TaxTMI 
TaxTMI 
TaxTMI 
2023 (12) TMI 1467
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....p together and disposed of by this common order for the sake of convenience. 3. With the consent of both the parties appeal of the revenue for AY 2014- 15 is taken as the lead case and the decision rendered thereon shall apply with equal force for AY 2015-16 also except with variance in figures. 4. The revenue has raised the following grounds of appeal for AY 2014- 15:- "1 Whether on facts and in the circumstances of the case and in law, the CIT(A) has erred in allowing benefit of Article 23(4) of convention between India and Norway by ignoring the vital fact that the assessee was not engaged solely in the supply operations 2 Whether on the facts and circumstances of the case and in law, the CIT(A) has erred in allowing benefit of Article 23(4) of convention between India and Norway by picking the offshore supply operations part in isolation out of the scope of work carried out by the assessee that consists of a number of other activities/services which are not covered by the special provisions of Article 23 of DTAA between India and Norway. 3 Whether on facts and circumstances of the case, the CIT(A) has erred in allowing benefit of Article 23(4) o....
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....ilization or demobilization or movement between drilling location to run anchors for the rigs and to carry necessary towline for the same. This activity is not at all covered by the provisions of Article 23(4) of the above DTAA 8 Whether on facts and circumstances of the case and in law, the CIT(A) has erred in allowing benefit of Article 23(4) of DTAA between India and Norway by ignoring the clauses mentioned in column 11 (d) of scope of work of the contract which inter alia contains the provision that the offshore vessel of the assessee would be required to handle anchors that a jack-up or semi sub or drilling ship might use for rig positioning This activity is not at all covered by the provisions of Article 23(4) of the above DTAA 9 Whether on facts and circumstances of the case and in law, the CIT(A) has erred in allowing benefit of Article 23(4) of DTAA between India and Norway by ignoring the clauses mentioned in column 1.1 (e) & (f) of scope of work of the contract which inter alia contains the provision that the assessee would be required to depute two captains with minimum of five years of experience in anchor handling This clause shows that the activity ....
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.... the decision of the Delhi High Court in GE Packaged Power Inc has not attained finality as the Department has filed review application in the Hon'ble Supreme Court 16. The appellant prays for leave to add, amend, modify or alter any grounds of appeal at the time of or before the hearing of the appeal." 5. We have heard the rival submissions and perused the materials available on record. The assessee is a non-resident company incorporated under the laws of Norway. The assessee entered with the contract with Gujarat State Petroleum Ltd for Anchor Handling Tug Supply (AHTS). This contract is continuing from previous year. The assessee earned gross revenue amounting to Rs. 28,83,67,595/- from Gujarat State Petroleum Ltd and offered the same to tax after applying deemed profit rate of 7.5% of gross revenue applying the the provisions of Article 21(4) of the India-Norway Double Taxation Avoidance Agreement (DTAA) after reducing service tax amounting to Rs. 2,92,40,718/- from the gross receipts as the same need not be included in the gross receipts thereon. The assessee also offered interest income on account of interest on fixed deposit amounting to Rs. 1,32,450/- in the....
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....er:- "1. Whether on the facts and in circumstances of the case and in law, the Ld. CIT (A) has erred in holding that the income of the assessee is liable to be taxable under Article 23(4) of India - Norway Double Taxation Avoidance Agreement ('DTAA'). 1.1 Whether the Ld. CIT(A) has erred in his interpretation of the scope of the provisions of Article 23(4) of the DTAA which are applicable only to profits derived from the activities of "transportation of supplies or personnel" and operation of other vessels "auxiliary to such activities". 1.2 Whether the Ld CIT(A) has failed to appreciate that the activities carried out by the assessee included "Anchor Handling Services" which are beyond the scope of the services contemplated under Article 23(4) of the DTAA and therefore, the Assessing Officer was justified in holding that the income of the assessee is not eligible for treatment the said Article and is liable to be assessed u/s 44BB of the Income Tax Act, 1961( 'the Act') 2. Whether on the facts and in the circumstances of the case and in law, the Ld. CIT(A) has erred in holding that Service Tax would not form part of gross receipt....
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....despite the specific mandatory provisions of the Act stipulating the employer being liable to deduct tax on the salary paid to the employee, thereby holding that an employee is not liable to pay advance tax on salary. 3.2 Whether the Ld CIT (Appeals) has erred in not appreciating the fact that the said case does not lay down a general proposition of law that interest u/s 234B is not chargeable in all cases, particularly in cases where the Non- Resident assessee/payee/deductee has played a role in inducing non- deduction or short-deduction on the part of the payer/deductor. 3.3 Whether the Ld CIT(Appeals) has erred in failing to take note of the observations of the Hon'ble High Court in the case of M/s. Mitsubishi [330 ITR 578, Del] that the role of the assessee/payee/deductee in short-deduction or non-deduction of tax needs to be ascertained before claim regarding non-liability to interest u/s 234B of the Act is accepted, a proposition affirmed subsequently in the case of M/s. Alcatel Lucent (judgment of Delhi High Court dated 7.11.2013 in ITA No. 327 & Ors. of 2012) and followed by 1TAT Delhi in the order dated 13.06.2014 in the case of Nortel Network India I....
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....k. Assessing Officer has given a very restricted meaning of Article 23(4) by ignoring the second of the two limbs of the Article. It amply covers the tugboats services provided by the assessee to ONGC. In our view CIT(A) has rightly considered the issue allowing the relief to the assessee, which we uphold. 6. In result, revenue's appeal is dismissed." The issue in the present assessment year is identical to that of A.Y. 2005-06. The CIT(A) rightly held that Article 23(4) of the Norway DTAA speaks of a case whereby transportation of personnel or materials to an oil drilling site would attract lesser rates of tax. The Assessing Officer wrongly placed reliance on the isolated clause (d) of the contract with M/s. GSPC to deny the benefit to the assessee. In fact the entire contract should have been considered properly by the Assessing Officer which he failed to do so. Therefore, in light of the decision of the Tribunal which is having identical facts in the present year as well, this issue is decided in favour of the assessee. Ground No. 1 of the Revenue's appeal is dismissed. 8. As regards to Ground No. 2, the Ld. DR submitted that the CIT(A) erred i....
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....d by the Assessee on the amount paid to it for rendering services is not to be included in the gross receipts in terms of Section 44BB(2) read with Section 44BB(1). Besides that the CIT(A) also held that the issue is coved in favour of the assessee due to the cases of M/s. Sedco Forex 139 ITD 188 (Del) and thereafter followed by the case of Precision Energy Service Ltd. (ITA No. 5609/Del/2012) and allowed this ground with direction to exclude service tax from the purview of computation of income u/s 44BB of the Act. The decision of the Hon'ble Apex Court relied by the Ld. DR is not applicable in the present case as the ratio laid down by the Apex Court is different than the issue involved in the present case. Therefore, in light of the decisions of the Hon'ble Delhi High Court, this issue is decided in favour of the assessee and against the revenue. Ground No. 2 of the Revenue's appeal is dismissed. 11. As regards to Ground No. 3, the Ld. DR submitted that the CIT(A) erred in holding that the assessee is not liable to pay interest u/s 234B of the Act and in observing that the issue is covered in favour of the assessee by decision in case of M/s. Maersk 334 ITR ....