TMI Blog2012 (8) TMI 746X X X X Extracts X X X X X X X X Extracts X X X X ..... ract into two. The applicant, according to it, has taken advantage of the splitting up by adopting the stand that the consideration for supply is not chargeable to tax in India. The first contract was for "the supply of machinery, spare and wearing parts and technical documentation for the production of Autoclaved Aerated Concrete" and the applicant has agreed "to undertake the design, engineering, supply and delivery of machinery, spare and wearing parts and technical documentation forming part of the Project". This cannot be taken to be a contract for "the sale of property" - rule on the question formulated that the transaction in question generates fees for technical services in the hands of the applicant and it does not come under th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as inextricably and essentially linked to the sale of property. Hence it is excluded under from taxation. It is in this context that the applicant approached this Authority with the present application. 3. After hearing the applicant and the Revenue, this Authority allowed the application under section 245R(2) of the Act to render a ruling on the following question even while reserving for consideration the question whether the transaction is one designed for avoidance of tax in India when considering the application under section 245R(4) of the Act for a ruling. "Whether the payment under the Contract No.A30.02411.2-PS dated 7th August 2008 entered into between Grasim Industries Ltd. And HESS ACC System B.V, (HESS) for supply of proj ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ract. That is on the basis of treating it as an independent contract. The service contract was for rendering technical services and the income was chargeable to tax as such. This was really a scheme for avoidance of tax. 5. It is not disputed by the applicant that what is payable under the transaction involved herein is fees for technical services. The only contention raised is that under the DTAC the consideration received is "for services that are ancillary and subsidiary as well as inextricably and essentially linked to the sale of property" in terms of paragraph 6(a) of Article 12 of the DTAC. 6. Both the contracts executed on 7.8.2008 are produced. On going through them, it is clear that the contract was neither for sale of pro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... inery, spare and wearing parts and technical documentation for the production of Autoclaved Aerated Concrete". The applicant has agreed "to undertake the design, engineering, supply and delivery of machinery, spare and wearing parts and technical documentation forming part of the Project". This cannot be taken to be a contract for "the sale of property". I am satisfied that the exception relied on by the applicant is not attracted. 9. Thus, I hold that the consideration received would be fees for technical services under the Act and under the DTAC. 10. I, therefore, rule on the question formulated that the transaction in question generates fees for technical services in the hands of the applicant and it does not come under the excep ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
