TaxTMI 
TaxTMI 
2016 (6) TMI 522
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....partmental Representative (CIT-DR) on behalf of the Revenue. First we shall take up Revenue's appeal in ITA No.4028/Mum/2002 for A.Y. 1998-99: The grounds raised by the Revenue in its appeal are reproduced below: "1.On the facts and circumstances of the case and in law, the learned CIT(A) erred in holding that for the computation of period of stay, both the contracts should be considered separately and accordingly, the stay of the appellant for any of the aforesaid contracts during the assessment year is not nine months without appreciating the fact that the first and the second phase of the contract with M/s. Enron Oil & Gas was to be considered as one consolidated contract and that the aggregate duration of the period for executing the projects/ activities in India would constitute the P.E. in India. 2.On the facts and circumstances of the case and in law, the CIT(A) erred in holding that there is no P.E. in India in view of the Article 5 of the DTAA between India and Mauritius and that the actual technical operations and that preliminary commercial preparations and subsequent legal discussions were not to be included in the calculation of the duration period wi....
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....hment in India as defined in Article 5 of the Treaty. The company was engaged in the execution of installation contracts in India. However, the project work (activities) in India are performed/ to be performed and the respective contracts are for a duration of less than 9 months as detailed herein after. Contract (D-4522) with Enron Oil and Gas India which commenced on February 05,1997 was completed on May 19, 1997 as evidenced by completion certificate (Annexure B). In view of the aforesaid, income under all the contracts is not taxable in India as stipulated in Article 7 of the Treaty." 3.2. During the course of assessment proceedings, Ld. AO analysed the various contracts executed by the assessee company with M/s. Enron Oil and Gas India with different aspects and relying upon and following the assessment order for 1997-98, the work executed by the assessee at different locations was considered as one, and accordingly number of days for execution of all the projects were aggregated to determine the period of 9 months (inadvertently mentioned in the assessment order as 90 days). The AO also included the number of days estimated to have been spent for supervisory activ....
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....ded in favour of the assessee by the Tribunal. He therefore, requested that appeal of the revenue should be dismissed. In reply, Ld. DR fairly submitted that the issue involved in the appeal filed by the department was covered by the judgment of the Tribunal in assessee's own case for A.Y. 1997-98. 3.6. We have gone through the order of the lower authorities, the order of the Tribunal for A.Y. 1997-98 as well as submissions made by both the sides before us. It is noted by us that similar issue came up before the Tribunal in assessee's own case for A.Y. 1997-98 wherein the Tribunal decided this issue in favour of the assessee vide order dated 22.03.2010 in ITA No.8084/Mum/2004. 3.7. After discussing the law and facts of the case in detail in this regard, it was held by the Tribunal that for the purpose of computation of number days for examining threshold limit of 9 months, each of the building site or construction, or assembly project or supervisory activities in connection therewith is to be viewed independently on stand-alone basis and thus, no aggregation is required to be done for computing number of days. The relevant para of the ITAT's order is reproduced below: ....
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....ng site, assembly or installation project, or supervisory activities in connection therewith, each of site or project is an independent unit, and the approach to these types of PEs recognize this normal business practice. The unambiguous pr inciple, underlying this approach, seems to be to view these business activities at different locations on standalone basis. It is also interesting to note that in certain treaties entered into by India, there is a specific departure from this rule as evident from the wordings used in def inition clauses of corresponding PEs. Take for example, Article 5(2) (k) of India Austral ia tax treaty, which states that "The term 'permanent establishment' shall exclude especially .... a building site or construction, installation or assembly project, or supervisory activities in connection with such a site or project, where that site or project exists or those activi ties are carried on (whether separately or together wi th other sites, projects or activities) for more than six months." (emphasis supplied by us by underlining). In the case of India Thailand tax treaty, the definition for this type of permanent establishment, which finds place....
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....ITA No.2089/Mum/2011 for A.Y. 1997-98 upheld the order of the Ld. CIT(A), on facts also. Thus, the clear position emerging from the orders of the Tribunal in assessee's own case is that each project of the assessee has to be considered separately for computing number of days of the work duration. 3.10. Coming back to the facts of the year before us, it is noted that only one project was carried out during the year i.e. contract number D4522, the duration of which was for 3 months only. Thus, in view of legal position as has been decided by the Tribunal in assessee's own case as well as on the facts of the year before us, we find that the assessee had no PE in India in the year under consideration in terms of Article 5(2)(i) of the Act Indo-Mauritius treaty. Thus, we do not find any force in the ground raised by the Revenue and uphold the factual findings of Ld. CIT(A), respectfully following the order of the Tribunal for assessment year 1997-98. Thus, grounds raised by the Revenue are dismissed. 3.11. In the result appeal of the revenue is dismissed. Now we shall take up assessee's appeal in ITA No.4434/Mum/2002 for A.Y. 1998-99: The assessee has raised following ....
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....ice premises pertain to the project undertaken by the assessee at various sites. The survey team recorded the statement inter-alia of Mr. Arunabha Sen (Country Manager), Arun Tarkar (Areas logistic Manager), Mr. Lawrence Rodrigues (Accountant). On the basis of these statements and papers found during the course of survey in the form of invoices, correspondence, lease of employees etc., it was concluded by the AO that it was Liaison Office of the Company which was involved in the full-fledge business activities, and therefore it constituted PE of the assessee. 4.2. Being aggrieved, the assessee filed an appeal before the Ld. CIT(A), wherein after analyzing assessment order and submissions of the assessee it was held by Ld. CIT(A) that the said office was exclusively used for the projects undertaken by the assessee company. It was further held that Mauritius address was only on paper as the assessee company did not have functional office in Mauritius. Thus, Ld. CIT(A) upheld the findings of Ld. CIT(A) and confirmed his action by holding that assessee had a PE in India during the year, and also upheld the action of the AO in assessing the income of the assessee u/s 44BB of th....
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.... Khader Khan Son 300 ITR 157 (Mad) which was subsequently affirmed by the Hon'ble Supreme Court of India vide order dated 20th September 2012 reported in 210 taxman 248 (SC). 4.5. Per contra, Ld. DR also took us through various documents found during the course of survey and submitted that the assessee's case falls under Article 5(2)(c) of the treaty; he drew our attention upon various documents found during the course of survey to show that the assessee was carrying out substantive business operations from the said office premises. He relied upon the judgment of Hon'ble Karnataka High Court in the case of Jebon Corporation India Liaison Office vs. CIT 245 CTR 300. 4.6. In rejoinder, the assessee has distinguished the judgment of Jebon Corporation India Liaison Office (supra) on facts and submitted that the documents impounded during the course of survey do not prove at all carrying out of any substantive business, and at the most, said office can be said to be a place for supply of information and doing similar activities which have preparatory or auxiliary character for the enterprise. It has been further submitted by him before concluding his arguments that the admit....
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....llaneous documents which were exchanged by persons who were coordinating the activities carried out at the site. There was a list of messages which were received and passed on further which included fax messages or other radio messages. There is also a list of the employees who were working in the project office. According to the AO, it shows that this office was used for the appointment and recruitment of employees. 4.9. We have gone through the gist/ survey report prepared by the survey team with regard to the documents found during the course of survey. In our opinion, none of the documents shows that any substantive business was done from the said office. We have also analysed each and every document upon which our attention was drawn by the Ld. CIT-DR. It is noted that at page no.3 of the Departmental Paper Book (DPB), there is an item no.46 described as faxing of Daily Progress Report of DB-6. Similarly, there is item no. 51 described as an information regarding movement of persons from Mumbai to project site and vice-versa. We find that these documents were prepared for the purpose of facilitating work at project site. Similarly, at page no.6 of DPB, there are items....
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....ng back office support and coordination services. The immediate reference can be made to the reply given in response to question no. 36 by Mr. Arun Tarkar, wherein he expressly mentioned that coordination and liaisoning was done from this office. The question put to him and reply given by him are reproduced hereunder for the sake of ready reference: "Q.No.36. Do you agree with me that Mumbai office i.e. 412-413, Midas, Sahar Plaza Complex, belong to/are employee of J Ray Mc Dermott Middle East Inc. previously known as Mc Dermott ETPM, East, Inc. but the same is being used to for the projects of J Ray Mc Dermott Middle East (Indian Ocean) Ltd. Reply; Yes, the co-ordination and liasioning is being done through this office." (emphasis supplied) 4.12. We have gone through submissions of all other persons also. What we have been able to gather from the documents impounded during the course of survey and the information gathered 133(6) and 131 is that impugned premises were used as project office of the assessee company for providing requisite auxiliary services in the nature of back office support services. It is noted that despite carrying out an invasive action of survey, ....
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....front of f ice functions of MSCo in fixed income and equity research and in providing IT enabled services such as data processing support centre and technical services as also reconciliation of accounts. In order to decide whether a P.E. stood consti tuted, one has to under take what is cal led as a functional and factual analysis of each of the activities to be undertaken by an establishment. It is from that point of view, we are in agreement with the ruling of the AAR that in the present case Article 5(1) is not applicable as the said MSAS would be performing in India only back office operations. Therefore to the extent of the above back off ice functions the second part of Article 5(1) is not attracted." 4.14. Similar view has been expressed by the Hon'ble Delhi High Court in the case of U.A.E. EXCHANGE CENTRE LTD. vs UNION OF INDIA (supra), relevant portion of the judgment is reproduced below: "......the liability to tax under the DTAA between the UAE and India is governed by article 7. Paragraph (1) of article 7 of the DTAA provides that profits of an enterprise of a Contracting State shall be taxable only in that State, unless the enterprise carries on business, in the ....
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.... of mineral oil, and further admitted facts are that no other business activities have been carried out which could be called as independent business activities yielding separate/ independent business profits. Thus, the aforesaid activity of the construction project needs to be considered primarily under Article 5(2)(i), which read as under: "(i) a building site or construction or assembly project or supervisory activities in connection therewith, where such site, project or supervisory activity continues for a period of more than nine months......." 4.17. It has been already held in the own case of the assessee by the Tribunal in A.Y. 2007-08 and by the AO as well as Ld. CIT(A) in impugned year that case of the assessee has to be examined in article 5(2)(i). In earlier years also, wherever the duration of the project has exceeded a period of 9 months, the same has been treated as permanent establishment in India and its corresponding income has been offered to tax and accepted by the AO also. Thus, there is no doubt that the case of the assessee falls in article 5(2)(i). Now, the next question that arises here for our consideration is that whether the case of the assessee ca....
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....tract in question and thus it amounted to doing substantive business. Therefore, in the context of these facts Hon'ble High Court analysed provisions of Article 5 of Indo-UAE treaty to find out whether the PE of the said company would be determined as per Article 5(2)(h) of Indo UAE DTAA to determine an 'Installation PE' based upon the work duration of main activity of the assessee or the PE shall be determined on the basis of project office of the said company in terms of Article 5(2)(c). Hon'ble High Court held that its project office shall not determine 'PE' of the said company in India; relevant observations of the high court are reproduced below: "24. It is the Assessee's case that its office at Mumbai was opened only to comply with contractual requirements and the exchange control regulations and was used only as a communication channel and not for the execution of the Contracts. The Project Office was only used for the purposes of correspondence and as a communication channel; apart from that, the Project Office had no role to play in the execution of the activities under the Contracts and no other business of the Assessee was carried on through the Project Office. Th....
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....ness maintained solely for the purposes of carrying on activity of a preparatory or auxiliary character has been explained by Professor Dr. Klaus Vogel. In his commentary on "Double Taxation Conventions, Third Edition", he states that "It is recognised that such a place of business may well contribute to the productivity of the enterprise, but the services it performs are so remote from the actual realisation of profits that it is difficult to allocate any profit to the fixed place of business in question. Examples are fixed places of business solely for the purpose of advertising or for the supply of information or for scientific research or for the servicing of a patent or a know-how contract, if such activities have a preparatory or auxiliary character". 27. A Division Bench of this Court in UAE Exchange Centre Limited (supra) considered a case where a UAE based enterprise maintained a liaison office in India and the only activity of that office was to download information contained in the main servers located in UAE on the basis of which cheques were drawn on banks in India. The said cheques were couriered or dispatched tothe beneficiaries in India keeping in mind the instru....
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....hich are sold directly by the Israeli company. The Israeli company further sells to the distributors within the territory not being the assessee and that these distributors further resale the products to ultimate customers independently. 8.2. The Liaison office only provides certain servicing of the equipments to the distributors for which the expenses are reimbursed by the Israeli company. The Liaison office in India is merely in the nature to facilitate the contract between the distributors and the Israeli company. The distribution contract, per se at page _____ of the paper book, do not result into any generation of income and, therefore, the activities of the assessee have to be definitely considered to be proprietary and auxiliary in nature. The ld. AR has brought to our notice RBI approval, at page 10 of the paper book, which has been received by the assessee, for the purposes of undertaking liaison activities and to act as a communication channel between the parties in India and the Israeli company. 8.3. Moreover, the AO has relied upon the judgment of the authorities of advance ruling in the case of UAE Exchange Centre Limited reported in (2004) 268 ITR 9 AAR which....
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....o relates to a construction of a project. Article 5(6) whereas envisages that, if an enterprise is "furnishing services" in the contracting state through its employees for a period of 90 days or more, then it is deemed to have Service PE, except for the services referred to in para 4 and 5. The threshold period under this para is 90 days and more; or if such activities are performed for a related enterprise, then period of more than 30 days. The Article 5(6) explicitly provides that it applies to "services" other than those covered by Article 5(4) and 5(5), however, the said article is silent as regards its relationship with Article 5(3). Thus, Article 5(6) cover various services which are not covered by para 4 and 5 of Article 5 and technical services as defined in Article 12. What kind of services have been contemplated in para 6 of Article 5 have not been elaborated in the treaty or elsewhere. In contradistinction, para 3 of Article 5 is very specific and therefore, such specific activities cannot be read into para 6 of Article 5. There cannot be a overlapping of activities carried out within the ambit of Article 5(3) and furnishing of services as stated in Article 5(6). B....
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....authority in the asst. yr. 1994-95 have categorically given a finding of fact that the entire duration of the contract was from 27th Dec., 1993 till 26th June, 1994, i.e., less than six months. Article 5(3) of the treaty provided that in order to constitute a PE such site or project should continue for a period of more than six months. Such site or project, in our opinion, is provided under art. 5(2) of the treaty and, therefore, the site or project provided under art. 5(2) should continue for a period of more than six months in order to constitute a PE. Since a categorical finding of fact has been given by the appellate authority that the contract was for less than six months, it becomes absolutely clear that the assessee did not have a PE in India as per art. 5(3) of the treaty. The Court is of the opinion that art. 5(3) provides a specific provision which covers the provision of art. 5(2) of the treaty. The Court is of the opinion that the specific provision would prevail over the general provision. Consequently, the Court is of the opinion that no PE was constituted by the assessee in India during the assessment year in question." 4.24. In view of the facts of this case and ....
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....ith in any of the articles of the Treaty, then the provisions of Article 7 would apply for such a case. It was further noted by AO that since insurance claim receipts have not been dealt with in any of the Articles of the Treaty, therefore, article 7 will apply on such items of income. The AO also refused to grant benefit of any expenses on the ground that all the allowable expenses have been considered while determining the profits u/s 44BB of the Act. 6.2. Being aggrieved, the assessee filed appeal before the Ld. CIT(A). The Ld. CIT(A), assessee made detailed submissions reiterating its stand as was taken before AO. It was submitted that complete details were given to the AO. The said amount was received outside India and it was received on account of loss suffered by the assessee pertaining to Tapti Field located beyond 12 nautical miles from the coastal line. The amount was received under the insurance policy by way of reimbursement of cost incurred in the said project. After considering the submissions of the assessee Ld. CIT(A) held that the said amount was business income as per article 7 of the Treaty, and could be taxed only u/s 44BB. The insurance claim receipt w....
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....Treaty which deals with taxability of business profits. Article 7 clearly lays down that existence of PE in India is a mandatory condition for taxing business profits of residents of Mauritius in India. 6.6. We have also gone through the judgment of Hon'ble Uttarkhand High Court relied upon by the Ld. DR in the case of CIT Vs. M/s Halliburton Offshore Service Inc.(supra). In the said judgment, it has been held by the Hon'ble High Court that aggregate amount received by a non-resident assessee is chargeable to tax u/s 44BB @ of 10% without any deductions, like freight and transportation charges. Section 44BB taxes the income on deemed basis. It has nowhere been held in the said judgment that miscellaneous receipts shall be taxable u/s 44BB whether the assessee has PE or no PE in India. Thus, the said judgment is having altogether different facts and appears to have been misread by the Ld. DR and does not lay down any such issue as was canvassed by the Ld. DR before us. 6.7. Thus, in view of the aforesaid legal position, we hold that the said amount can be brought to tax only if the assessee has a PE in India for the concerned project. But the facts brought before us were....
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.... fact that the order was pending for disposal on the date of passing the order for the subject year. 2. The CIT(A) erred in upholding the contention of the AO that the liaison office of J. Ray McDermott Middle East Inc., a separate legal entity, constituted permanent establishment of the appellant and that any profit could have been attributed to the PE. 3. Without prejudice to the grounds 1 & 2, the learned CIT(A) ought to have held that no income could be attributed to that permanent establishment. Without prejudice to the above, the CIT(A) ought to have held that only the proportion of income attributable to that permanent establishment may be taxed in India. 4. The CIT(A) erred in upholding the action of the AO in taxing the miscellaneous and other income amounting to US$ 15,915." 8. Ground Nos. 1, 2 and 3: It is noted that Ld. CIT(A) has followed his own order for A.Y. 1998-99 while disposing these grounds, therefore, we direct the AO to follow our order for A.Y. 1998-99 and verify number of days of work duration and other requisite facts with regard to the project carried out by the assessee during the impugned financial year for determination of its PE in I....
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.... these grounds may be treated as partly allowed for statistical purposes. 11.1. The grounds with regard to levy of interest u/s 234D are consequential and dismissed. We shall now take up assessee's appeal in ITA No.2227/Mum/2009 (Penalty appeal) 12. This penalty appeal is identical to penalty appeal of A.Y. 2000-01 and accordingly, AO is directed to follow our order for A.Y. 2000-01 in ITA No.2226/Mum/09 Now, we shall take up assessee's appeal in ITA No.8720/Mum/2010 for A.Y. 2004-05 The assessee has raised following grounds: Ground No. 1: 1.1. On the facts and circumstances of the case and in law, the Deputy Director of Income-tax (International Taxation) - 3(1), Mumbai ('the DDIT') erred in issuance of notice under section 148 of the Income-tax Act, 1961 ('the Act') and completing the assessment at an income of Rs. 14,88,60,060. 1.2 The Appellant prays that the reassessment proceedings be held to be bad-in-law and therefore liable to be quashed. Ground No. 2 2.1. On the facts and circumstances of the case, the DDIT erred in holding that Rs. 5,16,72,024 under the contract D5073 and Rs. 1,32,01,471 under the contract D5094 is taxa....
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.... DDIT has erred in initiating penalty under section 271(1)(c) of the Act and in holding that the Appellant has concealed particulars of its income and has furnished inaccurate particulars of its income which led to penalty under the said section. The Appellant prays to direct the DDIT to drop the penalty proceeding under section 271(1)(c) of the Act. Ground No. 9 The Appellant craves leave to add to, alter, and / or amend all or any of the above Grounds of Appeal 13. Ground Nos. 2, 3, 4 & 5: It is noted that while deciding these issues in the assessment order, the AO has referred to and relied upon the assessment orders for A.Ys. 1998-99, 1999-00 & 2002-03. The DRP did not bring anything new while upholding the assessment order. 13.1. These grounds are identical to the grounds disposed by us in our order for A.Y. 1998-99, therefore, decisions and directions contended in our order for A.Y. 1998-99 shall apply mutatis mutandis on this year also, and the AO is directed to verify requisite facts and follow our order for A.Y. 1998-99, accordingly, these grounds may be treated as allowed in terms of our directions as contained in our order for A.Y. 1998-99. 14. Gr....
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....ny. Under such circumstances, there are serious doubts if at all if accrual of the income has taken place. The law in this regard is well settled law that mere making of a claim of income which does not give rise to any enforceable right does not result into any income. Though the position of law in this regard is clear, but in absence of complete facts before us we are not able to conclude this issue at this stage. We find that both of the lower authorities had dealt with this issue in highly surreptious and non-speaking manner. Under these circumstances, we find it appropriate to send this issue back to the file of the AO who shall take guidance from the observations given by us in this order as well as other judgments as may be placed by the assessee before the AO. The assessee shall also bring on record complete facts with regard to the subsequent developments that might have taken place with regard to realization of the amount of the invoices from the said party, for which AO shall grant adequate opportunity of hearing. The AO shall decide this issue afresh after taking into account all the facts and circumstances. The assessee is free to raise all legal and factual issues per....
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.... 3.1.On the facts and circumstances of the case, the Dispute Resolution Panel-1 erred in holding that the Appellant has a PE in India under Article 5(1) of the DTAA ignoring the provisions of Article 5(2) of the DTAA. 3.2. The Appellant prays that it be held that Article 5(1) is not applicable to the Appellant and without prejudice, the Appellant does not have a PE in India under Article 5(1) of the DTAA. Ground No. 4 4.1. On the facts and circumstances of the case and in law, the DDIT erred in holding that the Liaison Office (LO) of another group company J. Ray McDermott Middle East, Inc. (JRMMEI") constitutes PE of the Appellant and accordingly erred in including Rs. 13,89,21,358 as income of the Appellant. 4.2 The Appellant prays that it be held that LO of JRMMEI cannot constitute PE of the Appellant. Ground No. 5 5.1. Without prejudice to Ground No.4 above, on the facts and circumstances of the case, the DDIT erred in attributing the total contractual revenues from contracts D5094, D5094 & D5097 amounting to Rs. 13,89,21,358 as the profits attributable to the PE in India. 5.2 Without prejudice to Ground no.2 and 3 above, on the facts and circumstances of t....
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....assessee had carried out certain portion of the work under the contract outside India. The CIT (Appeals) has extracted the work at para 3.11 pages 7 to 10 of his order and the bifurcation of the work done outside India and the work done within country are not disputed. As pointed out by the learned CIT(Appeals), the only issue is whether, the receipts of work done outside India, even though it is connected with the major part of the contract, is taxable in India or not. 5. The preparation of designs in this case is done by Jebel Ali, Dubai and the documents were transmitted to EIL from outside the country. The distance from Jebel Ali to India is 1050 nautical miles and the travel within India is about 100 nautical miles, which means 10% of the total transportation is within the country. The assessee in this case followed the project completion method to recognize contract revenues. The revenues pertaining to work carried on within India and works carried on outside India has been determined based on actual activities carried out, and as already stated there is no dispute on this fact. 6. In such a situation, in our considered opinion the first appellate authority has rightly ....
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....ys meant to operate and remain effective on the statute book. Sec. 5 is the charging provision and no income can be brought to tax unless it falls within the scope of the said section and the use of the expression "subject to other provisions of the Act" in s. 5 would mean that if any other section operates to exclude from the total income of any person any income, which otherwise falls within the broad framework of his total income as laid down in s. 5 such section would prevail. To emphasis, the provisions of s. 44AB vis- à-vis the legislative intent only mean that thee replace the system of computation of income earlier envisaged by application of the provisions of ss. 28 to 41 and ss. 43 and 43A, but the provisions of s. 5, which is the charging section would remain intact and these by no maxim of interpretation would be superseded by the provisions of s. 44BB. As per Circular No. 495, dt. 22nd Sept., 1987, s. 44BB was no doubt described as a special provision for computing profits and gains in connection with the business of exploration of mineral oil but these were a measure of simplification providing for determination of income of such taxpayers at 10 per cent ....
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.... notification bearing No. GSR-304 (E), dt. 31st March, 1983 - Saipem SPA vs. Dy. CIT (2004) 86 TTJ (Del) (tm) 1 followed. 8. Similar are the decisions in the following cases: 1. ACIT vs. Jindal Drilling ITA No. 6452/Bom/91 2. DCIT vs. Sonat Offshore Drilling ITA No. 7414/Bom/94 (Approved by the Bombay High Court (Income Tax Appeal No. 508 of 2007) vide order dated 16th Sept., 2008. 3. Transocean Offshore Inc Vs. DCIT ITA No. 05/Del/2002 4. ACIT vs. Enron Global Exploration & Production Ltd. 5. R & B Falcon Drilling Co. vs. ACIT. 9. In view of the above discussion, we uphold the order..." 20.3. The revenue filed an appeal before the Hon'ble High Court wherein the appeal of the revenue was dismissed by the Hon'ble Bombay High Court vide order dated 18th March 2014 in ITA No. 1328/Mum/2011 by observing as under: "4. The department as also the assessee proceeded on the undisputed position that the assessee is a non-resident based in Mauritius. It has a permanent establishment in India. The income from the permanent establishment is assessable as business income. It is in such circumstances that we do not find that any substantial question of law with r....
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....) erred in holding that Rs. 18,87,60,455 under the contract D5680 taxable as income of the appellant by holding that the appellant has a Permanent Establishment in India under Article 5(2)(i) of the Double Tax Avoidance Agreement between India and Mauritius(DTAA). 1.2.On the facts and circumstances of the case, the DDIT erred in not appreciating that durations of each contracts D5680 did not exceed nine months in accordance with Article 5(2)(i) of the DTAA and erred in holding that the aggregate duration of all the contract would be considered for constituting PE in India. 1.3. The Appellant prays that it be held that the Appellant does not have a PE in India and therefore the income of Rs. 1,85,41,153 under the contract D5680 is not chargeable to tax in India. II Ground No.2 2.1 On facts and circumstances of the case, the Dispute Resolution Panel-1 ("DRP") erred in holding that the Appellant has a PE in India under Article 5(1) of the DTAA ignoring the provisions of Article 5(2) of the DTAA. 2.2 The Appellant prays that it be held that Article 5(1) is not applicable to the Appellant and without prejudice, the Appellant does not have a PE in India under Article....
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....grounds: "1. On the facts and in the circumstances of the case and in law, the Id. CIT(A) erred in directing the Assessing Officer to delete the amounts received for the contract work done outside India, ignoring the fact that the said contract amount is attributable to its PE in India. 2. The Appellant prays that the order of the Ld. CIT (Appeal) on the above grounds be set aside and that of the Assessing Officer restored. 3. The Appellant craves leave to amend or alter any ground or add a new ground which may be necessary." 24. It is noted that the grounds raised by the revenue is identical to ground no.5 of A.Y. 2005-06. Since we have already decide this issue in favour of the assessee by relying upon the order of the Tribunal and High Court for A.Y. 2003- 04, therefore, in this year also we do not find any force in the grounds raised by the revenue, as not distinction has been made by the either party on law or on facts. Thus, we dismiss the grounds raised by the revenue. 25. As a result appeal of the revenue is dismissed. Now we shall take up assessee's appeal in ITA No.7855/Mum/2011 for A.Y. 2008-09 involving following grounds: "Ground No. 1: 1.1....