TMI Blog1999 (1) TMI 533X X X X Extracts X X X X X X X X Extracts X X X X ..... ct : (i) On the facts and in the circumstances of the case, whether the amount received by the Hyder Consulting Limited, United Kingdom, for and on behalf of STUP Consultants Limited for the services rendered by STUP Consultants Limited be construed as income of Hyder Consulting Limited, liable for tax to be deducted at source in accordance with the provisions of section 195 of the Income-tax Act, 1961 ? (ii) On the facts and in the circumstances of the case, whether the tax rate currently being adopted by the Government of Orissa for the purpose at 42.85% with respect to payments being made in foreign currency and 30 per cent. on the payments made in local currency is appropriate given the fact that the rate prescribed in the Dou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ultants Limited, for providing manpower and certain other services. The Government of Orissa sought clarification from the Income-tax Department, i.e., the Income-tax Officer, Bhubaneswar, regarding rate of deduction of tax while making the said payments. At the time of hearing, counsel for the applicant stated that the reference made by the Government of Orissa was in terms of section 195(2) of the Income-tax Act which calls upon the Assessing Officer to determine the appropriate proportion of the payments chargeable to tax. The applicant is aggrieved that the Income-tax Officer (TDS), Bhubaneswar, has arrived at tax rate of 42.85 per cent. The application was made by the Government of Orissa on January 20, 1998, and has been pending ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... en submissions have been made. Regarding the first question it has been pointed out by the Revenue that the person responsible for deducting tax, i.e., the Government of Orissa, is justified in doing so as they are not aware of the nature of sub consultancy agreement between the applicant and the local company STUP Consultants Limited. Regarding the second question, the Commissioner of Income-tax in his report has stated that the rate of tax should be 15 per cent. as provided in the Double Taxation Avoidance Agreement with the U. K. After going through the detailed written submission of the Income-tax Officer (TDS) and the arguments at the time of hearing of learned counsel for the applicant, it is clear that the nature of income is t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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