AREVA T AND D INDIA LTD. (FORMERLY KNOWN AS ALSTOM LTD.) Vs. INCOME TAX OFFICER-II (INTERNATIONAL TAXATION)

JUDGEMENT

(1.) IN this appeal, the assessee questioned the correctness of the order of the Income Tax Appellate Tribunal dated May 15, 2007, made in I.T.A. No. 408/Mds/2004 in relation to the assessment year 2003 -04.

(2.) THE appellant is a limited company having its registered office at Calcutta and head office at Chennai and is engaged in the business of manufacturing switch gears and selling electrical equipments including high voltage and medium voltage switch gears, transformers, control panels, relays, electrical equipments involved in the development of power generation, transmission and distribution. The appellant's parent company is in France. The appellant is a holding company.

(3.) ON November 28, 2002, there was a survey conducted by the respondent in the premises of the appellant herein. On a perusal of the records unearthed, the Assessing Officer, the respondent herein, found that there was a short deduction on payments made to Equant in a sum of Rs. 8,93,186, for the period ending March 31, 2002, June 30, 2002, and December 31, 2002. By order dated April 30, 2003, under Section of the Act, the respondent charged simple interest at Rs. 1,54,075 for non -deduction of tax at source by the appellant -company and thus, a total sum of Rs. 10,54,985 was demanded by the respondent. Against that order, the assessee had filed an appeal before the Commissioner of Income Tax (Appeals). The Commissioner of Income Tax (Appeals) held that the payment made could not be considered to be a payment for "technical services", liable for deduction of tax at source. As against that order, the Revenue took up the matter on appeal before the Income Tax Appellate Tribunal. The Income Tax Appellate Tribunal, by the order impugned in this appeal, set aside the order of the Commissioner of Income Tax (Appeals) and confirmed the order passed by the Assessing Officer on the ground that the correctness of the order could not be canvassed now in the appeal.