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TMI Blog2018 (5) TMI 947X X X X Extracts X X X X X X X X Extracts X X X X ..... s for technical services. 4. At the very outset, the ld. Counsel for the assessee stated that this issue is squarely covered in favour of the assessee and against the Revenue by the order of the Tribunal in assessee's own case for A.Y 1999-2000. 5. Per contra, the ld. DR fairly conceded to this but relied on the findings of the CIT(A). 6. We have heard the rival submissions and have given thoughtful consideration to the orders of the authorities below. We find force in the contention of the ld. AR. This issue has been considered by this Tribunal in assessee's own case in ITA No. 867/DEL/2006 wherein the Tribunal was to consider the following grievance: "That the Commissioner of Income Tax (Appeals) has erred in treating the income from the operations and maintenance (O&M) Project, as income from 'Fees for Technical Services' and consequently taxed the same @ 20 per cent on the gross amount That the fee aggregating to Rs. 97,68,000/- had been, received by the assessee not for merely providing technical services but such services included training Engineers, technical guidance for the Operations & Maintenance of 160 MW Gas Turbine Combined Cycle power station reporting f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... al and advisory assistance from GE International for the purposes of setting up of the project. The contention of the assessee that the services received by the resident assessee does not fall within the purview of expression "for technical services" as it include considerable amount of construction, assembly in the project undertaken by the assessee. Such activities in our opinion cannot be regarded as rendering of services relating to fee for technical services. Explanation 2 to Sub clause (1) (vii) of Section 9,referred to herein above, draws a distinction between income earned by way of "fee for technical services" which has been defined to mean any managerial, technical or consultancy services. Under such circumstances a composite contract of rendering of technical, advisory services along with services of installation, construction/aassembly of a project undertaken by the assessee should not be regarded and treated as consideration paid for rendering of managerial work. 3.11 Ld. DR had placed reliance upon the decision of Hon'ble Delhi High Court in the case of DDIT vs. Rio Tinto Technical Services (supra). The ratio of this decision cannot be applied to the facts of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... put remarks, if any, in tally sheets, and arranging for ship survey for cargo landed in damaged conditions. * Loading cargo onto trucks/ trailers (hereinafter referred to as "Transport Vehicles") directly from the vessels and /or the customs yard at port. * Transporting Cargo by transport vehicles from Pori to construction site of project located at Kevadia Colony (hereinafter referred to as site) * Offloading cargo on ground and stacking at the place designated by SC/or SSNNL in site. * Deliver of Cargo to the representative of SSNNL. * Performing all other works and services which are incidental to, associated with or necessary for the completion of the forgoing items 1 to 7" 13. Sales Revenue of Project Office which included amount paid by SSNNN to ETPL was Rs. 4,70,21,879/- whereas the cost of sales incurred and debited by the assessee was Rs. 6,49,46,525/-. The cost of sales excluded transportation cost paid to ETPL was Rs. 3,77,95,342/- whereas transportation cost representing payment to ETPL was Rs. 2,71,51,186/-. Out of this, SSNNL paid Rs. 1,77,86,265/- and assessee paid Rs. 93,64,922/-. The AO disallowed Rs. 93,64,922/- on the ground that liability does not rel ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at pages 107 and 108 of the paper book wherein it has been provided that SC agrees to pay, subject to ETPL's repayment obligation under Article 3 Rs. 23,48,607.65 on the condition that ETPL provides SC with the evidence satisfactory to sc that ETPL has obtained the approval from Reserve bank of India which enables ETPL to repay the amount to sc. 20. In our considered opinion, this clause of the supplementary deed cannot be read in isolation and it has been considered in the context as a whole. There is no evidence brought on record to suggest that ETPL has repaid this amount to the assessee. Clause referred by the ld. DR is from agreement made on 18.9.1992 and we are in the month of May 2018 more than 25 years have since elapsed but nothing to the contrary has been proved by the Revenue. Moreover, the Revenue authorities have not made any verification from ETPL to disprove the payments made by the assessee. Further, the said clause was entered to the supplementary agreement to protect the interest of ht assessee to enable the assessee to make a claim from SSNNL. Though attempts have been made to recover the amount, but SSNNL has never paid any amount till date. Moreover, there ar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... during construction or trial runs before handing over the project completely in proper shape. Therefore, the CIT(Appeals) was justified in directing the Assessing Officer to determine the income at 10% of the total receipts. We uphold his order." 24. As no distinguishing decision has been brought on record in favour of the Revenue, respectfully following the finding of the coordinate Bench, this grievance of the Revenue is dismissed. 25. Second grievance of the Revenue relates to the taxability of supervision fees received from M/s Maruti Udyog Ltd. 26. This issue was considered by the Hon'ble Delhi High Court in assessee's own case for assessment years 1992-93 to 1996-97 wherein the Hon'ble High Court has held that supervision fee is taxable under Article 12(2) of the DTAA and concur with the view of the Tribunal that FTs was liable to be taxed at 20% under Article 12(2) of the DTAA. The question was accordingly answered in the negative i.e. in favour of the assessee and against the Revenue. 27. As no distinguishing decision has been brought on record, respectfully following the findings of the Hon'ble Jurisdictional High Court [supra] this ground is dismissed. 28 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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