Assessee not a PE in India under India-Singapore DTAA

The tribunal held that the assessee did not constitute a Permanent Establishment (PE) in India under Article 5(3) of the India-Singapore DTAA as none of the projects individually exceeded the 183-day threshold. Therefore, the revenue from the assessee's contracts was not taxable in India. The appeal of the assessee was allowed, and other issues such as incorrect TDS computation and interest levy were either resolved or deemed irrelevant based on existing precedents.

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Issues Involved:
1. Whether the assessee constituted a Service Permanent Establishment (PE) in India under Article 5(6) of the India-Singapore DTAA.
2. Applicability of Article 5(3) versus Article 5(6) of the India-Singapore DTAA.
3. Duration test for constituting Service PE under Article 5(3).
4. Aggregation of days for multiple projects to determine PE status.
5. Incorrect computation of revenue from BG Hydra Contract with Swiber.
6. Incorrect computation of TDS.
7. Levy of interest under section 234B.

Detailed Analysis:

1. Whether the assessee constituted a Service Permanent Establishment (PE) in India under Article 5(6) of the India-Singapore DTAA:
The assessee, a Singapore-based company, engaged in subsea installation services, was assessed by the AO who concluded that the assessee had a Service PE in India under Article 5(6) of the India-Singapore DTAA. The DRP upheld this view, noting that the stay of employees exceeded 90 days, thus constituting a Service PE.

2. Applicability of Article 5(3) versus Article 5(6) of the India-Singapore DTAA:
The primary contention was whether Article 5(3) or 5(6) applied. Article 5(3) pertains to construction, installation, or assembly projects, requiring a duration of more than 183 days to constitute a PE. Article 5(6) deals with furnishing services through employees for more than 90 days. The tribunal concluded that the assessee's activities fell under Article 5(3) as they were purely installation services, not general services, thus Article 5(6) was not applicable.

3. Duration test for constituting Service PE under Article 5(3):
The tribunal examined the duration of each project:
- Allseas Project: Employees stayed for 3 to 101 days, with a second trip ranging from 14 to 48 days, aggregating to less than 183 days.
- Swiber BG Gaslift Project: Duration varied from 7 to 93 days, below the 183-day threshold.
- Swiber BG Hydra Project: The AO incorrectly calculated the duration from the contract signing date. The correct duration, excluding the signing date, was below 183 days.

4. Aggregation of days for multiple projects to determine PE status:
The tribunal rejected the department's argument to aggregate days across different projects. Citing precedents, it held that each project must be viewed independently unless they form a coherent whole geographically and commercially. Each of the assessee's projects was standalone, and none individually met the 183-day threshold.

5. Incorrect computation of revenue from BG Hydra Contract with Swiber:
This issue became moot as the tribunal concluded that no PE was constituted under Article 5(3), making the revenue computation irrelevant.

6. Incorrect computation of TDS:
The AO had granted the credit, rendering this issue infructuous.

7. Levy of interest under section 234B:
The tribunal, following the jurisdictional High Court's decision in NGC (313 ITR 187), held that no interest under section 234B was leviable.

Conclusion:
The tribunal concluded that the assessee did not constitute a PE in India under Article 5(3) as none of the projects individually exceeded the 183-day threshold. Consequently, the revenue from the assessee's contracts was not taxable in India. The appeal of the assessee was allowed, and other grounds were rendered infructuous or covered by existing precedents.

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