{"id":230,"date":"2010-02-26T13:10:11","date_gmt":"2010-02-26T13:10:11","guid":{"rendered":"http:\/\/www.itatonline.org\/blog\/?p=230"},"modified":"2010-02-26T19:18:58","modified_gmt":"2010-02-26T19:18:58","slug":"finance-bill-2010-ishikawajima-superseded-finally","status":"publish","type":"post","link":"https:\/\/itatonline.org\/blog\/finance-bill-2010-ishikawajima-superseded-finally\/","title":{"rendered":"Finance Bill 2010: Ishikawajima superseded .. finally!"},"content":{"rendered":"

In Ishikawajima-Harima Heavy Industries<\/a><\/strong> 288 ITR 408 the Supreme Court held {on a misreading of s. 9 (1) (vii)} that in order to be chargeable to tax in the hands of the non-resident, fees for technical services had to be rendered in India as well as utilized in India. It held that if both conditions were not fulfilled, the fees for technical services was not chargeable to tax in India.\n<\/p>\n

That the judgement was wrong was said so by the AAR in Worley Parsons Services Pty. Ltd<\/a><\/strong> (AAR) 312 ITR 273. It observed that Ishikawajima <\/strong>had wrongly referred to s. 9(1) (vii) (c) instead of s. 9 (1) (vii) (b) even though the two dealt with different situations. It also noted that the Supreme Court had stated that s. 9 (1)(vii) (c) requires that the services have to be rendered as well as utilized in India in order to be taxable in India even though the word \u201crendered\u201d was not to be found even in the inapplicable clause (c). It also noted that the law was that \u201ca decision not expressed and accompanied by reasons and not proceeded on a conscious consideration of issue cannot be deemed to be a law having binding effect as is contemplated under Art.141 of the Constitution. That which has escaped in the judgment is not the ratio decidendi<\/em>\u201d though it finally found a way to “distinguish” Ishikawajima<\/strong>.\n<\/p>\n

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