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2016 (3) TMI 1191 - AT - Income TaxRate of tax to be applied for the income received by the assessee - PE in India - DTTA - AO and the FAA held that the assessee had PE in India and were of the opinion that tax liability had to computed as per the provisions of section 115A and the assessee should have paid tax @20/30% - Held that:- We find that the assessee had issued 10 invoices to three Indian parties, that only one invoice was issued to GIPCL, two to NLC and balance seven to MNBECL. A close scrutiny of the invoices prove that the assessee had rendered services that were of consultancy nature and therefore same are governed by the provisions of Article 12 of the DTAA. In our opinion, for computing continuous stay for PE purpose actual stay of employees has to be considered and not the entire contract period. We find that the assessee had deputed one of its employee Dr. Dittrich to India and he had not stayed in India for more than 180 days. The assessee had informed the AO that Dr. Dittrich had visited India in pursuance of the agreements entered into with NLC and MNBCEL. It is also a fact the in two of the contracts no supervisory charges were booked by the assessee for the year under appeal, that the assessee had offered its income under the head FTS in its return. Article 12(4)deals with FTS and talks of services of managerial, technical or consultancy nature. Considering the above, we are of the opinion that payments received by the assessee should be assessed as per the provisions of Article 12 and not as per Article 7 of the Indo- German DTAA. In these circumstances, reversing the order of the FAA, we hold that the payments received by the assessee from GIPCL, NLC and MNBECL have to be taxed @10% and that the provisions of section 115A would not be applicable. Effective ground of appeal is decided in favour of the assessee. Interest levied u/s. 234B - Held that:- The issue stood decided in favour of the assessee by the decision of the Hon’ble Uttranchal High Court delivered in the case of Sedco Forex International Drilling Co. Ltd. (2003 (10) TMI 40 - UTTARANCHAL High Court) and Asia Satellite telecommunications Ltd. (2002 (11) TMI 263 - ITAT DELHI-C ). Before us, the Representatives of both the sides agreed that the Hon'ble Bombay High Court in the case of NGC Network Asia LLC (2009 (1) TMI 174 - BOMBAY HIGH COURT ) has held that where the payment is subject to tax deduction the assessee is not liable to pay advance tax. - Decided against the Assessing Officer.
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