TaxTMI 
TaxTMI 
2016 (3) TMI 1191
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....for the year under appeal. During the course of hearing, the Authorised Representative(AR)did not press ground no. 2dealing with interest levied u/s. 234D of the Act as well as the Additional ground. Hence, both the grounds stand dismissed, as not pressed. 2. Assessee-company is registered in Germany and its core business activities include consulting services in the fields of exploration, mining and extraction. It filed its return of income on 10. 01. 2003, declaring income of Rs. 1, 13, 92, 198/-. The Assessing Officer(AO)completed the assessment on 23. 02. 2005, u/s. 143(3)of the Act, accepting the income returned by the assessee. However, he held that the assessee should have paid tax at higher rate. 3. Effective ground is about t....
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....received from Indian parties under the head Fees for Technical Services(FTS)as per the provisions of Article 12 of the Tax-treaty, that as per Article 12(5)the receipts in question were governed by Article 7 of the Treaty, that provisions of Article 7(3)provided that such receipts were to be taxed as per the various provisions of domestic law, that section 44D of the Act dealt with such receipts, that as per section 115A the fees for technical services received by the assessee from GIPCL was to be taxed @ 30% and the fees received from the remaining two parties were to be taxes @20%. 4. Aggrieved by the order of the AO, the assessee preferred an appeal before the First Appellate Authority (FAA). Before him, it was argued that the AO had ....
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....t the assessee had rendered supervisory services to the three Indian companies throughout the duration of the contract. Finally, the FAA upheld the order of the AO. 5. Before us, the Authorised Representative(AR) stated that supervisory activities carried out by the assessee lasted for less than six months'period, that in two of the contracts no supervisory charges were booked, that only one employee had visited India, that he stayed in India for 64 days only, that activities carried out by the assessee were to be taxed @ 10%, that the services provided by the assessee were governed by Article 12 of the DTAA, that designing was covered by Article 12(4)of the DTAA, that the assessee had no PE in India, that even if it had PE the Protocol ....
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....the assessee in India. We find that the assessee had issued 10 invoices(page no. 49-58 of the Paper book)to three Indian parties, that only one invoice was issued to GIPCL, two to NLC and balance seven to MNBECL. A close scrutiny of the invoices prove that the assessee had rendered services that were of consultancy nature and therefore same are governed by the provisions of Article 12 of the DTAA. In our opinion, for computing continuous stay for PE purpose actual stay of employees has to be considered and not the entire contract period. We would like to refer to the matter of J Ray Mcderrmott Eastern Hemisphere Ltd. (54 SOT363). In that matter it was held that period of stay in India for a non resident entity has to be counted from the act....
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....e governed by Article 7 of the tax treaty. We have gone through the order of Birla Corporation Ltd. (supra). We find that the issue in that matter was about installation and commissioning of projects and it did not deal with the issue before us. So, in our opinion the decision is of no help to adjudicate the issue. In these circumstances, reversing the order of the FAA, we hold that the payments received by the assessee from GIPCL, NLC and MNBECL have to be taxed @10% and that the provisions of section 115A would not be applicable. Effective ground of appeal is decided in favour of the assessee. ITA No. 2138/Mum/2006(Revenue's Appeal): 8. The only effective ground raised by the Assessing Officer is about deletion of interest levied u/....