TaxTMI 
TaxTMI 
2004 (11) TMI 293
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....al services and thereby holding the assessee to be in default for not deducting tax at source. The assessee is also aggrieved against charging of interest under s. 201(1A) of the IT Act, 1961 (the Act). 2. On verification of the annual TDS return in Form No. 24 along with the P&L a/c and its annexures, it was observed by the AO that an amount of Rs. 39,55,161 had been debited in the P&L a/c as "deputed staff salaries". The amount was stated to have been paid to Taj Palace Hotel and Taj Mahal Hotel as reimbursement towards the salaries of certain personnel of those hotels who were deputed in the hotel of the assessee to render certain services. Nine employees were deputed from Taj Palace Hotel and seventeen were deputed from Taj Mahal Hot....
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....rest under s. 201(1A) for the above non-deduction of tax. Almost the same contentions were made by the assessee before the CIT(A) but the same did not find favour with him and accordingly he upheld the order of the AO passed under ss. 201 and 201(1A) of the Act. 3. The learned counsel for the assessee took us through the various clauses of the hotel operation agreement (agreement, for short) entered into between the assessee and Indian Hotels Co. Ltd. (IHC, for short). It was shown that the agreement was in force since August, 1990, in respect of the Ambassador Hotel atDelhi. Never before, such a dispute had been raised by the Department. The learned counsel then took us through the other clauses, particularly to ss. 1 and 2 in art. VII ....
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....y if the deductee had not paid the tax on the income received by him. In the instant case, the payee was, of course, IHC who had shown it as income in its accounts. But that would have netted out as IHC had paid the salaries to the deputed employees from which tax was deducted. Thus, ultimately the tax on the payment made by the assessee was paid to the Government treasury and hence, there was no question of paying the tax for the second time on the same income. For these contentions, the learned counsel relied on the decisions in CIT vs. Rishikesh Apartments Co-operative Housing Society Ltd. (2001) 171 CTR (Guj) 288 : (2002) 253 ITR 310 (Guj), Associated Cement Co. Ltd. vs. ITO (2000) 68 TTJ (Bom) 220 : (2000) 74 ITD 369 (Bom) and Asstt. C....
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..... 44AA are the profession of Authorised Representative, film artist (actor, lyricist, story writer, screenplay writer, dialogue writer and dress designer), company secretary and information technology. "Fees for technical services" have been defined to have the same meaning as in Expln. 2 to cl. (vii) of sub-s. (1) of s. 9. As per the said Explanation, "fees for technical services" means any consideration (including any lump sum consideration) for the rendering of any managerial, technical or consultancy services (including the provision of services of technical or other personnel) but does not include consideration for any construction, assembly, mining or like project undertaken by the recipient or consideration which would be income of t....
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....cified in the agreement are distinct and separate from the fees and they are to be reimbursed to IHC over and above the fees that become payable to IHC. We may further clarify that the expenses which the IHC may incur for the assessee are separately chargeable and not embedded in the fees to be paid. If the expenses were not separately chargeable, but were embedded in the fees and if they were not capable of being segregated, then perhaps, tax would have to be deducted from the entire amount. In that case, it would be a composite amount consisting of fees for services rendered and expenses incurred, incapable of being separated. 7. So far as fees for technical services are concerned, there is another aspect to it also. The meaning assign....