TMI Blog2011 (9) TMI 70X X X X Extracts X X X X X X X X Extracts X X X X ..... ature of business profits and taxable as per Article 7.1 of the DTAA is not denied by the Revenue - In fact the Revenue did not object when the applicant offered income in the past on the basis that it has a PE in terms of Article 5.3 of the DTAA - Held that: in the given facts of the case, aggregation of the periods of the contracts cannot be made for these four contracts and consequently the applicant cannot be said to have a PE in terms of Article 5.3 of the DTAA - the income is not taxable in India - A.A.R. No.975 of 2010 - - - Dated:- 19-9-2011 - Mr. P.K.Balasubramanyan, Mr. V.K. Shridhar, JJ. Present for the applicant Mr.K.Meenakshi Sundaram, CA Present for the Department Mr. K.R.Vasudevan, Additional Director of Income-t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion Avoidance Agreement with Singapore (DTAA). As the income from the execution of these projects is in the nature of business profits, it would be taxable in India as per Article 7.1 of the DTAA only if it has a Permanent Establishment in India. No amount can be said to be payable as a fee for technical services in view of Explanation 2 to section 9(1)(vii). In the event the income accruing to the applicant is taxable in India, the rate of deduction of Income-tax would be 2% plus surcharge. 3. The applicant has raised the following questions for a ruling from this authority:- 1. Whether looking to the nature of activities carried on / to be carried on by the Applicant, which is a Singapore based company and a non-resident as per the p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... four contracts, the cranes and the persons were in India which constitutes a service PE under Article 5.6 of the DTAA. It is further argued that as the applicant has floated a wholly owned subsidiary in February, 2010 which has applied for a SEZ in Dahej and Shri G.Maran is shown as the contact man of the applicant, the subsidiary is a PE of the applicant. 6. We have perused the work orders for these four projects. The scope of work under these projects is similar and requires the applicant to provide ground preparation details for the movement of cranes and obtain approval to the scheme under which erection is to be executed. The Load Movement Test on the crane is required to be organized. The holding of the equipments after erection bef ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the contracts are to be aggregated to reckon the threshold of 183 days under Article 5.3 of the DTAA in a fiscal year in a case where the projects are not carried out for the same principal. We notice that Naftogaz India had given two orders: one order in FY 2009-10 and another in FY 2010-11. These are to carry out different work: one is for the erection of Coke Drum and Fractionators column at Bina and other for erection of equipment at CDSP unit or GGSRL at Bhatinda. It can therefore be said that for FYs 2009-10 and 2010-11 the parties are different. All these are independent projects and there is no interconnection and interdependence amongst them. None of them appears to be an extension of another. Therefore the duration test for insta ..... X X X X Extracts X X X X X X X X Extracts X X X X
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