Director Of Income Tax (International Taxation) Chennai … Appellant v. M/S.veolia Eau-Compagnie Generale Des Eaux

DATED: 24.09.2020 CORAM THE HON'BLE DR.JUSTICE VINEET KOTHARIANDTHE HON'BLE MR.JUSTICE KRISHNAN RAMASAMY T.C.A.No.628 of 2011 Director of Income Tax(International Taxation)Chennai …Appellant/ RespondentVs. M/s.Veolia Eau-CompagnieGenerale Des EauxC/o MIs. CNGSM & AssociatesAgastiyar ManorNew NO.20, Raja Street,T. Nagar, Chennai - 600 017.…Respondent/ Appellant Tax Case Appeal under Section 260A of the Income Tax Act,1961 against the order Income Tax Appellate Tribunal, Chennai‘C’ Bench dated 23.06.2011 in ITA No.2131/Mds/2010 against theorder of the Additional Director of Income Tax(InternationalTaxation)Chennai34,dated29.10.2010madeinPAN.NO.AABCC4612Q/23-C and against the order of the Income TaxOfficer(HQ) & Secretary Dispute Resolution Panel,chennai dated14.09.2010 made in F.No.DRP/chennai/Sectt/011/2010-11 for theAssessment Year 2004-2005. For Appellant : Mr.Karthik Ranganathan, Standing Counsel For Respondent : Mr.M.Bhaskar (Judgment of the Court was delivered by Dr.Vineet Kothari,J.)This Tax Case Appeal has been filed by the Revenue, callingin question the correctness of the order passed by the IncomeTax Appellate Tribunal, Chennai ‘C’ Bench dated 23.06.2011 inITA No.2131/Mds/2010, by raising the following substantialquestions of law: https://hcservices.ecourts.gov.in/hcservices/ i) Whether on the facts and in the circumstances ofthe case, the Income Tax Appellate Tribunal wasright in holding that the service tax collected bythe assessee company from the Chennai MetropolitanWater Supply and Sewerage Board could not be treatedas part of its receipts from fees for technicalservices, ignoring the decision of the Supreme Courtin the case of Chowringhee Sales Bureau P Ltd., -Vs.CIT [87 ITR 542]? ii) Whether on the facts and in the circumstances ofthe case, the Income Tax Appellate Tribunal wasright in holding that the reimbursements claimed bythe Assessee from Chennai Metropolitan Water Supplyand Sewerage Board could not be treated as itsincome by way of overlooking the provisions of theagreement and the facts that the expenses wereincurred by the assessee by itself while dischargingits contractual services? 3. Whether on the facts and in circumstances of thecase, the Income Tax Appellate Tribunal was right inholding that the assessee was entitled u/s. 10[6A]for an amount of Rs.1,55,80,850/- by importing thedefinition of "Infrastructure Facility" from section80IA[4] and without appreciating that in any case,for the purpose of Section 10[6A] the benefits to beallowed only to the creator of an infrastructure andnot to a consultancy firm like the assessee and notwhich was only assisting the process of creation ofinfrastructure? 4. Whether on the facts and in the circumstances ofthe case, in the Income Tax Appellate Tribunal wasright in holding that the fees for technicalservices received by the assessee could be taxedonly at the rate of 15% and not at the rate of 20%by wrongly relying on Article 12 of the DTAA withFrance which actually dealt with interest income?" 2. When the matter is taken up for hearing, learned StandingCounsel brought to our notice the Circular instruction issued bythe Central Board of Direct Taxes vide Circular No.17/2019 dated8th August 2019, wherein, it is stipulated that appeals shallnot be filed/pursued by the Department before the High Court incases where the tax effect does not exceed Rs.1,00,00,000/-(Rupees One Crore). 3. In the instant case, the tax effect is said to be lessthan the monetary limit imposed and therefore, the Appeal filedby the Revenue is dismissed as withdrawn, keeping open thesubstantial questions of law for determination in appropriatecases. No costs. 2. When the matter is taken up for hearing, learned StandingCounsel brought to our notice the Circular instruction issued bythe Central Board of Direct Taxes vide Circular No.17/2019 dated8th August 2019, wherein, it is stipulated that appeals shallnot be filed/pursued by the Department before the High Court incases where the tax effect does not exceed Rs.1,00,00,000/-(Rupees One Crore). 3. In the instant case, the tax effect is said to be lessthan the monetary limit imposed and therefore, the Appeal filedby the Revenue is dismissed as withdrawn, keeping open thesubstantial questions of law for determination in appropriatecases. No costs. Sd/- Assistant Registrar(CS) //True Copy// Sub Assistant RegistrarKSTTo1.Income Tax Appellate Tribunal, Chennai ‘C’ Bench,Chennai.2.The Additional Director of Income Tax(International Taxation)Chennai 34.3. The Income Tax Officer(HQ) & Secretary Dispute ResolutionPanel,chennai.+1cc to Mr.N.Muthuraman , Advocate SR.No. 31441T.C.A.No.628 of 2011A.SK(19/10/2020)