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2012 (6) TMI 186 - AAR - Income TaxDTAA between India and France - Consortium Contract - taxability of amount receivable under project by appellant (foreign company) - contract awarded by Bangalore Metro Rail Corporation Limited to implement the design, manufacture, supply, installation, testing and commissioning of signaling/ train-control and communication system – assessee contended it to be divisible, off shore contract of sale and services - Held that:- Purpose for which the tender was invited by BMRC was for installing the signaling and communication system for the metro rail. It was not for supply of offshore equipments independently of the installation and commissioning. Nor was it for independent installation and commissioning, divorced from the design and supply of the equipments necessary. The consortium parties agreed to be jointly and severally liable to BMRC for the performance of all obligations under the contract. Such a contract has necessarily to be read as a whole and is not capable of being split up. Status as AOP - The contract was for performing the entire work at the joint responsibility of the four Members of the Consortium who came together to perform the contract. Members of the Consortium were all in business and they came together in pursuance of an intention to promote their businesses. There was a common purpose and there was concerted action. Thus, applicant, along-with the other members of the Consortium, formed an Association of Persons liable to be taxed as such. Hence, Contract the Consortium of which the applicant is a member, cannot be split up to treat a part of it as confined to offshore supply of equipment not capable of being taxed in India, and that the income from it is taxable as a whole both under both Income-tax Act and under the Double Taxation Avoidance Convention relied upon.
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