TMI Blog2013 (7) TMI 586X X X X Extracts X X X X X X X X Extracts X X X X ..... impermissible to determine tax liability of a person other than the applicant. - MISC. APPLICATION A.A.R. No. 854 of 2009 - - - Dated:- 31-5-2013 - DR. Arijit Pasayat And TBC Rozara, JJ. For the Appellant : N. Venkatraman, Satish Aggarwal, Taranpreet Singh and Hargun Singh Sodhi. For the Respondent : R.S. Rawal and Bhupinderjit Kumar. ORDER:- PER : Dr. Arijit Pasayat This case has a chequered career. A brief reference to the relevant facts will be necessary. CTCI Overseas Corporation Ltd. (hereinafter referred to as "applicant") is a company incorporated in Hong Kong and is a wholly owned subsidiary of CTCI Corporation, Taiwan. 2. In the application for advance ruling filed, sofaras the factual scenario is concerned, the applicant pleaded as follows: 3. Applicant is in the business of engineering, procurement and construction of petroleum, petro-chemical and power plants. With a view to execute a project awarded by the Petronet LNG Ltd. (in short Petronet), it has formed a consortium with CINDA Engineering and Construction Pvt. Ltd. (in short CINDA), an Indian company, to develop a terminal for the receipt and storage of liquefied natural gas at Kochi, Ke ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... m there is no agreement under section 90(2) of the Act by the Government of India and the Government of Hong Kong. The taxability of the receipts in the hand of the applicant would be governed under section 9(1)(i) read with Explanation 2(b) to section 9(1) of the Act. The consortium partner CINDA will constitute business connection with CTCI in India and CTCI is responsible for whole of the contract alongwith CINDA. 8. Referring to various clauses of the contract read with Consortium agreement, the applicant refuted the Revenue's claim that as the role and responsibilities of each of the members of the consortium is specified and are to be paid separately, the partners to the consortium do not constitute an AOP for the purpose of taxability of the receipts. Reference was made to the decision in Hyundai Rotem Co. Korea (2010), 230 CTR 468; Hyosung Corporation (2009) 314 ITR 343; Van Oord Acz BV.(2001) 248 ITR 399. 9. The Authority in its ruling dated 1st February, 2012 inter alia observed as follows: "The question raised before us is about income received by the applicant on offshore supplies from Petronet. What we find is that no payment is made to the applicant. The pa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... P and one of the members of the AOP is a resident company as in this case, the actual ruling is clearly a mistake to be corrected to make the ruling consistent with the finding earlier rendered. This Authority had referred to the decision of the Supreme Court in Ishikawajima-Harima to arrive at the conclusion that the income from the offshore supplies are not chargeable to tax. In rendering that ruling, this authority has not specifically noticed the impact of the finding that the assessing unit under the Act would be an AOP of which one is a tax resident. On going through the ruling rendered by us it is seen that there is a clear omission to consider the impact of the finding that the consortium which has been entrusted with the contract and of which one of the members was an Indian resident, had the status of an AOP under the Act. Once the status of an AOP has been assigned to the consortium, then the consortium can be assessed only as an AOP and not its members individually. Therefore, the logical conclusion to the ruling should have been that the transaction of offshore supplies which was part of the contract undertaken by the consortium, had to be considered on t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t that the transaction has to be found taxable in the hands of the AOP consisting of the applicant and its joint venture partner. Therefore, it is urged that there was necessity to find out as to what would be the consequential finding to be given in the ruling. Further reference was made to the conclusion of the Authority that the part of the ruling dealing with the assessability of the income from the offshore supplies on the basis that the assessee would be an AOP has to be reopened and the application should be heard on that aspect. 15. Per-contra, learned counsel of the applicant submitted that the Authority has jurisdiction only to deal with the issues raised by the applicant and the specifically formulated questions relatable thereto and on no other questions. What the Revenue wants to project is a question which was not raised by the applicant and therefore could not have been decided by the Authority. Even though the Authority has directed the matter to be examined afresh in the order relating to the application under Rule 19 of the Procedure Rules, the Authority should not deal with that issue. 16. In order to consider the substance in the rival submissions it would b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e determination, by an authority constituted by the Central Government of a question of law or fact in relation to a transaction which has been undertaken or is proposed to be undertaken by a non-resident applicant. 17. Though the applicant for an advance ruling can give up some of the questions, but cannot modify them, so as to change its complexion and that the scope of its jurisdiction is confined to aspects or terms of the question on which the ruling is required. Though further issues do arise after hearing the Revenue on the question and issues can be reframed for greater clarity and convenience that is not the situation in the present case. 18. In the instant case the Authority had framed the questions as noted above. (The issues presently raised (by the Revenue) are conceptually different from the questions which were framed for adjudication and originally decided). While dealing with an application under Rule 19 it is not permissible to re-frame the questions or issues already framed and/or to add further questions. That being after the decision is rendered so, we do not find it necessary or permissible to decide the issues as to the raised by the Revenue for the first ..... 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