TaxTMI 
TaxTMI 
2009 (6) TMI 8
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....ide India; (b) on shore supplies from India; and (c) design, detailing, painting and erection of the PTB and Fore Courts. Off shore supplies relate to overseas fabricated items and according to the applicant, the contract envisages supply, fabrication and delivery by the applicant outside India. 1.2 The applicant states that it sub-contracted the other two items i.e. on shore supplies and design, painting, erection etc. to its sub-contractor - Geodesic Techniques Pvt. Ltd. Bangalore, with the consent of L&T and DIAL. L&T, by its letter dated 26th May 2008 informed the applicant of exercising the election and deletion of the structural steel works in relation to the Fore Court area from the scope of work and the consequential reduction in the value mentioned in Appendix 5.2. Thus, the Agreement dated 27/2/2008 entered into with the L&T stands amended and the scope of work to be carried out by the applicant is now confined only to PTB and to the off shore supplies connected therewith. 1.3 The applicant submits that a cumulative reading of the relevant clauses in Appendix 5 of the Agreement reveals the following : (a) the off shore supplies, i.e., over-seas fabricated items and....
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....ho is the seller of the goods. In Ishikawajima-Harima Heavy Industries Ltd. vs DIT (Mumbai), the Supreme Court while dealing with off shore supplies forming part of a turn-key project/contract observed that "the entire transaction have not been completed on the high-seas, the profits on sale did not arise in India as has been contended by the applicant". Propositions 2 & 4 laid down in the concluding part of the judgment may be noted: "(2) Since all parts of the transaction in question, i.e., the transfer of property in goods as well as the payment, were carried on outside the Indian soil, the transaction could not have been taxed in India. (4) The fact that the contract was signed in India is of no material consequence, since all activities in connection with the off shore supply were outside India, and therefore cannot be due to accrue or arise in the country." Further, in proposition no.1, it was stated that "only such part of the income as is attributable to the operations carried out in India can be taxed in India". 3.1. Though that is the legal position, the question can only be dealt with in the light of the actual facts in the applicant's case especially the modal....
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....ployment schedule" (Appendix-3C). However, these annexures which may be relevant have not been filed. Be that as it may, coming to the stipulations in the Sub-contract Agreement, the following deserve mention: In Appendix 2A - 'Sub-contractor Responsibilities' - the 'sub-contract works' comprise (a) the entire structural steel works including structural steel roof for Terminal-3 and all structural supports, (b) design and engineering of structural system accommodating sub-contract works, (c) supply of all material, shop fabrication, assembling, shipment and transportation, erection, inspection, testing and commissioning (d) surface treatment and protective coating or painting for the entire sub-contract works, (e) provision of miscellaneous structural members and all allied components. We are not sure whether these responsibilities have undergone a change in view of the subsequent event of the applicant sub-contracting most of the works to Geodesic Techniques (P) Ltd. Para 1.2 of Appendix 2A, states thus : "The subcontractor provides the sub-contract works and assumes all the Main contract responsibilities and liabilities for the sub-contract works, on a back-to-back basis with t....
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.... are at a loss to know as to what exactly happened in this case. No clarification has been given, no sequence of events have been set out and no documents relevant to the off shore supplies of goods have been furnished in spite of putting the applicant on notice. We have before us only the Sub-contract Agreement in a truncated form. As per App. 2-A 1.2, the sub-contractor assumes all the main contract responsibilities and liabilities for the sub-contract works. The 'main contract' has not been filed to understand what are those responsibilities. Some other relevant documents such as performance bond and the conditions of sub-contract, "being the "core clauses of the NEC Engineering and Construction sub-contract" (referred to in para 2.5 of the Agreement) may have to be scrutinized, but they are not placed before us. 6. Then, as regards the permanent establishment also, this Authority wanted certain facts to be brought on record especially with regard to the activities undertaken by the applicant, apart from the import of goods. But, the applicant has not chosen to avail of the opportunity given by the Authority. At no point of time, the appellant's representative or the counsel wa....