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2018 (2) TMI 1407 - AT - Service TaxConsultancy engineering service - Certain expenditure shown in the books of the appellant with reference to income and expenditure of projects in India is sought to be taxed as a consideration for consulting engineer service - Revenue entertained a view that expenditure incurred/shown in the accounts of appellant against consultancy fees and technical fees, which was further taken into account by LIL, Canada in the overall income and expenditure is liable to be taxed under the category of engineering consultancy service on reverse charge business - Held that: - the whole of the income shown in the books of accounts of the appellant, though the same is accrued to LIL, Canada has suffered tax under the category of consultancy engineering service. An expenditure, which is part of the same accounting for income, cannot be taxed for the same service, even under reverse charge tax. Secondly, the appellant has no agreement or arrangement with LIL, Canada to receive any consultancy service. No such allegation has been made. LIL, Canada apparently, procured such consultancy service from various consultants, which in turn were used for rendering service to Indian clients. In fact, such services were effectively managed and utilized by LIL, Canada. This is expenditure for LIL, Canada, which is also reflected in the appellant’s accounts as per the requirement. The full income on consultancy service, as already noted, has suffered Service Tax. This is an admitted fact. The expenditure to provide such service cannot be put to Service Tax even under reverse charge basis. There is no basis either on fact or law to sustain such confirmation. Manpower Supply Service - tax liability under manpower supply in respect of staff deputed by LIL to India to render the services in terms of the agreement with the Indian clients - Held that: - The Hon’ble Allahabad High Court in the case of Computer Science Corporation India Pvt. Ltd. [2014 (11) TMI 125 - ALLAHABAD HIGH COURT] held that in such arrangement, the deputation of employee for executing work cannot be considered as a manpower supply. It was held that the employer cannot be considered as a manpower supply agency - neither the appellant nor LIL, Canada can be considered as a manpower supply agency - tax liability cannot sustain. Appeal allowed - decided in favor of appellant.
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