TaxTMI 
TaxTMI 
2019 (4) TMI 1474
X X X X Extracts X X X X
X X X X Extracts X X X X
....ndia. Be that as it may, the assessee was appointed as legal advisor for some of the projects in India and provided legal consultancy services to them. In connection with rendering such legal consultancy services, the assessee received fees from the clients in India. However, the assessee filed its return of income for the impugned assessment year on 31st October 2002, declaring nil income. In the statement accompanying the return of income, it was stated by the assessee that since it had no Branch Office in India, the fee received is not chargeable to tax in India in the absence of a PE. In the course of assessment proceedings, the Assessing Officer called upon the assessee to justify its claim that the professional fee received from the clients in India is not chargeable to tax in India. In response, it was submitted by the assessee that since none of its employees or other personnel have rendered services in India exceeding a period of more than 90 days within the financial year relevant to the assessment year under dispute, there is no PE in India. Hence, the income is not taxable in India. The Assessing Officer, however, did not find merit in the submissions of the assessee. A....
X X X X Extracts X X X X
X X X X Extracts X X X X
....erved that this bill was raised for work done in India during the period from 1st April 2001 to 25th April 2001. Further, he observed, as per the material on record from 17th April 2001 to 25th April 2001, Shri Narayan Iyar was the only employee living in India. Therefore, in absence of any evidence furnished by the assessee to show that during that period no services were rendered in India, assessee's contention that Shri Narayan Iyar has not rendered any service as he was in vacation cannot be accepted. As regards assessee's contention that multiple counting of common days for computing the period of 90 days, is to be avoided, learned Commissioner (Appeals) rejected such contention by holding that the activities of the nature of furnishing of services by an Enterprise through its employees are to be seen employee wise and aggregated. Further, he observed, since the employees of the assessee were rendering services to different clients in India at the same time, the contention of multiple counting would not be applicable. Accordingly, he upheld the decision of the Assessing Officer that the assessee had a PE in India under Article-5(2)(k)(i) of India-U.K. Tax Treaty. 5. The lea....
X X X X Extracts X X X X
X X X X Extracts X X X X
....e raised to Enron International vide Invoice no.SN200460/2001, dated 27th April 2001 is for services rendered outside India. To emphasize that the facts and figures shown in the statement of amount invoice placed at Page-29 of the paper book, learned Sr. Counsel submitted, the figures shown towards amount received for services rendered in India and outside India have been accepted by the Assessing Officer in the order dated 31st December 2007, while giving effect to the order of learned Commissioner (Appeals). Thus, he submitted, since it is proved that Shri Narayan Iyar, was on vacation from 17th April 2001 to 4th May 2001, his presence in India cannot be counted for computing the period of 90 days. 6. As regards the issue whether multiple counting of employees staying on a particular day in India is permitted or not, learned Sr. Counsel drawing our attention to Article-5(2)(k)(i) of India-UK Tax Treaty submitted, as per the language used the employees or other personnel of the assessee must have rendered services in India for more than 90 days. Therefore, multiple counting of employee on a single day has to be avoided. In support of such contention, learned Sr. Counsel relied up....
X X X X Extracts X X X X
X X X X Extracts X X X X
....the Assessing Officer has not made much discussion on this aspect in the assessment order, however, learned Commissioner (Appeals) on the basis of remand report furnished by the Assessing Officer has observed that during the alleged period of vacation from 17th April 2001 to 4th May 2001, Shri Narayan Iyar has rendered service to the assessee's clients in India. To emphasize such fact, learned Commissioner (Appeals) has specifically referred to Invoice no.SN 200460/2001, dated 27th April 2001, raised on Enron International for an amount of US $ 68,220.42. Referring to the said invoice, learned Commissioner (Appeals) has reasoned that since such invoice is for on-shore services in India and the period for which such invoice was raised there was no other employee working in India except Shri Narayan Iyar, it proves that during the alleged period of vacation, Shri Narayan Iyar, was rendering services to the clients of the assessee in India. It is relevant to observe, it is the specific claim of the assessee that Shri Narayan Iyar had availed study leave from 17th April 2001 to 4th May 2001, hence, has not rendered any service to the assessee's client in India. It is observed, the c....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ys as no other employee of the assessee was rendering services in India. 9. The next issue which requires consideration is, whether multiple counting of employees on a single day is permissible. A careful reading of Article-5(2)(k)(i) of India-UK Tax Treaty makes clear that as per the expression used therein if the employees or other personnel have stayed in India for a period exceeding 90 days in any 12 month period, it will constitute a PE. In the facts of the present case, undisputedly, the Assessing Officer has reckoned any 12 month period to be the financial year beginning from 1st April 2001 to 31st March 2002. Therefore, as per the meaning of Article-5(2)(k)(i) of India-UK Tax Treaty, if the employees of the assessee had stayed in India for rendering services for a period exceeding 90 days, then only it will constitute a PE. Therefore, the stay of employees in India on a particular day has to be taken cumulatively and not independently. That being the case, multiple counting of employee in a single day, as was done by the Departmental Authorities, is impermissible under Article-5(2)(k)(i) of India-UK Tax Treaty. The aforesaid view has been expressed by the Tribunal in cas....