2013 (11) TMI 419

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....tax is not apart of 'Fees for Technical Services' as defined in section 9(1)(vii) of the Income tax Act, 1961 and directing the Assessing Officer to delete the income tax levied thereon." 2. The facts are that the assessee company is a non-resident company incorporated under the laws of Denmark. It is engaged in supplying licence, know-how and engineering and also rendering procurement services to various fertilizers and petrochemical industries in India. The assessee company has declared income from Royalties and fees for technical services taxable @ 20% as applicable to these incomes under section 115A of the Income tax Act r.w. Article 13 of AADT between India and Denmark. The assessee company claimed that the amount of service tax coll....

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.... charged on the service tax collected and paid to the Government and, accordingly, ld CIT(A) directed the AO to delete the income tax levied on the service tax collected by the assessee for both the assessment years under consideration. Hence, department is in further appeals before the Tribunal. 4. At the time of hearing, ld Departmental Representative supported the action of Assessing Officer and also submitted that as per judgment of Hon'ble apex Court in the case of Chowringhee Sales Bureau Pvt Ltd(supra), sales tax is held to be a part of trading receipt. He submitted that service tax is similar in nature to sales tax and, therefore, Assessing Officer is justified to include the service tax collected by the assessee as a part of gross....

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....ie vs ADIT (Income Tax Act No.2131/Mds/2010) vide order dated 23.6.2011, wherein, it was held that service tax received by the assessee is in the nature of reimbursement, which is paid to the Government and it cannot be considered as part of trading receipt and hence, cannot form part of total income of the assessee. He submitted that the orders of ld CIT(A) be confirmed. 6. We have carefully considered the orders of authorities below and submissions of representatives of both the parties. We have also gone through the decision of Coordinate Bench of this Tribunal in the case of Veolia Ea-Compagnie(supra). We observe that in the said case, similar issue arose i.e. as to whether the service tax charged and collected by the assessee, which i....