2016 (3) TMI 811

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....cal Consultancy Services". Appellant herein had engaged services of foreign architect for designing and planning of various commercial building and paid an amount to such foreign architect as consultancy charges. Revenue is of the view that as per provision of Section 66(A) of the Finance Act, 1994, appellant is required to discharge the Service Tax liability under 'Reverse Charge Mechanism' on the amount paid. Both the lower authorities did not agree with the contention raised by the appellant and held that the appellant having discharged the Income Tax liability on the amount so paid, Service Tax liability arises on the Income Tax amount deducted as TDS and paid to Government of India. 3. The learned Counsel took us through the f....

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....ns made by both sides and perused the records. 6. The issue that falls for consideration is whether the amount of Income Tax discharged by the appellant, on the amount paid by them to foreign architect needs to be taxed under 'Reverse Charge Mechanism' and Service Tax liability can be fastened on the appellant or otherwise. 7. Undisputedly, the appellant has entered into an arrangement/agreement with foreign architect for receiving his services. The said agreement, also indicates an amount to be paid as consideration by the appellant to such architect; appellant has discharged the Service Tax liability on such an amount paid to the architect. As per provision of Income Tax Act, the appellant is required to pay the Income Tax on su....

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.... (3), the value shall be determined in such manner as may be prescribed. Explanation. - For the purposes of this section,- (a) "consideration" includes any amount that is payable for the taxable services provided or to be provided; (b) "money" includes any currency, cheque, promissory note, letter of credit, draft, pay order, travellers cheque, money order, postal remittance and other similar instruments but does not include currency that is held for its numismatic value; (c) "gross amount charged" includes payment by cheque, credit card, deduction from account and any form of payment by issue of credit notes or debit notes and book adjustment." It can be seen from the above reproduced Section 67 it contemplates how the valuation o....