I-T dept approaches High Court on tax relief to SNC Lavalin

New Delhi, Oct 9 (PTI) The Income Tax department Friday
approached the Delhi High Court seeking stay over a sectoral
tribunal's order granting tax relief to canada-based
engineering firm SNC Lavalin on the money earned from
providing technical services.

In its petition, the I-T department said the tax relief
to SNC Lavalin by the Income Tax Appellate Tribunal by staying
the department's direction was "contrary to law".

The I-T department had directed the Canadian firm to pay
20 per cent tax on the revenue generated from providing
technical services.

A division bench headed by Justice A K Sikri and Justice
Siddharth Mridul has admitted the petition and directed it to
list for hearing.

The department submitted that as per Section 115 A of the
I-T Act, any foreign company would have to pay 20 per cent tax
on the money earned from giving technical services.

SNC Lavalin made Rs 6.2 crore in 2002-03 from providing
technical design to National Highway Authority of India for
widening its stretches but exempted itself from paying taxes
on the ground that it had provided only technical support and
not the complete product.

It added that its services were also covered under Indo-
Canadian DTAA and as per the treaty, the department could not
charge more than 15 per cent tax.

Later, SNC Lavalin challenged IT department's direction
before ITAT, which stayed the order. PTI