TaxTMI 
TaxTMI 
2009 (6) TMI 9
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....etween the period 1993-1999, particularly, when according to the Department there was no permanent establishment in existence in India during the relevant period? 2. Whether, the Income Tax Appellate Tribunal has erred in law in holding that the expenses claimed by the assessee were allowable and constitute business loss to be set off under Section 71 of the Income Tax Act, 1961? 2. Brief facts of the case relating to Income Tax Appeal No. 91 of 2006, are that the respondent / assessee, a non-resident company, entered into contract with Oil and Natural Gas Corporation (for short ONGC) in connection with the work of drilling operations in oil exploration. Business under the contract was to be completed by the end of 1993. Thereafter, the respondent / assessee made efforts for its business, but could get fresh contract only in the year 1999. The assessee M/s Pride Foramer S.A. has its office in France. The respondent / assessee filed its return for the assessment year 1996-97, showing NIL income. The return reflects that there was income of Rs. 1,69,57,395/- as receipt on account of interest received on income tax refunds to the assessee, and against those receipts, the assessee ....
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....NGC in the year 1983, which expired in the year 1991-92, and thereafter there was no business activity till 1998, and fresh contract was awarded to the assessee only in the year 1999. The assessee submitted its return before the A.O. (Jt. Commissioner of Income-tax, Dehradun) for the assessment year 1997-1998, showing income to the tune of Rs. 5,49,628/- on account of interest received from the refund of income tax. As against this, expenses were claimed on various heads, such as, legal & professional charges, salary and administrative charges, vehicle maintenance, travelling expenses, miscellaneous expenses and depreciation. After processing the return under Section 143(1)(a) of the Act, the A.O. assessed total income of the assessee at Rs. 5,49,648/-, refusing to allow the expenses claimed on the ground that that assessee company did not carry out any business relating to work of oil exploration in India during the period the same are said to have been incurred. Also, penalty proceedings were directed to be initiated under Section 271(1)(C) of the Act. Aggrieved by said order dated 13.01.2000, the assessee preferred Appeal No. 352 / DDN / 1999-2000, before the CIT(A), Dehradun. S....
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....vertising, for the supply of information, for scientific research, or for other activities which have a preparatory or auxiliary character, for the enterprise; (f) the maintenance of a fixed place of business solely for any combination of activities mentioned in sub-paragraphs (a) to (e), provided that the overall activity of the fixed place of business resulting from this combination is of preparatory or auxiliary character. 5. Notwithstanding the provisions of paragraphs 1 and 2 where a person other than an agent of an independent status to whom paragraph 6 applies is acting in one of the Contracting States on behalf of an enterprise of the other Contracting State, the enterprise shall be deemed to have a permanent establishment in the first-mentioned Contracting State, if: (a) he has and habitually exercises in that Contracting State an authority to conclude contracts on behalf of the enterprise, unless, his activities are limited to the purchase of goods or merchandise for the enterprise; or (b) he has no such authority, but habitually maintains in the first mentioned Contracting State a stock of goods or merchandise from which he regularly delivers goods or merchandise on b....
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....e counter affidavit in Income Tax Appeal No. 49 of 2005, showing that in October 1996, the assessee was making correspondence with ONGC relating to hiring of manpower services in respect of export key personnel for drilling in deep waters. On perusal of said letter we find that this letter has been issued from Dubai office of the assessee in aforesaid appeal. In our opinion, this does not reflect that the business was being done in India as the earlier contract had long been expired and new contract by then had not been given to the assessee. Merely for the reason that the assessee sent some letters and made some offer from Dubai to ONGC does not amount doing business in India. We do agree that 'lull in business' does not mean that the assessee has ceased its business. But, when the assessee has neither permanent office, nor any other office in India, nor any contract was in execution during the relevant period, it cannot be said that they were in business in India, as such, it cannot be said that assessee was entitled to set off claimed by it under Section 71 of the Act. 8. Learned counsel for the respondent / assessee drew attention of this Court to sub-section (3) of Section 17....