Case Law Details
RELEVANT EXTRACTS:
6. We have gone through the contracts entered into between the assessee and its clients. As per the contract with TCS, Focus would provide technical assistance of choice personnel to work on the computer software development, implementation and maintenance of specific project to be allocated by TCS. Focus is paid for the services on a fixed man month fee basis. They would work under the overall guidance and supervision of TCS. They would work under the overall guidance and supervision of TCS. Focus is paid for the services on a fixed man month fee basis. They would work under the overall guidance and supervision of TCS. They would perform activities known as “software Development and Maintenance” . As per the contract with Infosys, Focus is a `Consultant’ who would provide `Services’ to Infosys. Services meant software development, modification or other tax including deliverables. Deliverables meant objects deliverable, source deliverable, works materials, software, documentation etc. conceived, developed and delivered in connection with the services. The personnel lent to Infosys would carry out task orders. Task orders were statements of work and would also indicate the charges for the services. As per the contract with Infosys, focus would be paid for services as indicated in the task orders. The payment is based on person day rate mutually agreed. From the invoices available on record we find that the infotech companies were charged for professional charges towards programming support rendered by different personnel on the establishment of the appellants on manmonth basis (TCS) or manday (Infosys) basis. Revenue has no case that during the material period, transactions between Focus and TCS/Infosys were on terms other than those in the contracts entered into in 2007. We find that the manpower kept at the disposal of both Infosys and TCS engaged in software development and maintenance which can be correctly described as engineering consultancy in the discipline of computer software engineering. It is seen from the invoices raised by Focus that they charged TCS/Infosys for programming support which is technical assistance in software engineering. There is no dispute that technical assistance in computer software engineering rendered by Focus was not taxable during the material period as per section 65(105)(g) of the Act. That the IT majors were charged for the resources lent by focus on manmonth basis or manday basis would not, prima facie, alter the character of the service rendered by the appellant. We find that the clients supervising resources of Focus at work for them similarly did not matter. In the circumstances we find that the appellants have made out a prima facie case against the demand of tax, interest and penalties adjudged in the impugned order. We order waiver of pre-deposit and stay of recovery of the dues adjudged against the appellant pending decision in the appeal.
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