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2019 (2) TMI 700 - AT - Income TaxPE in India - Grouting activities - Income accrued in India - applicability of section 44BB of the Act to Grouting activities - appellant company is engaged in providing grouting and precast solutions for subsea off-shore construction industry - DTAA - Held that:- It is the settled principle of interpretation in view of Vienna Convention of 1969, that DTAA needs to be interpreted “uberrimae fidei” which means ‘with utmost good faith’. It means that the Assessing Officer/DRP are rewriting DTAA. The contention of the ld. DR that the assessee deliberately manipulated length of projects to always keep it under 270 days is an ill-placed allegation only. The observation by the Assessing Officer/DRP that grouting is not a simple masonry work and involves complex aspects does not take it out of the construction activities as mentioned in article 5(2)(h) of the India UAE DTAA because there is no bifurcation of simple and complex masonry/construction work under Article 5(2)(h) and any further classification [as done by the Revenue] would amount to rewriting DTAA. When there is no option in a given case, the general Article 5(1) would get attracted which means that when there is an option [like in the present case], specific article will prevail. The establishment of PE in India is in respect of each assessment year only. Moreover, there is no bar in carrying on the activities year after year. The determination of existence of PE in India is to be made by reference to provision in DTAA. In our considered opinion, the ld. DR was trying to set up a new case which is not permissible by the decision of the Special Bench of the Tribunal in the case of Mahindra & Mahindra Vs. DCIT [2009 (4) TMI 207 - ITAT BOMBAY-H]. DR also contended that the matter should be sent back to the Assessing Officer for redetermination of the period of stay in India. Multiple opportunities are not permissible to any authority to experiment in setting up case as held in the case of Rajesh Babubhai Damania [2000 (6) TMI 5 - GUJARAT HIGH COURT]. Considering the facts of the case in totality, in the light of India UAE DTAA, we are of the considered opinion that there is no PE in India for the year under consideration. First grievance is accordingly, allowed. The alternative plea in respect of applicability of section 44BB of the Act becomes otiose.
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