TMI Blog2016 (12) TMI 443X X X X Extracts X X X X X X X X Extracts X X X X ..... ith and the Ministry of Power started functioning independently therefore the letter issued by the Ministry of Power is a valid communication on the subject of Electricity and power. No reason to reject the claim of the assessee in the absence of any evidence disproving the genuiness and authenticity of the furnished by the revenue. Secondly, the Assessing Officer rejected the claim stating that the Central Government approval is not available at the time of signing of the contract. Now it is well settled issue that additional claims and supporting documents such as approvals etc may be furnished at the time of assessment before the Assessing Officer or before the appellate authorities which will be treated as sufficient compliance. Since the approval was submitted before the Assessing Officer during the pendency of assessment proceedings, furnishing complete details of the power project and certificate that the contract work of the assessee may be treated as turnkey project for the purposes of sec. 44BBB of the Act and the assessing officer has not dispoved the same we do not find any reason for rejecting the claim of the assessee. Thus it is clear that the assessee has satisf ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... jected the assessee s claim for computing the income as per 44BBB of the Act since the assessee has not satisfied the following conditions: (a) It was not turnkey power project approved by the Central Government at the time of signing the contract. (b) It was also not financed by an international and payment as was required by the then prevailing condition of sec. 44BBB. 4. The assessee submitted a letter from the Chief Engineer to the Assessing Officer certifying that the project in question was a turnkey project which reads as under: the project may please be treated at part with the power projects approved by Govt. of India with tax treatment under section 44BBB of the Income-tax Act, 1961. The document cannot be construed as an approval from the Central Government, in the facts of the case. The Assessing Officer did not accept the letter placed by the assessee before him since the document used the expression: may be construed and it was not the turnkey project approved by the Central Government at the time of signing the contract. 5. Aggrieved by the order of the A.O the assessee went on appeal before the ld. CIT(A) and the Ld. CIT(A) appeal dismissed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... above, the project may please be treated at par with Power Projects approved by Government of India with tax treatment under section 44BBB of the Income Tax Act, 1961. Further, the ld. AR further clarified that the earlier the subject of Power was included in the ministry of energy and w.e.f.02/07/1992 the department Ministry of Energy Sources was dispensed with and the Ministry of Power started functioning independently. Hence all the relevant official communication is issued from the Ministry of Power which should be considered on par with the communication issued by Ministry of Energy. The CBDT in Circular No. 552 dated 9.2.1990 clarified that an approval issued by the Department of Power in the Ministry of Energy shall be deemed to be approval of the Central Government for the purpose of sec. 44BBB of the Act. 6. On the other hand, the ld. DR supported the orders of the lower authorities. 7. We heard the rival submissions and perused the material placed before us. The assessee has signed the agreement for the execution of turnkey project with Tamilnadu Electricity Board on 27.12.2006. From the certificate issued by the Central Electricity Authority, Ministry of Power ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... wer authorities and direct the Assessing Officer to compute the income as per sec. 44 BBB of the Act. This ground of appeal is allowed. 8. Ground No.2 is related to Design Engineering Technical and Supervisory services to the extent of ₹ 21,38,263/- treated as technical services and taxed u/s 115 A r.w. sec. 44D of the Act. 9. The Assessing Officer taxed the Design Engineering and Supervisory Services u/s 44AD of the Act. The relevant part of the assessment order is extracted hereunder for the sake of convenience. 4. Claim for Design Engineering and Technical and Supervisory Services: 4.1 An amount of ₹ 21,38,623 has been debited under the above head. On analysis of the details it is found that the same has been incurred in connection with purely technical and design services. Actually, this is a part of consideration received from TNEB, and repatriated by the non-resident company to the head office. The charge is in the nature of rendering of any managerial technical, or consultancy services as envisaged in the definition/or fee for technical services u/s 9(i)(vii). Therefore, the amount is treated as fee for technical services in the hands of the no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l activities for erection of plant and machinery testing and commissioning. And they are not stand alone services which form part of the total project of supply and erection of plant and machinery in connection with a power project. The assessee relied on source Rule which was explained in [1994] 50 ITD 348 (CAL.)IN THE ITAT CALCUTTA BENCH E , Deputy Commissioner of Incometaxv. Schlumberger Seaco as under: the definition of the words fees for technical services as contained in Explanation 2 to section 9(1)( vii ) has been explained by the Circular as under :- 16.3 The expression fees for technical services has been defined to mean any consideration (including any lump sum consideration) for the rendering of managerial. technical or consultancy services, including the provision of services of technical or other personnel). It, however, does not include fees of the following types, namely :- ( i )Any consideration received for any construction, assembly, mining or like project undertaken by the recipient. Such consideration has been excluded from the definition on the ground that such activities virtually amount to carrying on business in India, for which considera ..... 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