2012 (2) TMI 74

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..... plicant to carryout design, engineering, procuring and transportation to the port of loading of the equipment for a coal fire power station built for the Indian company. According to the applicant, the payment received by it for the equipment supplied under the contract are not taxable in India under the Income-tax Act since the supply of material was outside the territory of India. It has also claimed that under the India-China Double Taxation Avoidance Convention no tax can be levied on it in India. It is in that context that the applicant came up with this application for an Advance ruling on the taxability or otherwise of the payment received by it under the contract. 2. The Revenue raised an objection that proceedings for the assessme .....

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..... nless otherwise agreed to by the parties in writing, all payments made by the owner to the applicant will be by Electric Funds Transfer to bank accounts in the Peoples Republic of China, notified in writing by the applicant to the owner. Bill of Lading and the Bill of Entry were also produced in support, to show that the owner, namely, the Indian company, was shown as the owner of the equipment. Transit insurance was also taken in the name of the owner. The port of loading was Shanghai. According to the applicant, all these clearly indicated that the title to the goods passed outside the territorial waters of India. 4. Learned Sr. Counsel for the applicant cited the decision of the Supreme Court in Ishikawazima-Harima Heavy Industries Ltd. .....

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..... of provisional completion after the removal of defects or deficiencies. The applicant was to provide all necessary assistance and support to relevant contractors at anytime during the period of 90 days after provisional completion of a unit. Revenue, thus submits that a considerable portion of the work relating to the supply is being done in India. Moreover, the applicant has to have continued presence in India by coordinating with the concerned contractors for the pre-commissioning and commissioning activities. The support has to be provided for 90 days, and such support cannot be provided without a presence in India. The applicant, therefore, had a permanent establishment in India. Thus the payment was liable to be fixed in India. 6. Wha .....

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