TaxTMI 
TaxTMI 
2016 (3) TMI 1097
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....ated in India. It started its operation in 2006. The assessee company filed its return of income on 30.9.09, declaring total income at Rs. Nil.The Assessing Officer (AO)completed the assessment,u/s.144(3)r.w.s 143(3) of the Act on 9.2.12,determining the income of the assessee at Rs. 2.97 crores, holding that the business of the assessee was covered by the provisions of section 44B of the Act. 2.The first effective Ground of Appeal is about chargeability of income u/s.44B of the Act and existence of Permanent Establishment (PE).During the assessment proceeding the AO found that FCLhad entered into an agency agreement with M/s.Volkart Flemming Co. and Services Ltd.(VFSSL) w.e.f. 1.1.2007, that it was appointed as an agent in India by FCL. Th....
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....the DTAA and held that the assessee had carried on part of business to a fixed place of business,that it fell within definition of PE under paragraph-1 of Article-5, that the assessee had fixed a permanent place in India from where it used to secure its business, that the office of the agent was fixed place for tax treaty purposes. The AO directed the assessee to explain as to why it should not be held that it was having place of effective management in India.After considering the submission of the assessee,he held that the holding company was working as an agent for the assessee, that it did not have any other agent in India except the parent company,that the parent company was concluding the contracts on behalf of the assessee with vario....
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....usiness connection in India and it is also an Agency-PE as well as fixed place of PE in India,that the management was with parent company located in India. He further held that AO had correctly applied the provisions of section 44B of the Act, that it did not qualify for the exemption of Article 8 of the DTAA.Finally, he upheld the order of the AO. 4.Before us,the Authorised Representative(AR)argued that the assessee was not holding any bank account in India,that it had no fixed place of business in India,that the assessee was a subsidiary of the Indian company,that as per the provisions of DTAA there was no PE in India.He referred to paragraph 10 of the Article 5 of the DTAA.With regard to Agency-PE, he referred to page No.63 and 65 of the....
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....t with VFSSL w.e.f. 1.1.2007, that the AO and the FAA had held that the assessee was having business connection in India and that the parent company was taking decision on behalf of the assessee,that they have further held that the assessee had service PE/Agency-PE in India and that the income of assessee was taxable in India u/s.44B of the Act. During the assessment proceedings relevant details about the Director handling the business at Singapore were submitted before the AO. It had also filed details of remuneration paid to Padmakumar Unnikrishnan (pg-56 of the PB).The assessee had,vide its letter dt.20.12.2011 (pg-53 of the PB),submitted a copy of minutes of meeting held in relation to the year under appeal and had informed the AO that....
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....y,was factually correct. We find that assessee had not claimed exemption of Article 8 of the DTAA as it was not in the shipping business.Therefore, the income of the assessee had to assessed as per the provisions of tax treaty which deals with business income.Here,we would like to mention that FAA was not justified in confirming the order of the AO holding that provisions of sec.44B of the Act would be applicable with regard to the disputed amount.Section 44 B deals with the shipping business and the AO had himself admitted that the assessee was not in shipping business.The assessee did not own or charter or took on lease any vessel or ship for the year under consideration, it was only providing container services to its various clients. T....