TaxTMI 
TaxTMI 
2013 (2) TMI 457
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....onal B. V. and Hollansche Aanneming Maatschappij B. V. (BKI/HAM) incorporated under the laws of Netherlands on November 24, 1993, with a limited liability. During the assessment year 1994-95, the assessee entered into a sub-contract for dredging and back filling works with Hyundai Heavy Industries in respect of the second Basin Hazira Trunk Pipeline Project. The contract comprised dredging a trench for laying the pipeline and back filling of the trench after the pipeline had been laid. The dredging activities commenced in India with effect from December 27, 1993, and was completed on June 12, 1994. It may be noted here that the contract was spilled over two assessment years, i.e., 1994-95 and 1995-96 and that the entire duration of the work....
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....-see had a permanent establishment in India. 5. The assessee, being aggrieved by the assessment order under section 148 of the Act, filed an appeal before the Commissioner of Income-tax (Appeals). The learned Commissioner (Appeals) by an order dated February 4, 2002, allowed the appeal and held that no permanent establishment of the asses-see existed in the year under consideration and, consequently, no part of the revenue was taxable in India. The Commissioner of Income-tax (Appeals) found that the contract was for less than 180 days and was spilled over two assessment years, i.e., for the assessment years 1994-95 and 1995-96. The appellate authority found that for the assessment year 1995-96, the assessee was taxed in India on the ....
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....le for the assessment year 1994-95. 7. The Revenue, being aggrieved by the aforesaid order, filed an appeal before the Tribunal which was dismissed by an order dated June 23, 2006. The Revenue, being aggrieved by the said order, filed the present appeal under section 260A of the Act which was admitted on the following sub-stantial question of law : "1. Whether the hon'ble Income-tax Appellate Tribunal was legally correct in upholding the decision of the Commissioner of Income-tax (Appeals) on the facts in his finding that the assessee did not have permanent establishment in India within the meaning of article 5 of the DTAA between India and the Netherlands ? 2. Whether the hon'ble Income-tax Appellate Tribunal was legal....
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....ement ; (b) a branch ; (c) an office ; (d) a factory ; (e) a workshop ; (f) a mine, an oil or gas well, a quarry or any other place of extrac-tion of natural resources ; (g) a warehouse in relation to a person providing storage facilities for others ; (h) a premises used as a sales outlet ; (i) an installation or structure used for exploration of natural resources provided that the activities continue for more than 183 days. (3) A building site or construction, installation or assembly project constitutes a permanent establishment only where such site or project continues for a period of more than six months." 10. A perusal of article 5(1) of the treaty indicates that a "....
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....ent order 1994-95 have given a finding of fact that the entire duration of the contract was from December 27,1993, till June 26, 1994, i.e., less than six months. Article 5(3) of the treaty provided that in order to constitute a permanent establishment such site or project should continue for a period of more than six months. Such site or project, in our opinion, is provided under article 5(2) of the treaty and, therefore, the site or project provided under article 5(2) should continue for a period of more than six months in order to constitute a permanent establishment. Since a categorical finding of fact has been given by the appellate authority that the contract was for less than six months, it becomes absolutely clear that the assessee ....