Jindal Thermal Power Company Limited vs Dy Commissioner Of Income Tax (Tds) ... on 16 March, 2009

[Cites 1, Cited by 15]

Karnataka High Court

Jindal Thermal Power Company Limited vs Dy Commissioner Of Income Tax (Tds) ... on 16 March, 2009

Bench: K.Sreedhar Rao, C.R.Kumaraswamy

EN THE HIGH cream' 01? z<ARNm'AKA, BAD?'fi§ﬁ3@TP:"E:A ' {mm} THES om '}"E-EB :43 TH D1%:';'A»OP7éM,§HR§§H.,'I. 2i3'o 9f;. Rx P;_rZ<_"ESENT:' ' 'H V V H THE? :~«:<;>N*BLE B:i'I%€', JUST>}CéE3V'~..§{.SREE.V£3f'§.§fIéV'§i§® *:'1>:1«: H{;3N'BLE MR. J£:Sf:*:C;:r iii.R;K:;j»;§ARAsWAMY ifm T %71m.: fNos§f j;%:;;;;2;>;,1j;2.jc:(}(:§5j" ts %3<::2::-3/ 2095 Biatwzééiiéé L A A' % % J33EI>.z;%};~.'E'EiE<:i={Ivi;é.J£,ViF"{")WER COMPANY LIMITED " §£='§;5a}%TI,,1'}¥3R7' }«'Z§3(;'zW§'% AS .3n\3i;::AL TRAGTEBEL % %{%%§mazme,( CQMPANY man;

. ?{}_?,vA}i3..{3.Rfi'{)N CENTRE, M.G,R®AD, A _ "§3A.i%.§3;L--A0£§E Ame AT; 'RAHEJA 'TOWERS' ._ - .._E?:AS*§'_~&§?i1'§'E§ em FLOGR, %_ 26~:2?,Es.i{.*G. ROAD, '"BAE_~I(3ﬁ.:'i,QRE 55% 00 1 ~ A?PELLANT(C€)MM{)E\£'} 7:¥3'§% kS';a%.: SEEHAEL. 323*? WITH SEE T13. vE§~§1«:A?ESH, '._;~§'xi:T>V.i}'*' ARD:

DY. COMMISSEONER GP' INCOME TAX, (T98), BANGALORE) RESPON{)ENT(COMM{32}§}' L' (BY SR1 MQHAN PARASARAN, ASC} FGR SR1 MM. SESHACHALA, same}? s«'3::m1:>:

ALL THESE'; ITAs;--v--vA?E~.A}3?IL"ED'£3/"S.260~A OF }f.T.AC'I', 1961 .AR_§SIN€} Cgiﬂ' «:>F~I<313DEi<~:3 ALL DA"£'E[T) 18~{"}5--2()OE3 P;xs3;;a:;t;-1 us: 1% NO;-f239V/'1B7:%NC§f199§ mm THE) As'SE:9;*seI\2:§;:x**r"--.iJ'j~--_ "'~:EAR_ 1997598, {TA :¢0.238/Bgwz}/$999 FOR ~'"§§iE ASSESSMENT YEAR 199997, ~1'i:i;:x 7"§fO.'24'?'fBANG/1999 FOR THE ASSE3SS;vIx?I£7Z§*$'1' '1'§3;é«:R%1998~--.99,- ETA N0.246/BAN<3~/ 1999 FOR'. THE. ASSV}2;8_S'M_EB§'¥ YEAR 1997498, ETA NO.245/B}'§?§G/1§*99AA 'E'{'5§;€ THE ASSESSME:\ET YEAR 19%-9;7, PRiXY1P€G-- Titiﬁfi' THIS HOWBLE c0I;::'R'1' MAY ESE 39.igEA:2~.:§:£3 'i*:;1:.« V _VSE;f'1"«.£~1$i§)_E THE JUBGMENT' AND GRDERS ALL ' 333%;_'11'.{§JiZ':, '};.8sf'}.E':~:~2.{3{)5 09 THE {Tm B§'&I\EGAL<C)"RE 1233 :TA NQ.'2.:ﬁ9/E';.:%§E{§:/'E999 90R '"{"'§-iE ASSEssME:NT YEAR

- 199?.fg8;~~ %L%j3?1'A 330.238/BANC;/1999 FGR 'rm:

; faSSE1S;S'}&§ENT YEAR 19<3e--9'?, ETA No.24?/BAN<§-/199%

-.i:' <_ 1"s'tA:}R 'ETEE ASSESSMENT YEAR 19'§8«99.; rm % ..f*N{J';246/BAN{}f199§ FOR THE ASSESSMENT YEAR

- _ '3.99:?_~:.98, ETA F€Q.245/BANG/1999 FQR THE % ASSESSMENT YEAR :9%-@7.

'FH§3SE E'-'&PPE.'ALS ARE (3{")MI§'*§G SEQ FOR ' HEI§A}Q§N{,"':ir THIS DAY, SEEEDHAR RACE, xi, DELEVEREES THE FOLL(}WIN(3:-

%/.

COMEGE JUBGEMENT All the appeam pertain to same subjéét H invciving simiiar questions of iaw ';an»d' fat:-%.:. -:'H.éhg::e;'-4311"". the appeals are heard togetéjtzr fénf é;':0n1n*1(§1':A{iis';3 0s;é'£i.,"


The niateﬁal facts are as 

M / 55. Jindal T11 ¢fmaE.'_VA    Lizmzeai
{dindaﬂ (appellaﬁt     ent{:~*:re{i inta
contract  Ltd, {REOL}
311:3 <:;§:.'§;«:§;f   BHEL, 2} Energyg"
OVe1*Sé§s   and 3) Badger En€:1'gj5;

'inc. (§43Ei~} ~ §'t35I*- 'b3?:x11ii1iééia:'1i11g uf pews!' piami at 'FhQ3§§.hg8i, }ﬁ§e'%§ii::1:;z5}§}" E)§§;tr%.c:t. 'i'.h<3 {:<;:mpa11ies BEE Sa EOE fgizxﬁ _ss<;:{barg,ifc§ia1'jg«*' CO;{}:1p8i'1i€S (Jf RECEL. BHEL is a ii}:§.\:aE:I'ii:i'11%%§_I--3,t",<$§'s irsdia t1i1ﬁ€I"'€8}{§ﬂg. Jindal aﬁtemd mm '$91.13;; z:::}I1:§'act:s with REQL, BHEZL EEE am} ESL V' :f_'~ {under time <:<>:1'£ra<:t r:;bEige<} to Szippiy of 80114313, éérgtsagza i;'i1§T'§}§.I}.€ C'rer:€:rat<;:'s, mair: 'p<}v€e1* 'im,1'1sf0:'2'i1€:*s 'and pracﬁsﬁ piping. '§'h.€: EESEZE Umial' fthﬁt =::0§1E:'*a<:€5 is .8»:

obiiged to iocai servicas, c011stru<:'si011 Gf ali A4 suppiy, Sta' rt -up and camxnissionizlg. The " EOE uildﬁl' the centract is to coiirsjcf' ';3111jC'1ia:§$::s:V'ie;:a1'L'.,, Hzateriai eq1:ip1I_1€:1'1t supp};-3 and :'«._c§;~r;;%,tru?:ffi{>11, Q? REQL and iocal Sllpply. 'I'Z%1<?3'-vLiE: €::}",?YC>L L111d <%:IL'. has me 0I:>iigat:ion of v{}iif7_s}1§;:*é' wﬁ1"§'iC"fi'i1§E1eh:{ie$ {:o3:1ce:ptfL1a1izatio:1 of thﬁé :;§19Qj'r:§:;"£,fd::::§§,Q§;;_'girawillgs anti other i.ec11I1ica'i and ':3 xnake the fpmjecii also 11135': supply equipn§{"§ﬁ%, The remu11e:*af:iaI2 fcrr Se2*vi;::€3 ' $3' 56 "by BHEZL, BEE 8% RG1 is Sepa;';»1i;ejiy axg;:*e§--:ti'i1n:iier..'?he <:0r:t'.ra<:i:. The rem11:3€rati:;q:

'V mﬁsr the contract is 121166;' three L"C:&1t€:;g0:'i6i;'«:.:Vy ' V .

1} ﬁ*&::::3i@?§.::AL SERVECZES :

AA .'i;.':1';a""'E..'acir11":i{:ai Servicss to be pmvitiied {mater $16 '§€i'E§{3L were ':9 be renﬁered entireiy outsidﬁ; india arid imzizziias the": feiiawizag :;€'W%ce::s:

'-5 iii}

iv) '.3:

provicimg f3ﬁ§§1'1€€iI"iﬁg anci ciesign work i'€1:z.'t.i:;::.§L:"4 conceptuaiisatioza of the power p}a1'1%:., _'1_.--$2., ' . Power Piaxri design, Providing 8p€CiﬁC€.i1Li(}11 of a11§>mat.}é;i:§;aI«_§0':*' .%?{j§?'€;:

Piazit, based on, the: 0veral14':_i_<=:Es;i_g:n iri;:.1L1{ii;*;g' spaciific 1'eqz1i1'en1€1":'%;sV d_év$10pé'(i.__ ::%;»*.=su "the overaii iiesign, _ _» Prmriciing s1:ppii§i%:_ {j%E}\(?§>§3:tiE:):iS.".'E'3_,f1(i H:§."£>{;umex1t reviews 1:0 Veriabitaw §.vi0:_:1;;i'iiéfI:1C::='...:Vi%ij;£§_ 1.spe<:iﬁ<;:a§i01':s d.eve1ope;.d' t1f;€3~».%}fs>§2s§€:1*2'§51a:1t, '3upp};y'if1g;_ 'tdwéziabie i:03:egra'tioI1 e:'::;e eg};i§>,;;1e'h§4t Qi':v?:eEfsiipggliéd to Jindai mm the dsfergaﬁ Piazﬁ ﬁiasiggi, ané L§11de1'i:aki:1g' §§?¥EffJ:3i'éi¥ii)I1 of ﬁnai ciavcuzizerztatiaia of ihe d 56;{~"éigi"1 {§f ané ezquipment ileaessaxﬁy ' ' ' E":}wer" V U}? S'§3RV1CES :

of Start-up Services {(3 ha pzmriéecii "$3;

jgfixnajiiy relates to xxgfzzaé; is iqiowri as heme Qffics " --..$':a:ﬁf--up support. ﬁzcmrdiiigiy, 'RE<f}§.,-'s home offizze in ..,_£'§1€ US \3:Gz.1}<i indicate €31 {ietaﬁ 1:316 §))Z"CsC€§£1I'°€$ csf star: 115:: in $36 carriad Quit an sitt: by me start up contraczoxg an entity diﬁ€1'€Ilt fmm REEEL.

The Starﬁup S€I"Vi€€S provided by REOL under the iiianfract ir1c1uc§esj~"'%1f::>: foiiawingz ':2 i3ave10p:r:1er1t of :~3c:c=pi_ng Packages };§2fhsre!j}e*I E1116 vari<)11S iIiSYi'11H1€EI1'E&'I.fiGI"}, ;é%13;§<:'?t1'i<;3;1', .:m .%3CLij1aI'xi?j;aiVL'~- and equipmant. Iistings werfz gram afxcf fllffhﬁf' broken dow1"1 _i:v;'§0 éub;$yfst£{:i:s: xfQ;§': jlihéi purpose of conzmissiéfziﬁg by) up contract; _ .

Laying out 91' test' varieug Sui:--» systems, 4_Sjs:3'£e:11é;;'"£:?g:uip1f§:»s:r:f I afizfl cemponems, <:'<:;«:r1'tu:».>si.z"3?;ee:?i'7."i§'I_» t;i¢t21ii€:d *i1:istr1T1r::'Lions in the {am} 6? 11133211333 azié ;i:aLd°t:«.._a7%'éj.1ab1e to start up <::cer1¥:3:act03: _ Wi1¢;> is ;fe<;;;1i.i,re5c§. :5 feikew the gvem iI"iSt{'£§C'.?Zi{)§fiS ' {:m1tra£:§%<}r has 110 atiﬁioriéiy Wha.I,$Qé'J€31" to deviate fram ms: iristmctioris givsﬁ siazmid ail}! diaange be requiréiii me:

$:.§§2;:r';::=, j}=1i23::§ 113 £36: appmvad said 5131}: aij1Z§1€}i1'{i{":£3;.'{,f3{7§ %%1%%%é:2;>%T §.3,§;__ i§'%E€;>E, <::':§§;}; arm:

"~._'7E'E"1<i pI"'€S€Z1C{:' of {ha ¥(i*,E1{iQ1' GI' {hair §'€pr€S«en'3;z3iive3 AA 3: india d'f..i}T'§IEg £226 5sta1":.-«u'§ pmiress sheigié ihaz {z<§_1_si;:>:nam:, sugpiiéci by %::'*;':e véznder ha 119': in a p0s§."£:.i01'1 {:3 he f3OZi§.II1§'SSi{}ﬁ6E{i. 3} {3VEE.%3§;LL I~%ESPGI\§ Si1i%§L3"§":' :

4?/, AS is g€;:'1€IH§l3:" 81:: case in most large pmjecta, the ovarail resp011sibi1ity E:'z}'1(i managemem of the projsct, has been ageed to be undertaken 'ay RECJL.

services inciixde the feﬂowirxg:

i) the overal} managenaent of t.1f%aA»V;f)1?;c>_§e(:'t:V,"'"CW iii} the ovarali project. risk nxanageriiéiit, ;5ai';{.i3A'::.;o%4'z:i'2{gs::'V}A

iii) praviding c0111p}eiid1*;.:%? \ piciizlt perfarmance gua}fa1'1tees____:f?:;£§_'1:ef: iﬁuivgfsut and €ff}.Ci€i}(3°:,:", V _ V _

iv) pruvidizag Vext€:1"1d ¢;i' wa:'1'aI1'ti::s provided < ';o"_'. $16 staﬁéaré €316: ©quip1::1eI1%.: sagppliem, at} maziaggfag ':§§i$."V}}:Ii{3jé"§.Tt.'b}T in1;£:rf'aci11g v-aéth iihﬁ £:at;h.er _;j¢€;r1tract5C»:r$ '§3z1 E116 gob site, 011 a éaiigs basis, V%3'i1¥*{;2:1"g§1_ phofi'ié Ca£1s and faxes, am "3: weekiy anti mozitiilly stains rcperts ""%'i$sii1c§éf;'§;_ the other contractors in REQL for its re*;:ie'£a£and actien.

A ' ' "~ .'i'ha JEEQEAL whiie making payments to REGL ﬁﬁdﬁf the cantract fﬁi' $316 3135683131611: 3563:: E996-»9"E' initiaiiy daciucteci part of €316; tax }.iabﬁ.i3:y by Wagi of '§'SS. wk Far the 8.SS€SSI"_'{1€I1'f. year 1997398 :30 'F138 ﬁaductionss are éfihcted. it is the cantention of ma appeiiaiaz that, the initial r€mu:r1eration ageeéi to be payable _b.3,?_ - REOL Uméer fhft contract for teshnicag} .

'28,27{3,i3€}{3 USE), far Start up Se:*xri<:es 7_-,'¥if)£3,3}.'»';.7E§"=?,§"SI;s:. 33161 for Overall Responsibiiitgf contract vaiuc: fur '§'echrﬁe.{§i~V..V_%Sei*i£i(;¢s to 14,434,550 1333, for Stgrf: 11p~---E":$.é1'w.%ic¢s :3,'%;:;"+::--;§3::=i;":3 {ESE} and for Ovextaii ReSpG11s;ib§:ﬁ":3%L..1 U313.

At;1:iﬁ6i*it§-* issued Naiice in d§Ni"3;%LA'-:f;aﬁ§11g.__'é;;§;é~.T»i::s j"pay tax in l'€Sp€C"C 0f the :'eI13§%::'z8T&%ia%i Sérlcf: {ha «}§NE'>AL had 119%, '_ as required Iliidﬁi' iaw. T}'i€3}T'€f{3§'<f§, ﬁle:

25%;:-¢:jE_ai 'v=a§§'s:32%s; with resp<m$ibi1i'€ias ':0 make the 'tax payE=n€;1i:__: :;n«:"'the account. of the REQL, n 4}" ¢'§'hé+: Jiﬁda} piaaded befere the ﬁsseashig .' éfiéiiiizéﬁtj; that, the gayments Iiiadﬁ to %"€:E1{}L €§(}€':3 :20:

2 "'3;3;:t:'a(:t anj; tax iiabﬁiifg 53$ i'§'LiCh 'E§1€1'*-Eff was 3:15: z:§1::§§; can the §_>a5'=E. of the ._i'i:1da§ :1: effect "F'D8. Téie .§';S8€SS§E"ig %/ m.1's.hoI*ity rejectteci aha CGI1t.€I1tiOi'l and diracted,-"£1323 Jindai ta make paynaeént. 0f tax on the accauni: ;:2.f~ 2 in the appeal fiieci by Jindai, CIT zfejscted ' of the Jindaji and 1161:} that the pa3.;ﬁ11€iE;t:a«:V§iEaC:é~ attracts sax iiabiiity u/'S 9g i}V(vi3;_){C) ::.§::ee :~3:r;:¢Te% A the magma i3 accrueitd in EI1dia._ 'a:1d €316: "$c:i*vi{;;es are uiiiisﬁé in Endia. The --£f}'f'-1"' a-Esq. 3iéj«»::_<:?é; .£%;i:£M the: C{}1'1'E8I1ti02";

that Services of REEOL x=r.;:3:1:I§1..:1é'; iefsiiie' the ambit 9:' micze xggiéag 3-;}V'i;%ji.{§3o;1_4?:§iev"'Taxatian Avo§<ia::1s::e z%gre:e:'::1a::m.}. _A T'i§'E.*:;%t _;:»3i>5n:,:t 's;:>_f' the assagsiﬁg Aazthority iﬁ {:<:,»:1ﬁ1'3::1eé .a:':r§ "{§f:€;é;;bpéa§;__6f';Einda1 is rejected. §I'£€': Jiu::1d aE "§:ef§'re {ST and ETA'? {§11z::=::sm<: 'Tax &§%s;>;2?é'iié1£5ééL[%A '§':'€[bunai)&« had camiasseﬁ the folicizswirlg g:§01;;§§7,:{1si'v"éf§€: ..QIi;';i3.1i§figi?: Ehﬁ order sf assessment:

""é"}§*:r.:_ ES £12131: liable 'ta aﬁhct 'TBS in {ha '~:L}_3:»1}--5:i1»:-:13t:s made Tie: the EEEOL because 'the Smxrises 1"€:;:1{i&;:'€d by REQL s.>§20ui.<E 213: cams: W33: {ha }37L11""5i§(":§%K«' sf Sac. 9{§}{$ii}{<:}, in arder ta a'it1*aC'i. Eax. iiabiiitjg, E3 E3 essentiai th.a.t 5:16 S€I'§fiCES by N:)n---rtisidﬁxit <:0:npar1y{NR€:) 311011151 have renciemd in }ndia__._;a:'1d utiiixzri in India. in the instant case, the t:at':i'i3f1§.¢;c3.} S8}""ViC€:S art; not rencieraii in Enciia, although 31% Vss:E: r'€ii":éS'*? V' am ntilisetci in india. in this :1'égar<i 'E 1T1€3_.4C1 €:x'§i_SiV{3'IIi:'.~(:33 Suprerne {:{}1.1I"§. in Eshikaw'aj21f1a*_ Hai'i_ma.. ~. Et1<:}ust1*i<3s L¥:.d., V/S. f3i.I'€CtC}'£i Incﬁmé'V.T:é:x;":,§?iti§i:bai 'V repormd in g20<;»7)3 3:25;; 48'.'i"'i$";;§s§}§;$ii.._on. 'L (2) In t,f;s§;":v;.1teI°3:=:ét.i2:-5%': it €§Q.ﬁ.f}:'E€3'iTiCE(:3€i ézhat. the §6C§1I}iCa.E'i"€i1r£§_€"Z:i'{3§'1 aka a:1ci1_1ar§; agacé subsidiary "as wail "as ~i13.6:>:tré"::§aE3}3',< éizci esseniialﬁ,-* éinketi iii?) the sugagfgﬁf prépéfif'. ﬁizﬁrefare, Ejfléﬁti' ﬁrticis 12$) sf » --;:;é§?,::1e:1i,$ mads 0%' RECEL iafﬁ fsiiifg ex Ezmpt.

~. 1'?A"E' had desideé {he apﬁetais an piaiﬁ;

'i.:1i_:é:*g3f$:éi'i0:: 01%' the p:'«::>vi$i<:;11s 0%" S£3ct.iG:1 <.'i{E.}(%:ii}{c§ of 2 aﬁéi at that _pG£n'£ af Eimt: the €§:~:~(:iS%€;:1 emf 'zfnét ii§:?1*;::+z=eI::€«:: {_'::::::;'E in '§:~7$:i}<;au:a}ma Eéarima Eiaaxzgf §§1iiE.ES€f§€§S §_$;.<i,, (33.86: 1 wag zwfii fy '*€i", I'€1"E(i€1"€C§5 :1 (hi the aEt,emat:e contemion it was hem that, ms Jindal has not pmﬁuced '£116 custom payineilt rec¢3'i;3t.s to prove that. the technical sarvicas rendered was part if the ptrice of tha equipmarzt imported. In the abserice of such exzi cit;:1{:;~::,-1it.--yéas.Vf:eid that technicai SEI"Vii:€S rexxdaréd déc's ::it:~>t co:fts§i:§3ii.1'€,1;=: ;;-a';«: V sf E2116: cost price. Tha 1*e11111I:é£é't,iQ:1 ':<ﬁ=.?a"raci3s té;chni{:a} serviceg i3 distinct. 8_'{1€}--.._if';~':1€§1--$E3i1f§t";'§.i3*.';E_ 336211 the cost price, :5. Heard_ Sr}. '.f31;1 i_1aii' ..I):L:ﬁ§,"=,c"<:3£:3::.--$6i far Jindal and Srgi. Méhaﬁ Pé{ijé$ai'~aj'i on _i:Eié facts am} Eaw irzvoivad in ma case VGI'2.;ct3f:3i{ia1fi1;.§;'the submissions at the bar, the i'«:;i£03vingf ;;:<3i:m:,S sA§'m,1}d elrise for censideratimi:

":§ " tfrxﬁt paggments made :9 REEL ai:tra$?:$ tax "'::a;_E;:;.}A1:.:;«" ﬁgs 53$:

}(vii.){€} rfw Expianatian i;{} 860. 9&3 {Bf ?.It1<:?""§."i'.,._Ae:-'f. :5a_1'1d whether the Jiriciai was abiigsd {.0 effect i%:i%1_:3 ;:=ay1::1e:1is magic: :0 R}?3{}E;. :1/' S 195 sf the £3': '.53'he?§'1::z* the Sswices 3f't3i'1d€I'€ifi by ﬁéﬁiéij art: aigciﬁamj 951$ §:1€xt.;::é<:abE§: mixeai W1'3.i'1 {E16 cast <1?' Efriéé 3% equipment. supplieci as such thasi: payxxlent is .4 under A_1ff;i<:ie 32(5) ofiihe EJTAA'?

3) Whether the dindai has lciéLiS'4sfaji1di.;«f5¢ " :1&1¢ %r;qeF%~%¢ appeais against the orders in queéf:i0i1'?" 3 The provisions of Sec. ';{Vi_i}(c)' a:_11"d :.é:xp'EEaIiiaiii011 to Sec. 9(2) 0fE."}'. Actvél;'eA.€X?i4%§¢i§:§3.._1ﬁ§sér§u:1dé:':

'*9 ---- EETICQEEC <ieen1,§_d 1:9 :§.§:iC§;'u4e"~.{ii'~§:'iéae in En(}ia:-

{1} '1"'i'1€V ibiigwirig ii';{;0::1€;$-_V_sE3a1} b6 cieemad is a<:€rut:€_:r arise h"i=d'i"a " _ ' ' ':»:.~-1* » :2:

{vii} }§..:;:<}.t}f:;'§: of 'fr;=:eS§ f-£31' tacimnical $E3I'ViC€S payaE3E<:"t)}; _ ._ (ti). '. V . " X X [a}«ap€:rs0:-.1 x;;=5h:;>_ "is a"i10n~r<:sidé:n'::, 'i.?*3'1€E'§ the fares are ;}a};ab1£f:.. 3ie:s.p@{:1:'<}f services t.1tii1ize3d in 3 buginrisg 0'1' ;::;}0f%:s$ic:i1"car:*ie(i an by such perssm in Eadia £31' for ' V' ..3';[}f:r:~:.L_;1§'L1z:f§:A0:,=e£$ of ﬁia-iiégig 01"' sarning m1}? im:a3:1'1@ fmm any .s7:>.:.:1"<;zr:§ 1:"; india.

~. __ xxxxx xzqxx Ex§.>Z&:3.aﬁoi1.~ For the remotrai cf daubtsg it is heréby'*-- éééiafﬁd that for the pwpose of this erection, wizeré iﬁcarne is deemed £0 accrue or arise in India. under .. ¢£:;::;$es{v},{vi} and {vii} cf $323-sectéonfij, Sash inmme ' -.s§:.r_:z,Z3E' be izzcismaeci if? the mfai ismame 0f the nonwresideeng whether or 219: the 39:1-resisient has a, resicienoe cw? piace V. céf busirzesg or buginess carmeacziion ﬁr: fndia. 4/% Sri. M31131: ?arasara:1 referred to E*vi<:m.e:"a11du121 <=:x;31a.i1*1ing ihf: pr0viSion.s in '$316 Fiiiamte BEE, 200'? relatirzg to the e:>:pEa:1'1atic>1?1 irxcolparated :0 Sec. 9(2-}___ of ihﬁ Act. The rektvant material in the Menzaranii ., ﬁX§1"3Cf.{fiC1 §§1€I'€L11"1d€I'I RA.TI{}?~%AL1SA'1'IC%N AND s1MPLi'C;rs;?La':§é ;zéE:§'.s~_;s inccsnié deemczci to 'c"i€CI'E1€ or arise in I1}1C1i'§iK§'§;€C1,3iii1i} "§}. '1,;r<>'v£i$¢§5.:

for situaiians where income is<iim::_med" A30' V'a.cc:1cé"c;;'.gris€:§ ii:

Endia, Vitie. §3iI1a)Y}.C€ Excig 19'?E3, a ssi?>:'i'1re:t?, 1":1IC.§x%%:1:faV-pr.t§§sid;:ed in 131% said section t.h:*0ugi::"i;1}.se2"t§:§:i é:§":tiét1ses; {*;:},"~{vi}v a31d {vfﬂ 153:' imceme: ﬁmm i:t1't&:'<--:§s~?:;«' T €231" mchnical $€1'i§i('€--'.:§ . it :§$.=;sf§31*Qvid€d'Vi1§:er _a}ia, that in case of paymants of im:creS?':., rajvaity-' Crr"i'r3:é$« .§E§1T,4t§:.ChI1iC8i SEiZ"ViC€S rsceiveci {mm

3 resicieirzt §a.y€31%Vi11{:;r3n3*: "\%23§é.i11d he ésemczi ECG amzmze GI" ariss in §§,1c§§.éi, ;€xCe§,¥'i .. jg?-}i€:re' 'iht: :i.31te1"(-7:s'a: or 1'¢:>}»-'alty or fees for « ic:%c1i11iCaiEf"3&§tzices afémi'€iaia§31e ':0 a busiaﬁzss car prczibssiori €}"E"3;, }513>f§f"~fg}1ff. l'E':Sid€fii paysr outside India or for making <31° .€:ar11i§*1g"_'*-a:;;3.2' income frem any source outside: Endia. xxéiﬁiztx fizst iegihie for {}?§)iI1g) i}C"I'€t$§3€:Cii"»?€ of the situs

-of {he z§},€2#;§J'iC€S, the sitna sf the payﬁr and the: Sims Qf 2:316 ~ 'utiiisaﬁez1 of sawicea wili determine tha ta); jurtiséiction, . l§'I.1f't1*'iér, Section 3, which tieﬁnas scape: of tetai income; is u ...s.1£bjec:t to other provisisns of the 39%., which wczzid ixieiuiie S{i'€.'ii{)I1 9, and the income: 56:2:-mac? E0 accrue er arisé in i'.ﬁ'{'B;':§§ of S€(?.'fiGI3. 9 gas covereii mader S€§C'§;i€}f1 £5, iiléfiﬁﬁlff {mes 119%. have ":0 act:113§1§; EiCCI'11E C31" axiise in India to be d€emr:i1. !;0 accrtie or arise in india.

Sri. MGh81'1 Pa:r*asa1*aI1 argued that the H i11csrp0rate<:i by way of 3111EiI1(i1}S§.€Ji1'1V'E 1;C.. E3.¢(:~:q i_s" '€.0 '. 0V8I'C{)1'1"I€ £116: Eﬁrggal ia<:L1:r1a_~ p0i11ti:xd "gut Eb}; .'Su7p:'E-me V 'igurt iﬁ 1shi.kawajma's case: .{ti*§.'s suﬁmiiteii that. after in(:orp0rat.i9I1 0%' Sec. i3:. iS J15 1::€<:éAs$a;r*y thaﬁ; the: cri.'£.€}:'i01'1 of ;fer1d_exii.,:'1§ oi 'Vs€::;1zi;?:¢"§;§5::V.Ef:1e:1ia is :0 be estabﬁsheci. is fix' 4:3): liability, i?

we s:«:gfviCé'$ = .é:_:f:i: '€'f;;fjEiTSeﬁ' i3'1_i:'idia. 111 such cage the iI'1C€}i'1"1¢';§ is (}'ee:fi;e;i"f.§:.é(:::ﬁ:.€..-:31} India. ,S1:*i. i'v*E'{i}'1§&I1V.i??'31'é'g.$aii'.2a1"1 :'c::1ie{i 011 the iiézcision; of the §%«Q:i;§3'a_i?'L'A}i§'sgh iioiifi 'in Cioxmxzissiener af §n<:on1<a "Fax 1 i-V;>'fTi.<:%:,V':if':~=:~":Vi*2:V*-V"f%}€iiangese1}schai't repermd in Manupaiilra Mégm /.__§;I3"l{}~"1L2"?1,i?2{}€38 g2<>t:>s}22<: CTR {gem} 42:3 to H "c.0:1t.&1"1éf=i--- "that the €X}}1a13,ﬁ1LiGI1 iI1C()Z{'p{}I"8?ZI3d '£0 Section '€?i_V(v2'} "has {lane away with the ratia iaié ﬁ0¥¥?'I} by ihfi " '"E§L1;::«r*€:t:;.:: (hurt in Eshi}~:3.wajm::1'$ CESE. Jr On facts, it is submitted that, the BB1 85 EQ:. a:r.::

the subsidiary companies if REOL. Despit.e:'_"ée§.1a:§§,iaV__'* _ and indeperxrsient contract cf BEE} u the terms 0f{:0m:ra<:1: cat.egorica113}"'~,i11€}i<.":gité't1iat"th€ companies were acting OIﬂ}f"'*~8}S agents iii successfui erection of me 'v.._'i'E}¢ tafxnsvvof éiorxtract pmvided that the B};§"i ﬁaii .. 9' .119 independem dj.scre'ii013 in thc::Vp:focesé't3f'~é§:'<:i:*;j;c=11 'ii11'p1ementa1:io11 of the pr0j§:f:t1."_«4._f°éE"1%i~_V194&p;t<f::ss:nE;at;ii{eV§>f 'aha REGAL was to make ;;.¢ri:>(iic'a1i'.s;*i.$it$:_"i;:;T '<:~vm'ése€: the work dame by BEE and EOE. E"i:.__;S that the repiﬁsentative has é_ t}1€:_»*:*¥::sp{3I1sibi1i't}*.Qf__Q#;€r$eeir3g tile proper co--03*<:iinati01'1 sf §;,fi-i:§§e:a;g~::ft?i<:.i_e$ involved. The, contract: stipuiatas that 32.6 i¥'E43€:>L"§1aV:é1' {me over 211} turn Easy responsibiﬁjty. it is theréibfei, argued that whaizever work executed by 'REQL A "if its agﬁm BE} and E631 is deemed ta have x f€I"1d€I'€d service in 11161331: and utiliseci in India by &in<iaE, Tiaus silppoztad me: csrder cf the ETA in fasteriizfzg 6% the tax iiabiiitjy' on Jindal in respect ':0 the ..

maﬁa £0 REJOL;

It 1§?3.S str€1mousi}é COI1t€3ﬂ('}€§.€J§mbV111:i'€it._ﬂ*1€ have xuzequivocally heid thatﬁhe .}i11da} haS sA2ipp:*eé$é'é the c:i(}<:ume11t.s relating to 01' far the materiai ilnport. téchnicai services rendereé by "5{)I'3.'§}S par": 0f the Cost §.3:£'7¥i(t§'A£';'i": "'r:ight1;s; rejected, because produced {ca prove the .i1:_' fightiy' heid thai Jinda} is not enigma m§e:§e:i&t% Article 12(2) of the mag. _ Tha§_;ja§3z3;*t, it"»i.ss§ $i1'bi:1itt.ed that Articie 1'2('2} does get €I1*.Iisz3gé i.<;t'a}V €Z5{€iI1}3*?I§{'}I"E. 1-ience, wen accarding iii} cammt escape the iia'b§i'£§: :0 page Tax V . in r é's:'-peét. csfxiize pa§;n1€m:s made EC: REQL.

" 4_ 'I'1'ié: c;i&:<*:§si0:': 9f the Sizprema Court in Tha

-' éggajﬁarai {Z'i}1a:11§3er of C€}}ZZE3II1€I'C€, L255, 2513. C§aRpa'§ Rai " ~ Triira La} reported in onlérze Eéarzzipathra M'ANTLI/SL1; Oﬁﬁéj 195?' and the daczisizm in 'F216 Tmnsmission C:0rp01'*a*i:ion, of AP. Ltc1., 35 Am'. Eff ' '.f"L:§*;;T}é, C30;{Ii1EI1iSSi(}}Z'i€1' of inconxe Tax, Al). report€d'~ _in. 'ﬂﬁ}§f1€ "

M8.mupaf{.hra MANU/SCi/£')483/1€}3§§":€.1_ ".;;o1;:.i§=;;:;1:i_V:t1<:atf'-, A ..:rm<:a1 has no right of appeag, me p1::°§::1ar§; %::ami;§%%Lta§ % A pay tax is on REOL. 1:. is; the wigs--- in iaw E10 {rhalienge the 'f'I1'§: Jindal was 01115; to ef'€=;cfL_'FDS. fapresemgative Capacity '1'1";¢H" High CORE': in Voeiaiﬁje B3./'., \2'/ 3. 2317301": sf irxdia, New iﬁaihi ia reiieé can {:3 (:0nf.§§%ﬁCi EE'1at."w_'_Eién {here is 5up§31'essi0I1 0? mai.e:*ia3 «:i;;:{:::11;3.§ér:.§is 'ar: &dVf':}f'S€ i:1fe1'13:"1(:e be cérawn against E136:

.p5i'€j2»e" {.§?i"iQ€§»._§1.?{S' S11§pI'€SS€d the dacumarxts. in this g :"c:T:g%§i1*z§.i,"'*V'i;fj£:, i§8L1E}II1itte::ci that the custom {hit}; docaments A V.ha'*«.L.is'~:f+:A been S'££'§}p*"£'€'3SS€§. 'Therefore an adverga iI1§€I'€ffiC€ u$:i1 s£1}d bta dram': agaizmi. éindai.

Per contxa, Mr. iémhail §§}11U:j, csmlsai far Jfmgiai reiied upssm the ci<=:~Ci_si01'1 of the Eﬁgmbags High Cam": in Clifferci Charles V] 3. Tha Bepuiy (E01nn1issiaf1':§"r"-« €;rf"

income Tax oniine Evianupathra MANU/ME to c0m;er1(i '(hm the mtie of ::;)r€'111e_,. (i'-x}:ﬁ*§;--.i'.i1:€~.. Ishka.wajma's case regarding t".wi1*i;.__cfi.:;éria k;;f I~*€I:d€1}3;i1_§~. sf service in Endia and its 1:"Li§isatio11'§:i T§;1iéV.'>}V1 a;S 'neat V hﬁiﬁil Q0116 away E:/._.1j1'1Ct;s§:9;*i€)1':;ii£i<}:1 of explanatiexz is See. it clear that the tax SI;35ﬁZ%§:CC'"£vA%;{%;':,ﬁ1§§__V:1§}§';}ViSi0I1S cf Sec. 9(i){V:ii){c}. ;.Mk"';e§;Lﬁ§::es laid down '$3? the. case 33:11} hakds fhfﬁ field, "1""§"2,¢" expiairiixxg {ha previsions ait}:;§:x'gk1 déC}a:f€$"'*{h321t..fh€ exp1a11ati:>n is ﬁacozperated tQQ_'L"0vé:*£:o:1:&._ the dacisizm of the Supreme Caurt. '£v1I(§'i§.{é\ri€;i?;'« .s _1,2§§11:itt.e(i that the Gbjscm arzé reasons stated aré'"r3n§=§,9 %::»:"ier11a} aids to be used only when thé: 'text inf V' 3;1";a_'<*-;_3a's%2'"" is ambigue'u$. En the iraﬂani Case it is argued "'t?dé:?: the axpiazaaiiien ii':Cc:rps::.~3:'ate£i {R363 110:. offer any 7&I11§3ig"mitj; in see}: the assisiiarxce 0? axterziai aids. The piair: ffiadiilg of 'aha ;:rmvi$i<3n makes it uizaquivecaé Ehat. K p::)$i§io;:: (sf tax iia':)iiit}; ciarified in the €xp}anat.i£§%i'.Tis S11bj€C7Z'. to the p1*<:)vi.si0r;s 05 Sec. 9(1){vi;%}(<::). "ﬁgs: creuiasei for Jimiai refelfreeti to t1:<'=:s.--0i;§£s*s:§:'2r:§ii;i.o11s' "

made in pa1'a-~.':1 of the judgme£1f.A:0i' £§;1 ~f:f} in {':<}m:11issio;t1er of incorxie aB'c311f:.g_a1 /Vs' V§J€:S1}fi31"1 E;ngg.C0 (P) Ltd. repQfi2§{i -331 AIR. S{f: 570 and the provisions of __r/W Sec. 246% and 248 of I.T._11';qt. to,'§i1'béé'§:;§i?;dijaté:..:.hé' :1€iC;}I1'iiC}15ZiG{l that. the Jindai :'>i':.§9_,§.)p.¢aE~._«'i;i' vti'3.e 'i'13V1--at.te§', ait}%"1eug.'r1 ii ;3€:£*'w1§f:.3 ii} ._Qf EEGL.

{}§1u"£lf43€i _{;3;:<:si.i(:::1V iGcus--sia;t:ii§., the zzsctia izaici ~ . '_ (30% 13: :i.::""::E":€ die"-::%SiQ:1',-:>f' the $'§j£p§"EE'§ji€ Qiourt in Aggazwaé '{QZi'1'a':;:11E3{::I'~%{;if "<£§Z:;}::m1"1e1'{:e cage izas; 1'10 app1i<:atI:0I1 ':0 82%:

::m' ﬁg.-:31eA.*§.V '§""§2(~:: facts in {£16 citﬁd case <iis.;{:iGS€ mat *{.§.'":<>: 3"§1'"1§1.. s%;'e:z11:T i1"Ii'E{} éiqziiciatiam. 'sﬁffziie ac<:oL:1'1é.é:1g {ha " :«1;;:1éi,:e~4a.13::'t'i3 {:3 the §;i<;:T:§<:iai.:3:* {he a;:r§_:3e§§a;:';'z. §'3;3.€i s=:é'i'€{:'§,6:<:i ' 'E'j?1?fsS. €;}fff:(:i23i _§;i{;1_:%dam:' érzgisémg _'§i}8f£3"i"i}.€':}';"§. 2%-fiihmzi €:f§:E»:ct.i§1g TEES. E3"; iizéi ifﬂfﬁﬁxf, £3?" asaici fa<:'{.3 ii'. is E'):-33$ E,§'}&E, <i::dui*:t..%2';g ms: 'FEES fmm 816: ;j)ajem1e::1t. is §1.2st'§i3%€€i. Thii q11€:s{.ia;1 {sf tax iiabiﬁtjg 35 essentiaily an £33116 betxgvgen fiat: asssesstié 0:1 Wh{}Sﬁ accoxmt TBS effectetd .4 E'f;"iV€I'}.'iIEf3 .

in the (3336 of 'F1'a};1smis$:i0n;'C6fg;»:nja1;ion éfi' €19 '£'§.Aii.,, -; Case it is iaid dexssm that §l'1£:EF§3 a iiébiiiiég (>11 t{£_1€:.':as?sés:$€~s:V"

ta eifect TEES in respect af the5"';3:g3T»§.;'»:11erit%s .1§1aa:E e;: éithers. In para-~14 0f the ;':1d§m_eI1':'..éQb$€i4éfatiaI1s are maﬁa:

"' Er: :f:i$f§1iei%£ 0._f"*fi2:i} 's:r:'at:é:r"'t}1e ﬁigh éfieurt. has given decisizﬁrs. t};":aS:.$ {1} =._th%3:'--~-asssiassee who ntzaéie thfi payI:1e;:1f,s £G"<i_h¢ %.":f:: egéﬁon-residents was under the 0b1igati%3:1"tQ 'déiismt saurce under Section 1.95 3:' iha Act if: '1*as§:2a{:t§<:§'_ ésuiizé paid to them wider 'the c<:::1t:'ac:t. €§i€§Zf<?Ci iiitg; {ii} the ebiigation sf {ha r€spz;::1Li§:1t«a.ss§3:$3se& to cieiiuct tax unaier Sﬁcticn 1953 is .._0m_1§; iii ' ~-.;f--}.;.;;;:rr0priate pmportimxl af izzcoma 'Cha,rge2i§}ie_ under the Act are <:t01*1:'€c':."

' T136: 'éziiiaiszjisian however' dares 110%; £21}? davam that the ..,;;3ers0:: i_Ass abliged to affect TEES 11/ S195 has no right :0 Vqtiaﬁtien {he assessmani: 0f tax 3i3;bi1ii:j;. Sines in Easy, if __ff7;"3S is f1(3'E 6iTec::'{.e::1 by the payer iéindai}, the }'3&}?€1' wauid be uii;i:11a1:.e1fg r$s.p€::1:1sibi&: :0 pay" the tax iiabiﬁiifg' «P af the: pa};*e${REOL). T116 <::o11j0in1: reading 95 Section 195, 1201 r<=:=a.d wit}: Sﬁction Q4¢5(1§(i) and Section--.248 nlakes it cigar that, $116: Jéndai a3 a payee has e§feéf§.?"

£0 qussticzm the: tax liability cf its payee té._ 'a*.=*cfa§i"'€§t1é"_f Vicazious <:onseque11ce$. "F}1ersef0:*émtI1€A_(i{>1"1:€1'iti2i;r; 't}*;af.'g _Ji.11da1 has 130 right of appaa; is 1:0V4§;~e:i*€*;jecte§:;i*; ~ '~ The expianation hzsorpérﬁtad in Sac;-§.3.('2)'1V§1eé1a1"es that "where the inc011i_é~~..1s dbexﬁeii ti?'-aCc:*11é°0i*' arise in Enﬁia zmder ciauses {V§{§fi)§jifiif§ o£' ' 2i11'b€~Sec.(1}, such i:1<:0:11§:"s;I1ai.1: 5:2 i1?i:ci11{h-:{§- in 'ti1:;a-iota} income of £116 mm Fesideﬁt; iv_E1€:i:,§?.1eV=:s"«.":;*::.§f"n¢i:--.%:h§: residant has 3. I'€SidﬁT_'1C€ or placﬁz Q? §:21i':~si:'1£:s§ ' .::3r7-.'_t;t::*;if11t3sss comzectian in India." "§'h<:

V' '--..,pie:éI§' :,rs:a«:ii:1g '%:$2:"'*"*i*§i*:e saiﬁ pTO'\FiS§G1"} Suggests ?':ha§"

é'1j§I,é:*é<§§3.¢V_M::§V'" ~z'_e"::~i::1€r:ee_, P3366 Qf §3'z1Sii'1€Sf3 $1' btminﬁgs £G;1;1ec§..i0i'ijyjf 3. 11<>§1~3fesid€I1'E: in inéia ﬁas been (10:13 aw'ajy7'a&§_%iE": far f:':3.S'{.6I1iI'Eg the fax iiabiiity. Hawever, the A' -,,C:*i.¥§i*ia sf;'€:1{isri:3.g ssxﬁzice in imiiia and {ha uiikisaitiam. V. ,,.<if the S£::§'vi_ce: in india Eaid dowrx §C}§" tbs Supreme Cami in §sh§i<:awa§:m§'s <:a_s~::: ta aitract tax §ia%i3i'£§; 1,:/S §3{1§(vii} mmains umcmc1'1ed and i_£3f18ﬂ€Ci€:(§ by the expia1:a§i:3;1 to Sec. 9(2).

When the p'd1'p{31'f; of the expia%11§;tio1f;.' ii)' is: '4 plain in its :{11€aning, it ift1;?;;:*:«E:<3,er3,:~:;$~s;'{1"§:*"' :"a_:"1'r.i;_* i1"1zp€:*missiE3ie '€15; rei'e:' '(.0 tiief-: "ise1eII1é1*an£iL11i1 A€3;§;§>§.::§xix:ii11g -. * the Fi:{_1a11Ce Bill 200'? Tjf1€I'£f3.'§€3}%€',-_i"{i-»§i$ <3.)'(1:sfé{:_i:Vi7I::E*c>I1"1 the reaciing of 3€iC,. 93{3.){vii}'{§:}' ta S€C.9(2} that the raiif;n:z «:Vi::3jd Court in respect sf "$1:.a:*t up S€';F'J'1C€L{$'-'3é%I'"1{iV ¢§.f§:;§i* «:$hi_E :i*%§$;§a§1Sibﬂ3ty" thxrz: part 0f {he t.a::c}"1:'1i;::a1 S'€':::*~;"ic€:s.'V-a§th<3'ti:Vg'11 mndemd partly of~»sho1'*€ but Hg-_h<'{:...é§X{;:c;1ti<}n <)i""€':'I'3_t:'w:::ri<; awn thaugh done by BEE anti L--_.}§';*..';'_;.1V,' *i"1:C5%=;§1c?:?é;:_ fiifﬁ seams is C£;i1"1'i€{1 out undér tiae ﬁimzrt, of }>3EGi',.. The 35:: and E301, althcugh hoid inéegﬁﬁiléiemt ::@2'1'rra4::i with Jinéal, as per {ha "semis Q? ' fi.%3:2...siQI1t;{*act 13:16:; EXECIEES the Wmk wide: dir€<:'t £31330} * ~.--é1'i('.i $23p€:'vi$§_9:1 Qf EBZOEJ. Eﬁerzca, BEE and E81 %i"iI*t.1:a3;§jg:"

<::G1'z:;iit'.L1£;& ¥:fE1€: ex€:::ui;ive agarzts sf RECBL, in that view, 23 the REOL unéer the contract, takes the CV81-'._ all :'Z'€Sp{}I'1Sibi}i'[.}-" for the successful erec'{.i01'1 and oj;?éé1"a§;iQ7:1 of the piant.

The ccntract. has three asp'€f:ts«:. ,ﬁi~st._ :a:s;-;¥€C'§ég deals with the '€.e»ch_ni{:al serVic7t':$. ~T.1"1e i*¢_11ci$ré1ig' 'af"~ technical services basicéiihf invt:e33_%e3 (ﬁve:/9" 2&3 cancepttzalization of .t1:<.-_:j pi3fﬁ§;;' -:t§1€' '"E&<:hniéé§'E0gisticS ami designs r:-:t<:., vvhi.::h-1i_s L',i:i<:%1*€:_--~«.i;ﬁ .'j=§";$_. nature :3? a 1:.he::GretiCa1 f(;:f:1'itﬁ é.ti01'2L_ sf fﬁe ';3:i3jéGt_.___3§1 this regarzi the s'uIt>sid §arié3:s §}ié';V.E;§£{f:f E:T.:C.l~E -have no F{3§€ is péafg. 'Fh€§1'* 3015 is es:3<i*:1_£.i;r3:';1j;t7if1§:5: A €:¥i4?;fC:?Vj;'{.O1':§:' yam of the ::::::r2, "acéi, '"i'h€ .. _ ren<£§§:*§:':g 01' *t1Y'2:-2*£;:;f"et§;<:ai aspects (sf téchmicai $e§Vi<::es {:fo s;::Eg§ W; ':i{§:;::r.{: wheiiy aﬁshers: zmd euisiiiﬁ Emiia. T'§r::éi"-£:'§'§:'e§:,7.:3?1é:;=first aggysagi: of the cgntrac: £312., technécai Q sa§'Vi{:-€:;:5§".c::>i11{§ be cmntra distinguishad {mm 131$ "Star:

$s§:,=:"vic=3:a and {war 3%} respaizsibéiity." in regpect 9? am, it mar; be 333:6 {ha}; the Rﬁﬁi, i3 eigizalijsz u iziviﬁvﬁd rim sxagutary par": ef {he {:(:11i1'a{:t, "'§'_hsrefa3:*€, E316 {Wm CI'i'{,€§'iO1'i {sf mzldermg ef Services in Egmziia and 1 <jC/ utiiisation 9:" services in Erxdia 'hecemes ﬁviéﬁiiilf; zioticaable in respeiti: of "start; up services and 9333;' ail res§}«:3I1SibiEi1:y." H(}W€V6I', in 1'espe<:¥: af "teCh;i1ic'a1 S€iI"V'E.(Za'3,S" thf: r€:1d€:*i11g of Services being purséig" .7 * and autside India, the m:I:1113;:--:rai.i-.5111 fgrarzaié-€I;31'V"§i_ja_ici'v_V V' tawardg t€:(:h:1i{:ai services does mat ég:ﬁract'*2;;§>§ ,1iab:'.}i{j:;' v H'ow€w:r, the split up re:11u11':2;fé£io:1 ﬁkaid -¥;(;1;'»;faVi°--:i7s*"*'s'1;a:'t "

up services ami Gveraiix respd:1$}33i1ity", :E"ie'"Ji2::da1 bat':

duty in law" to eifecé "E'§.i}i'-.?;§'.: 'f"h<?§ (10 so makes JirzdaiKvi{:.§2z'ic:5i:s3§.§;V_ iiab1.§§ gfaajs the tax on £336: azxiounts paiai inc: :Ev':.Ei:£,j}.i.; !;é31r»*é:%;:V'i:fE:~;"""5;sj.'t',5.?:r'£. up S€:':I'Vi{Z€S and aver aii :*espg§§1'is;ﬁ;2i§§t§;A._Ei{:iz:e2i::1', 'fflﬁi émdal xmuld 11:)': incur 3:13? Eiabiiitjgg-"A is . tax Es:":w2:~2r@S the aznazmt paiii Er"; resspect.

"{>3'"AV"%;::3c§§:§§_{:a'iﬁééwsices." The Jimlai would ha emitleci 'K2: :*e1'"'1iis_§i in res§<:<.:i of paymant maria to REQL f .. téiv-afrds' "t.&c%":1'1ical gerxzices' "

' N 'Fh.{:: Jinciai has :10: pmﬁuced {Em 9'L1s§<m:; {§u%,§; W<10<:%.2:11<:r:t.$ to Sfzfsw that the ailmums paid ":6 §E{}L ii":

3:§:$pe<:t <3? "i.e:<:hn§_cal semézzss, s*§ia1*i.::§ serxzicass ant} assay ail :'e$p{>:1s§biii'i,};" f£3m1.s part if 'ihﬁ cast price of the equi.pI11e11t.. 'I"heref<::re, the ETA'? has rightly held.-$13:

Jinda} is mat emitied to benefit uzlder A1't;i<:k: D'I"AA. Accordingly, 1:316 appeals are the tenns itlciicated above.

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Karnataka High Court

Jindal Thermal Power Company Limited vs Dy Commissioner Of Income Tax (Tds) ... on 16 March, 2009

Bench: K.Sreedhar Rao, C.R.Kumaraswamy