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By Vijay Kumar

Income Tax

Payments made for services provided from abroad will be taxable as income in hands of recipient - payments made to foreign contractor are liable to TDS : ITAT

The assessee company which is engaged in the business of operating and maintaining hotels was constructing Lodhi hotel at New Delhi . For this purpose, the assessee had entered into an agreement dated 14.2.2003 with PSIL a foreign contractor, under which the latter was required to render project management services in relation to construction of the said hotel. The assessee submitted before the A.O. that the services rendered by PSIL were step in aid to the process of construction as ultimate aim of the services rendered was the construction of hotel building. Such services were therefore to be excluded from the definition of fees for technical services in view of exception provided in Explanation (2) of section 9(1)(vii). The A.O. however, did not accept the plea of the assessee and held that payment made by the assessee was for the various management services and not for construction of hotel and the case was therefore, not covered by the exception provided in Explanation (2) of Section 9(1 )( vii) and directed the assessee to deduct tax at source @ 20% of the gross payment.

Limitation:

It is incumbent upon Revenue to serve adjudication order on petitioner and limitation commences from date of actual receipt of order by petitioner - Writ for Certiorari allowed : Allahabad High Court

PETITIONERS sought a writ order or direction in the nature of certiorari quashing the order dated 07-04-2003 passed by the Customs, Excise and Service Tax Appellate Tribunal, New Delhi , rejecting the application of the petitioner for condonation of delay. The Tribunal dismissed the appeals as the delay in filing the Appeals were not explained by the petitioners.

Central Excise

Mere filing a petition before Settlement Commission cannot be considered as appellant's tacit admission of guilt - anxiety of adjudicating authority to deny credit on technical ground cannot be appreciated - Tribunal allows credit of Rs 5.8 Cr to Essar Steel

THE appellants imported a consignment 1 ,76,505 MTs. of Iron Ore Pellets from Brazil & the same was brought to their captive jetty at Hazira between May & June 2001. Appellant filed 15 BOE's and was in the process of filing another three bills of entry for the balance quantity, when the customs authorities discovered that almost the entire consignment of iron ore pellets had been cleared from the jetty and consumed in the appellant's factory without waiting for assessment in two cases and without waiting for an out of charge order to be passed in 14 out of the 15 bills of entry in question. For the balance quantity of iron ore pellets, appellant made efforts to file the remaining 3 BOE's subsequently, but the customs authorities refused to accept them .

See our columns Monday for the judgements