M/S. SMS SCHLOEMANN SIEMAG AG, W. GERMANY V. THE COMMISSIONER OF INCOME TAX, VIZAG.

RC/269/1996

AI Insights

The case involved SMS Schloemann Siemag AG, West Germany, as the petitioner, and the Commissioner of Income Tax, Visakhapatnam, as the respondent. The core legal issues pertained to the taxability of fees received by the petitioner for training and technical services provided to the Visakhapatnam Steel Plant (Rashtriya Ispat Nigam Ltd) under various agreements. The Income Tax Appellate Tribunal, Hyderabad, had referred the case to the High Court under Section 256(1) of the Indian Income Tax Act, 1961, seeking clarification on whether these fees were chargeable to income tax in India. The High Court's decision to dismiss the case as withdrawn effectively ended the legal proceedings without a substantive ruling on the taxability issues presented.

• Counselvise Citation: [2021] 140 COUNSELVISE.COM (IT) 753484 (HC-TELANGANA)
• Appeal Type: Others
• Pronouncement Date: 08-04-2021
• Assessment Year: misc
• Laws Referred To: Indian Income Tax Act, 1961
• Result in Favour of: Others
• Court: HIGH COURT
• Department Lawyers: K REDDY
• Assessee Lawyers: A V A KARTIKEYA
• Keywords: Design and engineering services; Income Tax; Technical Services; Training Fees
• Section: 256(1); 1(1)(vii)

Judgement Text

"IN IHE H,GH COURI FOR 7Htr Ir -. ^ - ^ r.SfrHxgllrE oF rErA N cA NA THURSDAY,IH rwo i,o GLEr.r E,f frJi ?AI|I A[8,. rHE HoNouRABLE sRr rtAii\".Jil.r.RAMA.HANDRA RAo rHE HoNouRo\".. r#Ir?rcE r.vrNoD KUMAR Between: IV/S SMS SCHLOEMANN SIEMAG AG, WEST GERMANY. ..,PETITIONER The Commissioner Of lncome,.Tax, Vissakhapatnam. ...RESPONDENT Case referred to the High Court by the lncome _ Tax Appellate Tribunat, Under Section 256 (1) of the rndian rncome Tax Act, 196,1 in R.A. Nos. 761 ro 767 r Hyd/1995 ( in tTA Nos. 1256, 1252,1260,1261 ,1262 & 1704 lHyd/ 1989 and 1626 /Hyd/1990 respectivery dated 14-08-1996 Assessment years 1985-86, 1986-87, 1984-85 ,1 987-88, 1 9BB-89 respectivery on its fire for decision on the foilowing question of law. ., REFERREDCASENO :2690F 1996 RA Nos 761 and 762 I Hvd/'1995 : 1. \"whether on the facts and in the circumstances of the case the Hon,bre lncome Tax Appellate Tribunal, Hyderabad, is correct in law in holding that the fees received by the assessee for imparting training outside lndia to the employees of Visakhapatnam Steel Plant (Rashtriya lspat Nigam Ltd) under the agreement for the Light and Medium lVlerchant Mill were chargeable to lncome{ax in lndia?\" \" Whether, on the facts and in the circumstances of the case, the lncome -tax Appellate Tribunal was right in holding that the consideratlon received by the assessee for drawing and design and also engineering services under the Wire Rod Ivlill Agreement and the Light and Medium Merchant lt/ill Agreement is fees for technical services within the meanlng of Explanation 2 to Sec. I ( 1) ( vii) of the lncome - tax Act, 1961, and chargeable to Income-tax in lndia\". Arising out of in ITA Nos. 1256, 1257, 1260, 1261 , 1262 & 1704 / Hyd/ 1989 and 1626 /Hyd/1990 dated 24-07-1955 Assessment Years 1985-86, 1986-87, 1984-85 ,1987-88, 1988-89 on the file of the lncome Tax Appellate Tribunal , Hyderabad Bench ,,A\", Hyderabad preferred against the order of the Assistant commissioner A- ward , Vizag dated 27-05-1988 in G.l.R. F.C. No.9/ 85-86, preferred against the RA Nos. 763 to 767 i Hvd/1995: order of the lncome Tax officer' A - Ward ' Vizag' dated 18-2'1988 in GtR I PAN No' F.c. s / 85-86. The reference coming on for hearing upon perusing the letter of reference of the lncome Tax Appellate Tribunal Bench'A'' Hyderabad dated 29-1 1-1996 and the records in the case and upon hearing the arguments of Sri A'V A Siva Kartikeya' Advocate for the Petitioner and Sri K' Rali Reddy' SC for l'T for Respondent The Court made the following: ORDER I THE HONOURABLE SRI JUSTICE M.S.RAMACHANDRA RAO AND THE HONOURABLE SRI JUSTICE T. VINOD KUMAR R.C. No 269 of 1996 ORDER: (Per Hon,ble Sri Justice M.S. Ramachandra Rao) Leamed counsel for petitioner fired a retter dt.2g-03_2021 before the Registrar (Judicial), High Court of Telangana, Hyderabad seeking to withdraw this R.C. at the instructions his client. Recording the same, this R.C. is dismissed as withdrawn. No costs. As a sequel, miscelianeous petitions pending, if arry, shall stand closed. Sd/- M. SHANTI VARDHINI JOINT REGISTRAR //TRUE GOPY// SECTION OFFICER //TRUE COPY' To sEcTtoN oFFtcER 1. The lncome Tax Appellate Tribunal, Hyderabad Bench 'A', Hyderabad. 2. The Commissioner of Income tax, Visakhapatnam. 3. The Asst. Commissioner A - Ward. Vizag. 4. The lncome Tax Officer, A- Ward, Vizag. 5. One CC to Sri A. V. A. SIVA KARTIKEYA Advocate [OPUC] 6. One CC to Sri K. RAJI REDDY, Advocate [OPUC] 7. Two CD Copies I XNl* HIGH COURT MSRJ & TVKJ DATED:0810412021 ORDER RC.No.269 of 1996 DISMISSING THE R.C. AS WITHDRAWN WITHOUT COSTS E 15 iss2021 * ) 1 4 E STAI{: :l o J A-i $ Da: 6) .}. a- C ae) "