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2015 (6) TMI 765 - ITAT DELHIExistence of fixed place PE - fixed place PE in Mumbai treating its liaison office as such for the purpose of taxing royalties received from Hyundai Construction Equipment India (P) Ltd. (HCEIPL) - Held that:- The authorities below has simply followed its orders for earlier assessment years on the issue of treating the Mumbai Liasioning Office as PE. However, to decide the issue as to whether Mumbai Liaisoning is PE for the purpose of HCEIPL as well for the purpose of taxing royalties received from HCEIPL and interest earned on delayed payment of royalty as business income, verification of the above aspects of the facts/contentions raised by the Learned AR is required to be made afresh to meet out the ends of justice. We thus set aside the matter to the file of the Assessing Officer to decided the issue raised afresh after affording opportunity of being heard to the assessee under the above stated background. - Decided in favour of assessee for statistical purposes. Bifurcation of income from GMR Project in item of “inside India” and “outside India” - Whether in absence of any allegation that the supply of spares was not made at arm's length price or that the price for the goods included any element of service rendered by the Chennai PE in India, there is nothing left for attribution to the PE? - Held that:- Tribunal for the assessment year 2007-08 on the issue in the case of assessee itself held that the contracts are divisible. The receipts pertaining to designing, fabrication and supply of material, the activities carried out outside India is not taxable in India. Respectfully following this decision on identical issue in the assessment year under consideration we decide the issue raised relating to MUT pipeline project, MSP platform project, of ONGC and GMR (operation and maintenance contract) projects in favour of the assessee with this finding that the outside receipts pertaining to designing, fabrication and supply of material, activities carried out outside India is not taxable in India. So far as taxability of receipts pertaining to HMI (sub station) of Hyundai Heavy Industries Ltd. is concerned the matter is set aside to the file of the AO to examine the issue in relation to these project in view of finding of the Tribunal on the issue in relation to the above stated three projects and decide the issue accordingly after affording opportunity of being heard to the assessee. - Decided partly in favour of assessee for statistical purposes. Taxing the entire revenue pertaining to outside India operations as income of the assessee - Held that:- These grounds have been covered by the Tribunal in the case of assesee itself for the assessment year 2007-08 to hold that the receipts pertaining to designing, fabrication and supply of material, the activities carried out outside India is not taxable in India. Other issues raised in these grounds have become infructuous. Deduction of service tax - Held that:- The assessee need to explain that no expenses in relation to service tax are debited in the profit and loss account. As assessee has filed information on service tax. The matter is thus set aside to the file of the Assessing Officer to decide the issue afresh after giving opportunity to the assessee to explain that no expenses in relation to service tax are debited in the profit and loss account. Interest under section 234B - Held that:- In the present case, assessee has full role in lower deduction of tax, as it had obtained order section 197 of the Act at lower rate and provided to GMR. In such a case, the payer GMR was not at fault and no order under section 201(1) can be passed in that case as they deducted tax as per order under section 197 of the Act. As the tax was not paid correctly and there was a shortfall in payment of tax, therefore, the interest under section 234B is payable by the assessee.
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