AI Drafter 
TaxTMI 
TaxTMI 
2023 (5) TMI 962
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....that the assessee has a PE in India. 3. Briefly, the facts relating to the core issue are, the assessee is a non-resident corporate entity incorporated in Malaysia and a tax resident of Malaysia. As stated, the assessee specializes in fabrication of all types of offshore and onshore structures and complexes used in extraction and exploration of mineral oil. The assessee along with a Singapore based company, viz., M/s. Swiber Offshore Construction Pte Ltd. (Swiber), formed a consortium and entered into two separate contracts with Oil & Natural Gas Commission (ONGC). The contracts are named as 'wellhead platform contract' and 'process platform contract'. As per the terms of contracts, assessee was required to carry out design and engineering of platforms, material procurement in relation to platforms, fabrication of platforms and hook-up, testing and commissioning (HUC) of platforms. Before the Assessing Officer, the assessee claimed that in the relevant assessment years under consideration, the assessee along with Swiber had undertaken work relating to execution of wellhead platform contract. It was submitted that no activity in respect of HUC relating to process platform contrac....
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....rtner, Swiber and not of the assessee. He submitted, no contrary fact has been brought on record by the Assessing Officer to rebut assessee's claim. He submitted, though, the Assessing Officer has referred to a decision of the coordinate Bench regarding presence of equipment/vessel in India, however, he has not established on record the presence of any equipment or vessel of the assessee in India. He submitted, burden is entirely on the Revenue to prove beyond doubt that the alleged project office was involved in core activity of execution of the project. He submitted, without such a finding, it cannot be assumed that the project office established by the consortium partner is a fixed place PE of the assessee, through which it is carrying out its business. In support of this contention, he relied upon decision of Hon'ble Supreme Court in the case of DIT vs. Samsung Heavy Industries Co. Ltd., (2020) 117 taxmann.com 870(SC). Proceeding further, he submitted, as per the Memorandum of Understanding entered between the consortium partners, specific work to be undertaken by each of the Consortium partner have been specifically earmarked. He submitted, while, the assessee was responsible ....
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.... were originally proposed to commence from 18.12.2010 and to be completed by 30.04.2011. However, the activity actually commenced in India on 21.02.2011 and continued till 27.04.2011. Thereafter, the work was stopped due to monsoon period and the work again re-commenced on 27.11.2011 and was completed on 06.12.2011. Thus, he submitted, the total number of days, which could be attributed to the HUC activity in India, will aggregate to 76 days. Hence, the duration test of nine months is not satisfied. He submitted, installation site is not always available to the assessee, as ONGC has provided limited access to commence and proceed with the installation work in accordance with the contract. In this context, he drew our attention to clause 2.2.2 and 2.3.2 of the contract. He submitted, as per the aforesaid clauses, the activities cannot be carried on the project site post the onset of monsoon hence, same would require demobilization of the contractor from the project site. Therefore, for a period of seven months from May to November, the assessee did not have access to the construction site and had demobilised its barges. To demonstrate the aforesaid factual position, ld. Counsel soug....
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....sideration, is whether the assessee had a fixed place PE in India in terms of Article 5(1) of the Tax Treaty. On reading of Article 5(1), it is seen that PE means a fixed place of business, through which the business of an enterprise is wholly or partly carried on. Further, Article 5(2) encompasses within the fold of PE , a place of management, a branch, an office, a factory, a workshop, a sales outlet, a warehouse in relation to a person providing storage facilities for others, a farm, plantation or other place where agricultural, forestry, plantation or related activities are carried on and a mine, an oil or gas well, a quarry or any other place of extraction of natural resources. Thus, if we provide a contextual meaning to PE in terms of Article 5(1) and 5(2) of the Treaty, it is to be noted that the assessee had no fixed place of business, through which it carries on its business wholly or partly in India. Further, the assessee has no such place or establishment in India in terms of Article 5(2). The departmental authorities have alleged that the assessee had a project office in India, which has to be construed as PE. Whereas, the assessee has contested the aforesaid conclusion....
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.... we take the date of completion as 06.12.2011, it is more than nine months. Therefore, even, going by assessee's claim of date of commencement and date of completion, the duration exceeds nine months' period. In this context, assessee's claim is, the monsoon period has to be excluded as there was complete stoppage of activities and the assessee had to demobilise his personnel and equipments. 10. Pertinently, before the departmental authorities the assessee had not furnished any documentary evidence, whatsoever, to establish such claim. Clause 1.1.28 defines monsoon season to means that portion of the year between 16th May through 15th October (both days inclusive) when monsoon storms and high seas are of such frequency and intensity at offshore site location that construction work cannot be scheduled with any assurance. Clause 2.3.2 defines weather conditions. As per the said clause, the contractor is liable to bear all costs and delays due to adverse weather conditions. Further, in case the contractee requests the contractor to demobilize during monsoon season instead of requesting the contractor to continue the work during monsoon season, the cost of such additional mobilizati....