TMI Blog2013 (11) TMI 421X X X X Extracts X X X X X X X X Extracts X X X X ..... receipt cannot be treated as a trading receipt. Hence, reimbursement of service tax cannot form part of total income of the assessee – Relying upon the above judgment, the issue has been decided in favor of Assessee. - ITA No. 1087/Mum/2012, ITA No. 1086/Mum/2012 - - - Dated:- 28-8-2013 - Shri Rajendra Singh And Shri Vivek Varma,JJ. For the Appellant : Mr. V. K. Duggal For the Respondent : Mr. V. Saxena ORDER Per Vivek Varma, JM:- The two appeals are filed by the assessee against the common order passed by the CIT(A) 11, Mumbai, dated 30.11.2011, since the grounds in assessment year 2008-09 are identical to the grounds in assessment year 2007-08, we, for the sake of convenience pass a consolidated order, by taking asses ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ning ADIT Order taxing technical service of Rs. 2,10,89,420/-received from Essar Oil Ltd. at 20% instead of lO.455%, the tax rates applicable on all agreement/invoices entered in to/prepared after 1st June 2005 5. The learned Commissioner of Income Tax (Appeals) was not justified on facts and circumstances of the case and erred in law in sustaining ADIT Order for assessing the amount of service tax as receipts and consequently levying tax hereon. 6. The learned Commissioner of Income Tax (Appeals) was not justified on facts and erred in law in sustaining ADIT Order foc applying tax rate of 41.82% on bank interest instead of tax rate of 20% as provided in the section 115(A)(ii) read with Explanation B. 7. Without prejudice the learned ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the approach of the revenue authorities was not in accordance with law. 6. The DR, on the above submissions made by the AR submitted that the issue may be restored to the file of the AO to come to appropriate and correct legal position. 7. We have examined the issue and we are also of the considered opinion that the revenue authorities approached the issue on infirm reasoning`, i.e. how the AO could have altered the settled issues without disturbing the assessments that had been framed. We, therefore are of the view that the issue be looked afresh by the AO in accordance with law and as per the judicial decisions relevant to the issue impugned before us. 8. We, therefore, set aide the order of the CIT(A) and direct the AO to decide t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erial. The AR accepted that the services were rendered in the current year and the TDS certificates sent by its vendors pertained to the provisional income ending financial year 2006-07. In our opinion, the AO was correct to bring to tax the income in the current year, as the income pertained to the current year. 16. The ground is, therefore, rejected. 17. Ground no. 4 pertains to applicability of rate of tax. 18. The facts are that the assessee provided technical services to Essar Oil Ltd. as per agreement dated 15.09.2005, wherein the rate of tax to be applied is 10.455%. The revenue authorities adopted the rate at 20%. The AR submitted that the DTAA provided that if the agreement is available and dated on or after 01.06.2005, the r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ions of representatives of both the parties. We have also gone through the decision of Coordinate Bench of this Tribunal in the case of Veolia Ea-Compagnie (supra). We observe that in the said case, similar issue arose i.e. as to whether the service tax charged and collected by the assessee, which is a France based foreign company engaged in providing consultancy service to Chennai Metropolitan Water Supply and Sewerage Board (CMWSSB), is its business receipts subject to tax on gross basis under section 115A r.w. 44D of the Act. The Tribunal vide para 8 has held that reimbursement of service tax could not form part of taxable income of the assessee. Fee for technical services is for the services rendered by the assessee and service tax woul ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to our notice". 24. The CIT(A), in his order mentions that no details had been provided and therefore, the AO was correct to not give any credit. 25. The DR also placed reliance on the orders of the revenue authorities. 26. After hearing the arguments, we are of the concerned view that the issue is squarely covered by the decision in the case of Haldor Topsoe. Respectfully following the same, we set aside the order of the CIT(A) on this issue and direct the AO to delete the addition made. 27. Ground no. 5 is, therefore allowed. 28. Ground no. 6 7 pertains to attribution of and taxability of interest on FDRs. The CIT(A) held that interest is directly connected with the income of the PE. Though the AR argued that the HO takes car ..... X X X X Extracts X X X X X X X X Extracts X X X X
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