2015 (11) TMI 1292

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....thholding the tax due. 2. Brief facts of the case are that the assessee is a resident Indian Company in terms of section 6 of the Act and is in the business of developing, constructing, operating and maintaining the port in Gujarat. The assessee had entered into a contract for purchase of cranes from M/s ZPMC, China. These cranes were supposed to be manufactured in China itself and on completion, ought to be imported in India. The assessee engaged M/s Liftech Consultants Inc., a company registered in USA, USA tax resident for review of design of the cranes which were to be supplied by the Chinese concern M/s ZPMC. The assessee had allowed credit to both the parties during financial year 2006-07 relevant to A.Y. 2007-08 and financial year....

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....o review the pre-existing design and construction audit cranes and monitor that the cranes meet the pre-determined set standards, which were already agreed to between the assessee and ZPMC. Since the assessee did not possess requisite technical expertise to closely monitor the adherence of set standards by ZPMC during manufacturing of the cranes, the assessee appointed Liftech Consultants Inc., USA to carry out the said task so that it can ensure the adherence to the agreed standards even before the cranes are installed in India. The assessee submitted that the reports as given by Liftech Consultants Inc., USA suggests that it is purely to review the pre-existing design, therefore there is no development and transfer of any technical plan o....

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....P) Ltd. vs. Union of India, (2008) 304 ITR 201 (Bom), DDIT vs. Preroy A.G. (2010) 39 SOT 187 (Mum) and various other related judgments. 5. The ld. D.R., on the other hand, has strongly supported the orders of authorities below. 6. After considering the rival contentions and submissions, and going through the agreement for engineering services for procurement and other aspects as appearing in the assessment order, we find that the service to be performed by M/s Liftech Consultant Inc., USA was more of a reviewing the design. The power of review is something more than the power of supervision. However, it is something less than the development and transfer of services and design. When we say that there is a power to review, essentially ....