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2014 (2) TMI 1065 - ITAT AHMEDABADApplicability of section 115A(1)(b)(BB) and Section 9(1)(vii) of the Act - Business income or fee for technical services - Services in relation to construction of pipeline project - Responsibility to execute contract - Whether the assessee’s company is providing technical services and the receipts to be treated as business income or not - Held that:- The decision in Joint Stock Company Zangas Versus ADIT (International Taxation), Ahmedabad [2011 (8) TMI 370 - ITAT AHMEDABAD] followed - Even if extra responsibility of the assessee is there as per the consortium agreement and as per the terms of contract awarded by GAIL to the consortium, the assessee has not done those extra activities and the consideration received by the assessee is as per the cooperation agreement for the activities provided in the cooperation agreement and having accepted by the Assessing Officer the amount of consideration received by the assessee at 3 per cent of gross receipts of the consortium, it has to be accepted that the same is for providing FTS as per the cooperation agreement. The assessee was the leading partner of the consortium, the entire construction work of the project in the hands was done by the assessee and the assessee's activities are not confined to mere providing of FTS - the assessee is required to provide design and engineering of various aspects and is also required for preparing the welding procedure and is also required to review the work procedure for pipeline laying and in addition to this, the assessee is required to depute experts for site review and implementation by KPTL and technical supervision provided by the assessee. No case has been made out by the Assessing Officer to show that section 115A and section 9(1)(vii) are not applicable in the present case as per which the income of the assessee with regard to PDPL project is liable to tax @ 10 per cent as has been claimed by the assessee. - AO directed to apply the provisions of sub-clause BB of clause (b) of sub-section (1) of section 115A along with section 9(1)(vii) of the Act - the order of the CIT(A) confirmed but the AO is directed to verify that 96% receipts of contract has been disclosed by it in case of KPTL and tax has been paid on it – Decided in favour of Revenue.
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