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2010 (4) TMI 884 - AT - Income TaxTaxability - receipt of barge hire charges - permanent establishment – Assessee was a tax resident of UAE - The test of ‘commercial and geographical coherence’ - assessee carried out two projects in India - Assessing Officer was of view that these two contracts were executed in same geographical area, for same party and were, therefore, required to be viewed as geographically and commercially coherent - He, further, held that since period of two contracts, taken together, worked out to 294 days which was in excess of threshold limit of nine months, assessee could be said to have a permanent establishment in India as per provisions of article 5(2)(i) of India-UAE tax treaty – Held that:- There is no finding that there is any interdependence and interconnection between the two contracts, or that these contracts are such that they can only be viewed as a coherent whole and not in isolation with each other - aggregation of time spent on different projects can only arise for connected projects. On the contrary, these two contracts are of different nature inasmuch as while one contract is for barge hire, the other one is for installation work - assessee did not have a ‘permanent establishment’ in India - amount received by the assessee as barge hire was rightly brought to tax by the Assessing Officer - any receipt for services rendered outside India’s continental shelf and economic zone are not taxable in India
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