Home Case Index All Cases Income Tax Income Tax + AAR Income Tax - 2012 (8) TMI AAR This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2012 (8) TMI 161 - AAR - Income TaxDTAA between India and Austria - claim of absolute exemption from levying of tax in India - assignment of work to sub contractor by original assessee/applicant - Held that:- That under paragraph 3 of Article 5 of the DTAC, the applicant shall be deemed to have a PE in India and to carry on business through that PE if it provided services and facilities in connection with prospecting or extraction or exploration of mineral oil in India - as activities of the applicant are by its PE or deemed PE and consequently, the whole of the income arising out of the contract will be attributable to that PE. Exception contained in section 9(1)(vii) was confined to consideration received for mining or like project undertaken by the recipient - As in a case before us where the applicant had only surveyed the area earmarked by the contractor who had undertaken the mining project and rendered technical services to enable that person to perform the mining job itself, the exemption contained in Explanation 2 to section 9(1)(vii) of the Act was held to have no application - That person can at best be said to render technical services or services 'in connection with' the mining activity undertaken by the original contractor - the revenues earned by the applicant are not taxable in accordance with section 44BB and are taxable only as fees for technical services. Taxes on payments made by Essar Oil Limited under the sub-contract in question to be withheld under section 195 would be at 10.56% of the amount to be paid.
|