9911796707
TMI Blog2014 (7) TMI 40X X X X Extracts X X X X X X X X Extracts X X X X ..... g to filing of this petition are as under. (a) On 22 October 1989, the Petitioner entered into a Foreign Technical Collaboration for Basic Engineering and Training Agreement ('BEAT Agreement') with Davy Mckee Corporation ('Davy') to set up a gas based Sponge Iron Plant in India. In terms of the BEAT agreement, Davy was to deliver to the Petitioner the designs, drawings and data with respect to the Sponge Iron Plant outside India besides training certain number of employees of the Petitioner outside India for commissioning, operation and maintenance of the Sponge Iron Plant. For the above services, the Petitioner agreed to pay as consideration to Davy under the BEAT agreement a sum of US $ 16.23 Mill ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of Davy held that the amounts received by Davy under BEAT agreement were chargeable to tax in India. Accordingly, the withholding tax paid by the Petitioner was adjusted towards Davy's tax liability arising on account of Respondents holding that the receipt by Davy under the BEAT agreement is taxable in India; (d) Aggrieved by the above assessment orders dated 30 November 1992 and 16 March 1993 respectively, Davy filed appeals before Commissioner of Income Tax (Appeals). We are informed that the Commissioner of Income Tax (Appeals) dismissed the appeals. The Petitioner and Davy thereafter filed Writ Petition No.448 of 1994 before this Court on 27 January 1994 challenging : ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ber 1989 to Indian income tax are quashed and set aside. The Respondents are directed to pass fresh orders excluding the income received by Petitioner no.2 by way of a fees for technical services from Petitioner no.1 under the BEAT agreement. Rule is made absolute in the extent indicated above." (f) The present Petitioner was Petitioner no.1 while Davy was Petitioner no.2 in the Writ Petition No.448 of 1994. Post the above order dated 5 May 2010, the Petitioner herein time and again requested the Respondents to comply with the same and give effect to it. The Petitioner also submitted letter dated 13 July 2012 of Kvaerner U.S. Inc. addressed to the Respondents informing that Kvaerner U.S. Inc. is the successor in in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mount payable by the Petitioner to Davy under BEAT agreement was taxable in India. This resulted in the Petitioner paying amounts aggregating Rs.5.54 crores to the Revenue out of its funds under protest, in December-1989 and in September-1990, as tax deducted at source. It is submitted that once this Court holds by order dated 5 May 2010 that the income by way of fees for technical services paid by the Petitioner to Davy under the BEAT Agreement was not liable to Indian Income Tax, then the amounts paid by the Petitioner out of its own funds as withholding tax, becomes refundable to the Petitioner. The counsel also invites our attention to the letter given by Kvaerner U.S. Inc. who is the successor in interest of Davy that it has no objecti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... April 2000 issued by CBDT substituting the earlier Circular No.769, dated 6 August 1998. However, it is submitted that the underlying principle even under the new Circular dated 20 April 2000 would apply in cases where ultimately it is found that no tax was payable by the foreign entity, the refund of the tax paid by the Indian enterprise as tax deducted at source should be given to the Indian enterprise. It is submitted that the Petitioner is, therefore, entitled to get the benefit of the said principle even if the present case may not strictly fall under the circular dated 20 April 2000. 6. On the other hand, the petition has been opposed by the learned counsel for Revenue relying upon submissions made in the affidavit-in-reply of Mr. A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... F', Cuffe Parade, Mumbai-400005" It is submitted that Arthur Anderson & Co. was a Chartered Accountant's firm, and were Chartered Accountant of Davy. The said firm has been closed down in Mumbai and Davy had also merged with Kvaerner U.S. Inc. Hence, the Department has deliberately sent notice to an address which was not the address of Davy. The officer could have at the very least sent a notice to Davy at its address shown in the cause title of Writ Petition No.448 of 1994. 8. Having heard the learned counsel for parties, we are of the view that when this Court in its order dated 5 May 2010 specifically directed the Respondents to pass fresh assessment orders excluding the income received by Davy for pro ..... X X X X Extracts X X X X X X X X Extracts X X X X
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