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TMI Blog2013 (11) TMI 421X X X X Extracts X X X X X X X X Extracts X X X X ..... , ITA No. 1087/Mum/2012. ITA no. 1087, Assessment year 2007-08: 2. The assessee has taken the following grounds of appeal: "The addition amounting to Rs. 170,022,100 undertaken by the Learned Additional Director of Income-tax, International Taxation, 4(1), Mumbai ("the Id. AC") vide final assessment order dated January 31, 2011 (received by the Appellant on February 2, 2011) passed under section 143 (3) read with section 144C (3) of the Income Tax Act, 1961 ("the Act") is not in accordance with the law and therefore not sustainable. 1. The learned Commissioner of Income Tax (Appeals) was not justified on facts and circumstances of the case and erred in law in sustaining disallowance of the set off of assessed brought forward loss and De ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s) was not justified on facts and erred in law in relating entire bank interest to the permanent establishment of assessee in India and in not apportioning it with due considering for the exchange currency risk and cost incurred by Head office on funds deployed. 8. The above 'Grounds of Appeal' are all independent and without prejudice to one and another. The Appellant craves leave to supplement, to cancel, amend, add and/or otherwise alter/modify any or all the grounds of the appeal stated hereinabove". 3. The facts are that the assessee is a resident and tax resident in Japan and is in the business of providing technical services and erection of power plants in India. The assessee is regularly assessed to tax as it is having a PE and ri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion that the assessee shall be provided reasonable and adequate opportunity to present its case. 9. Ground no. 2 is alternative ground taken to cover ground no. 1. Since we have restored the issue to the AO, ground no. 2 become redundand. 10. Ground no. 1 is therefore, allowed for statistical purposes, and ground no. 2 is dismissed as infructuous. 11. Ground no. 3 pertains to adjustment of TDS, viz.a.viz work done. 12. The facts are that the assessee provided technical services to its clients in the current assessment year, against which the vendors deducted tax at source as on 31.03.2007. However, the assessee raised the bill and received the payments in the subsequent financial year and as a consequence the assessee booked the income ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ence, the revenue authorities were wrong. 19. The DR submitted that this being factual matter, details along with agreements have to be booked into. In these circumstances, the issue be restored to the file of the AO. 20. After perusing the details and the impugned orders, we are of the considered opinion that the order of the CIT(A) be set aside on this issue and be restored to the file of the AO, who shall examine the claim of the assessee in detail along with agreements. Needless to mention that adequate and reasonable opportunity shall be provided to the assessee. 21. Ground no. 4 is therefore allowed for statistical purposes. 22. Ground no. 5 pertained to inclusion of service tax as part of the trading receipts. 23. The AR explain ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ce tax is not expenditure incurred by the assessee and it is a statutory levy on the person who avail services from the assessee. It was held that it would have been a different case if the assessee had collected service tax and not paid the same to Government account but that was not the case and it was only reimbursement of service tax paid by the assessee to the Government account. Thus, the receipt cannot be treated as a trading receipt. Hence, reimbursement of service tax cannot form part of total income of the assessee. It was held that Section 44D provides for deduction from receipts in the nature of royalty and fee for technical services etc., which is chargeable @ 20% as per provisions of Section 115A(1)(b)(B) of the Income tax Act ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... icable should be 20% & not 41.82% as applied by the AO. It is a fact that the interest income pertains to deposits made by the PE on behalf of its parent, i.e. the assessee. Since the cost is attributable to the assessee, the assessee shall not be entitled to the preferential rate as claimed by the assessee, as per India Japan DTAA. 29. We have heard the arguments and we are of the considered view that there is no infirmity in the orders of the revenue authorities, which we sustain. Ground no. 6 & 7 are therefore rejected. 30. Ground no. 8 is general and do not need any adjudication. ITA no. 1086, Assessment year 2008-09: 31. Ground no. 1 is the same as ground no. 1 in ITA No. 1087/Mum/2012, same order is to be made applicable. 32. Gro ..... X X X X Extracts X X X X X X X X Extracts X X X X
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