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2011 (7) TMI 98 - AAR - Income TaxTax liability - Agreement for Avoidance of Double Taxation between India and Korea - The applicant is a company incorporated and located in Korea - applicant entered into three separate contracts with DTL - Nothing in law prevents the parties to enter into a contract which provides for sale of material for a specified consideration, although they were meant to be utilized in the fabrication and installation of a complete plant - Regarding the revenue’s plea that as the applicant has a PE in India, the income arising should be taxed in India, it stated that the existence of PE would be for the purpose of carrying out the contract for onshore supplies and services etc. but such a PE would have no role to play in offshore supplies - Even if a PE is involved in carrying on some incidental activities such as clearance from the port and transportation, it cannot be said that the PE is in connection with the offshore supplies - Accordingly hold that the applicant is not liable to tax in respect of offshore supplies as per the Act - Decided in favour of assessee.
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