TaxTMI 
TaxTMI 
TaxTMI 
2015 (5) TMI 607
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....AO erred in holding that assessee has a service Permanent Establishment ("PE") in India within the meaning of Article 5 of India UK Double Taxation Avoidance Agreement ("DTAA"). 3. The Ld. DRP and Ld. AO erred in holding that the assessee has a service PE in India under Article 5(2)(k) of the DTAA without appreciating that: - Technology Transfer Agreement ("TTA") dated March 5, 2004 read with Intellectual Property Agreement ("IPA") dated December 17, 2007 and International Personnel Assignment Agreement ("IPAA") dated December 5, 2005 are independent contracts for materially different purposes. - IPAA between JCB Excavators ("JCBE") and JCB India Limited ("JCB India") provides for employees sent by JCBE to JCB India on deputation (secondment) which is admittedly as per specific requirements of JCB India and not for services in relation to TTA or IPA. - Seconded employees sent as per arrangement under IPAA are employees of JCB India. 4. Without prejudice to Ground No.3, under the facts and circumstances of the case and under law, the Ld. DRP and Ld. AO has grossly erred in holding that Royalty earned by the assessee is effectively connected to alleged service PE of the assessee....
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....o each other. That the appellant reserves its right to add, alter, amend or withdraw any ground of appeal either before or at the time of hearing of this appeal." 2. During the course of hearing, ground No. 7 was not pressed by stating that it is general in nature and Ground No. 9 is pre-maturely raised so these ground do not require any adjudication on our part. 3. Vide Ground Nos. 1 to 3 the issue agitated by the assessee is as to whether the assessee has Permanent Establishment (PE) in India or not. As regards to this issue the ld. Counsel for the assessee was fair enough to concede that this issue is decided against the assessee vide order dated 04.07.2014 in ITA No. 80/Del/2013 for the assessment year 2008-09 in assessee's own case. The ld. DR in her rival submissions stated that this issue has already been adjudicated against the assessee in the preceding year. 4. After considering the submissions of both the parties, it is noticed that this issue has been decided against the assessee in the preceding year vide aforesaid referred to order dated 04.07.2014 wherein relevant findings have been given in para 4 which read as under: "4. We have heard the rival submissions and ....
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....othing to doubt that there was service PE of the assessee as per Article 5(2)(k) of the DTAA covered within the ambit of 'other personnel'. Since this position has been candidly accepted by the ld. AR as well, we, therefore, refrain from any independent evaluation of this aspect. The ld. AR accentuated that his objections against the holding of the service PE of the assessee in India were practically the same which were taken for the earlier years. The tribunal has discussed and jettisoned such objections in its order for the A.Y. 2006-07. Under such circumstances and following the precedent, we hold that all the requisite conditions for attracting the mandate of Article 5(2)(k) are satisfied inasmuch as (i) there is furnishing of services including managerial services; (ii) such services are other than those taxable under Article 13 (royalties and fees for technical services); (iii) such services are rendered out of India; (iv) such services are rendered by 'other personnel'; and (v) such activities continued for a period of more than 90 days within 12 months' period. It is thus held that the service PE of the assessee is established in India. These grounds are, therefore, not all....
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....nd hence chargeable to tax as per para 2 of Article 13 of the DTAA. However, as regards the fees for technical services resulting from the rendering of services by the employees of the second category, the Tribunal has held that the same did not fall in para 6 of Article 13 and was, hence, chargeable to tax as per para 2 of the Article 13 of the DTAA. As regards the consideration for the employees of the first category, the Tribunal has held that the fees for technical services in relation to such employees was covered within para 6 of Article 13 of the DTAA. That is how, the Tribunal concluded that the consideration for rendering of services by the employees of first category was chargeable to tax under Article 7 of the DTAA. The AO was directed to determine the amount of income in terms of Article 7. As the facts for the instant year are admittedly similar to those of the preceding years on this issue, respectfully following the precedent for A.Y. 2006-07, we set aside the impugned order and send the matter back to the file of AO for determining income in consonance with the directions given for the earlier year." 9. So, respectfully following the aforesaid referred to order the....