowed capital. The Legislature has, therefore, made no distinction in section 36(1) (iii) between capital borrowed for a revenue purpose and capital borrowed for a capital purpose - Actual cost of an asset has no relevancy in relation to section 36(1) (iii) of the Act – tribunal order disallowed the claim of interest not correct – interest is allowable – appeal allowed.

2009 - TMI - 33981 - MADRAS HIGH COURT
Search and Seizure – Meaning of Undisclosed Income - assessees received unaccounted money towards the sale of flats apart from certain illegal payments such as bribes debited as construction expenses, which are disallowable against gross receipts. Certain unexplained investments in the property made by the senior partner were also detected. Cash was found in excess of cash balance recorded in the books. Some amount was received from the flat owners on various dates towards various expenses involving additional amount paid for acquisition of land and extra amenities provided in the flats - Out of these certain amounts had already been accounted for in the earlier years’ books of account leaving a balance of Rs. 39,68,999 and towards this the assessee offered a sum of Rs. 40 lakhs as undisclosed income. AO proceeded to estimate the cost of construction and arrived at an additional sum of Rs. 30,79,298 for the block period being illegal expenses accounted for in the books as construction expenses. – HC did not find any merit in appeal and dismissed the appeal

2009 - TMI - 33980 - KARNATAKA HIGH COURT
Capital versus Revenue Expenditure - The Commissioner of Income-tax on perusal of the records of the assessee, found that the claim of Rs. 5,00,000 being paid to SEBI during the assessment year as authorisation fee, had wrongly been allowed as revenue expenditure. Hence, he disallowed the sum of Rs. 5,00,000 deposited by the assessee as authorisation fee to SEBI was capital expenditure. This payment was made in order to meet the requirements of the Securities of Exchange Board of India Act, 1992. According to the appellate authority, payment was made only once. Hence, the expenditure incurred by the assessee rendered the assessee with a benefit of enduring nature and, therefore, treated it as capital expenditure. – Tribunal held that that the amount is revenue in nature and allowed the deduction – HC held that, ff the Revenue had been treating the amount of Rs. 5,00,000 deposited by the similarly situated assessees with SEBI as revenue expenditure, then there is no reason why a different treatment should be meted out to the present assessee – allowed as revenue expenditure.

2009 - TMI - 33979 - KARNATAKA HIGH COURT
Valuation of Closing Stock and Plant & Machinery in Transit as on March 31 – AO found that the plant and machinery purchased on March 31, 1996, was not reflected in the closing stock and similarly, the statement shown to the banker and in the return of income filed by the assessee before the Department there is a difference in value of closing stock to an extent of Rs. 5,65,000 – Held that merely because assessee has not reflected the machines, is not a ground to assess the value of the goods received by the assessee after March 31, 1996 as an income – on the issue of closing stock mmissioner as well as the Tribunal have given a categorical finding that the stocks available with the assessee were in the warehouse and governed by the excise rules and it is also expressed by both the parties that it was always possible for the assessee to show the value of the stock-in-trade based on the actual realisable value to the Department and reflected value of the stock-in-trade for the purpose of banking – Therefore, both the questions answered in favor of assessee and against the Revenue.

2009 - TMI - 33978 - KARNATAKA HIGH COURT
Income From Undisclosed Sources - The assessee (a nursing home) has on its panel as many as 36 visiting doctors who were specialists in various fields of medicine. The assessee had not accounted the fee collected by the specialists in its accounts. The assessee, explained that it is the practice of the nursing home that the visiting specialists collected their fee directly from the patients and it was not charged to the account of the nursing home anytime. The assessee also filed a joint statement of 36 visiting specialists, wherein all the visiting specialists have stated that they were collecting the fee from the patients directly and it was not charged to the accounts of the assessee – AO has not conducted inquiry to establish the truth of the joint statement - The technical insistence by the Assessing Officer that the assessee should have examined all the specialists is an untenable view. In the absence of contra material, the Assessing Officer cannot reject the genuineness and correctness of the statement. Question is answered in favour of assessee.

2009 - TMI - 33977 - PUNJAB AND HARYANA HIGH COURT
Deduction u/s 80HHC - Merchandise exported - ‘minerals and ores’ – tribunal held that merchandise exported by the assessee do not constitute ‘minerals and ores’ within the meaning of section 80HHC(2)(b)(ii) – Moreover tribunal held that the provisions of section 80HHC(2)(b)(ii) are retrospective in nature – HC has answered in favor of revenue and against the assessee

2009 - TMI - 33976 - KARNATAKA HIGH COURT
Notice u/s 148 - Tribunal held that the assessment order framed under section 143(3) read with section 147 as bad in law and consequently quashing the same – Held that, It is well-settled that the Income-tax Officer’s jurisdiction to reopen an assessment, depends upon the issuance of a valid notice. If the notice issued by him is invalid for any reason the entire proceedings taken by him would become void for want of jurisdiction.” – Appeal dismissed as no substantial question of law arose.

2009 - TMI - 33975 - SUPREME COURT
Assessee claimed the aid given to the residents living in the vicinity of the factory of the assessees as a business expenditure under section 37 of the Income-tax Act. Tribunal and HC allowed the amount of aid given to residents living in the vicinity as business expenditure – SC observed no finding on this aspect in the impugned judgment of the Tribunal as well as in the judgment of the High Court – therefore matter remanded to tribunal after setting aside the orders.

2009 - TMI - 33951 - AUTHORITY FOR ADVANCE RULINGS
DTAA – Mauritius Tax Treaty – Section 5 and 44BB of the IT Act – Article 7 of the treaty - Applicant is a foreign company undertaking contract for laying pipelines under the sea and constructing the structures inclusive of pre-commissioning of the pipelines – whole contract divided into parts i.e. activities wholly performed in India, activities wholly performed outside India and activities partly in India and partly outside India – Held that the applicant cannot be said to have permanent establishment within the meaning of Article 5 read with Article 5.2(i) of the DTAA between India and Mauritius. When there is no permanent establishment, the question of taxing any part of the business profits in India does not arise. It is not contended and it cannot be contended that payment received by the applicant under the contract constitutes ‘fee for technical services’. Whatever technical services are provided, they were only integral to the performance of the project work – No income is taxable in India.

2009 - TMI - 33950 - MADRAS HIGH COURT
Assessment under section 143 – Issuance of notice after expiry of 12 months - the returns were all filed on 23.03.1998, 17.03.1998 and 23.03.1998 for the assessment year 1997-98 whereas the notice under Section 143 (2) came to be issued on 17.08.1999 in respect of all the three returns – Held that having regard to the specific stipulation in Section 143 (2) of the Act that the issuance of the notice under the said Section should be made within 12 months from the end of the month in which the return of income was filed, it was legally obligated upon the appellant to have issued the said notice on or before 31.03.1999. The Tribunal's conclusion of having annulled the order of assessment on that score being valid in law, the same cannot be found fault with. The question of law is answered against the appellant.

2009 - TMI - 33949 - MADRAS HIGH COURT
Residential Status under section 6 – residential status of crew members – deduction of TDS from the amount / salary paid to such members - tribunal held that the Indian shipping company need not deduct tax at source with respect to its crew for the days on which the ship was outside the territorial waters of India and the number of such days exceeds 182 in any particular year – held that there was no scope to find fault with the action of the Indian shipping company in not having deducted any tax at source in respect of the salary paid to such crew for the relevant period – tribunal decision upheld.