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2011 (9) TMI 240 - AT - Income TaxPermanent Establishment ('PE') - Applicability of provisions of section 44BB - Interest u/s 234B - DTAA with Mauritius - Held that:- The assessee is not assembling parts of a machine, but to our mind these words have been added in the dictionary by way of illustration. Putting together the pieces of pipe lines in a desired manner, according to us, would amount to "assembling". - It is immaterial whether the activities are carried out for the same or different principals. The relevant consideration is the nature of activities, their inter-connection and inter-relationship and whether the activities are required to be regarded as a coherent whole in conjunction with each other. Since the project did not satisfy the time criterion, it has been held that the profits cannot be brought to tax. - Decided in favor of assessee. Stay in India - The contracting parties included within the definition of the PE only those assembly projects which lasted for more than 9 months. This has been specifically provided in the treaty. This leads to an inference that if an assembly project lasts for less than nine months or nine months, there would be no inference of PE. It is held accordingly. - Matter restored to file of AO for limited purpose to ascertain the period of the existence of the assessee in India and thereafter decide the existence of PE.
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