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Hyundai Heavy Industries Co. Ltd. C/o. M/s. Hemant Arora & Co. Versus ADIT, International Taxation, Dehradun.

2015 (6) TMI 765 - ITAT DELHI

Existence of fixed place PE - fixed place PE in Mumbai treating its liaison office as such for the purpose of taxing royalties received from Hyundai Construction Equipment India (P) Ltd. (HCEIPL) - Held that:- The authorities below has simply followed its orders for earlier assessment years on the issue of treating the Mumbai Liasioning Office as PE. However, to decide the issue as to whether Mumbai Liaisoning is PE for the purpose of HCEIPL as well for the purpose of taxing royalties received f .....

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ion of income from GMR Project in item of “inside India” and “outside India” - Whether in absence of any allegation that the supply of spares was not made at arm's length price or that the price for the goods included any element of service rendered by the Chennai PE in India, there is nothing left for attribution to the PE? - Held that:- Tribunal for the assessment year 2007-08 on the issue in the case of assessee itself held that the contracts are divisible. The receipts pertaining to designin .....

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ut outside India is not taxable in India. So far as taxability of receipts pertaining to HMI (sub station) of Hyundai Heavy Industries Ltd. is concerned the matter is set aside to the file of the AO to examine the issue in relation to these project in view of finding of the Tribunal on the issue in relation to the above stated three projects and decide the issue accordingly after affording opportunity of being heard to the assessee. - Decided partly in favour of assessee for statistical purposes .....

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sessee need to explain that no expenses in relation to service tax are debited in the profit and loss account. As assessee has filed information on service tax. The matter is thus set aside to the file of the Assessing Officer to decide the issue afresh after giving opportunity to the assessee to explain that no expenses in relation to service tax are debited in the profit and loss account.

Interest under section 234B - Held that:- In the present case, assessee has full role in lower .....

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Meena,JJ. For the Appellant : Shri SD Kapila, R.R. Maurya, AR & Neetan Nagpal, CA For the Respondent : Shri Sanjeev Sharma, CIT( DR) ORDER Per I. C. Sudhir: Judicial Member The assessee has questioned orders of the authorities below on the following ground: That on the facts and circumstances of the case and in law, the learned A.O./DRP erred in: 1. Assessing the total income of the appellant at ₹ 21,17,72,916 as against the returned income of ₹ 4,62,51,710. 2. In passing laconi .....

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7; 5,16,57,291 pertaining to supply of spares from outside India for the GMR project to the Chennai PE. 5. Illegally determining the profit of the PE from operations inside India contrary to the show-cause notice dated 20.3.2013 wherein (as in the case other FTWW projects) the appellant was asked to explain as to why such profit should not be estimated at 25 percent of the gross Revenue from the GMR project. 6. In arbitrarily determining the profit from operations Inside India at ₹ 11.23 c .....

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royalties as business income instead of taxing it as income from interest from a debt-claim under Article 12(2) of the DTAA. 10. Taxing as business income the sum of ₹ 1,02,63,772 received by the appellant by way of reimbursement of actual amount of Service Tax paid on behalf of GMR. (Admitted Additional Ground). 11. Without prejudice to Ground No.10, even assuming that reimbursement of Service Tax is business receipt the learned A.O. has erred in not allowing the deduction of the same am .....

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und is legal in nature and does not need consideration of fresh material outside the record to adjudicate the issue. The Learned CIT(DR) on the other hand opposed the application. 2.2 Considering the above submission, we concur with the submission of the assessee that the issue raised in the additional ground is legal in nature and for adjudication of the same, no fresh material outside the record is required to be considered. We thus allow this additional ground for adjudication of the bench. T .....

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ficer is justified in attributing income from supply of spares FOB, Ulsan, Korea as per contract with GMR Power Ltd. will be decided under the heading Issue No.2 . 5. Heard and considered the arguments advanced by the parties in view of orders of the authorities below, material available on record and the decisions relied upon. 6. We find that the above ground Nos. 3 to 9 involve following two issues: i) As to whether Mumbai Liaison Office is fixed placed PE under Article 5 of DTAA with Korea fo .....

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the order. 8. The relevant facts are that the assessee is engaged in the business of offshore construction and power project. During the year under consideration, the assessee received revenues from the following projects: Sl. No. Name of Project Name of the Company Scope of work Revenue for the year 2008-09 1. Mumbai Uran Trunk Pipeline Project (MUT) Oil & Natural Gas Corporation Ltd. (ONGC) EPC contract for complete new oil and gas trunk pipelines on Uran Terminal Nil 2. GMR Diesel Generat .....

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ations alone 5,993,936 6. 250 UPD Tata Motors Ltd. Installation, commissioning, production support & training for main line conveyor 12,948,046 7. Nissan Motor India Private Ltd. - T & C Nissan Motor India Pvt. Ltd. Installation, commissioning, production support & training for main line conveyor 6,800,702 9. At the outset of hearing, the Learned AR submitted that the issue raised regarding the PE has been decided by the ITAT in the assessee s own case for the assessment year 2007-08 .....

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sessee under the agreement dated 20.3.2008. It paid FTS/Royalty to the assessee which has been found to be at arm s length price by the learned TPO. The contention of the assessee remained that it has no PE in India as the technology including training is provided to HCEIPL in Korea. 11. The Learned AR submitted further as under: i) AO/DRP have confused HCIPL royalty contract with FTS contracts with Tata & Nissan, which are for installation projects. HCEIPL (100% subsidiary of HHI) pays roya .....

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M). Interest is on delay in payment of royaly by HCEIPL and therefore taxable @ 15 percent under Art. 12 of DTAA, being interest on Debt claim. According to AO, it is business receipt & therefore taxable @ 40%. ii) Tata & Nissan Installation Projects lasted for period beyond 9 months prescribed in Art. 5(3) of DTAA. The assessee offered it for tax as FTS tax @ 10% of gross receipt. The AO taxes it as business income u/s 44DA read with Art. 7 of DTAA by estimating profit @ 25% of gross re .....

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he Learned CIT(DR) remained that the agreement is dated 20.3.2008 and provisions of sec. 44DA will apply if the royalty received is effectively connected to the PE of the assessee. He submitted further that as per Article 14.3(b), an engineer is deputed to supervise the plant which is part of technology agreement (pages 122 to 140 of the paper book - Vol.I). As the services are performed at a fixed place and business by the employee of the assessee, the corresponding fee/royalty is effectively c .....

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not born out of the facts nor is the case of the Assessing Officer/DRP. The case of the Assessing Officer is that Mumbai Liaisoning Office is PE for the purpose of HCEIPL also. This is also endorsed by the DRP holding that facts are same as in the case of old ONGC contract. The Learned AR contended further that it is optional for the HCEIPL to obtain supervising services of an engineer of the assessee company. He referred page Nos. 116 of the paper book - Vol. I wherein the assessee had furnishe .....

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sor is deputed, no PE in India is formed. There is no fixed place PE as the supervisor is deputed not for the business of the Korean Company but that of HCEIPL, an Indian company. Supervision in connection with a construction/installation PE would constitute PE only if such supervisory activities continue for more than nine months. There is no allegation to this effect either by the Learned CIT(DR) or the Assessing Officer/Learned CIT(Appeals). Hence, the interest on delayed payment of royalty b .....

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ed in Article 5(3) of the Treaty, it has an installation PE, else it does not have any PE in India. The DRP has noted that the assessee had relied upon the principles of generalia specialibusnon derogant and accordingly has taken a stand that Article 5(3) being a more specific provision override Article 5(1) and 5(2). However, the learned DRP found that the above proposition of the Assessing Officer on similar facts has been confirmed by them in earlier years. The learned DRP has noted further t .....

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lready overruled it. In support, the Learned AR has referred orders of the ITAT for the assessment years 2007- 08 and 2008-09 made available at page Nos. 566 and 624 of the paper book. 15. Having gone through the orders of the Tribunal in the case of the assessee itself for the assessment years 2007-08 and 2008-09, as cited above by the Learned AR, we find that the issue of Mumbai Liaisoning Office constitutes PE was in relation to the contract with ONGC and in the assessment year 2007-08, the I .....

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tead was as to how much profit was attributable to the PE. We thus find that the issue regarding the existence of PE at Mumbai relation to contracted project with ONGC in the assessment year 2007-08 has not been disputed by the assessee and it has been accepted as such by the ITAT. Again in the assessment year 2008-09, the ITAT vide its order dated 30.7.2013 in ITA No.5284/Del/2012 at page No. 19 and in para No. 20 has noted that in ground No.9 of the appeal, the assessee has questioned finding .....

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ndia. In view of this finding, the ITAT has held that the other issues raised in the grounds N. 7 to 10 have become infructuous. In nutshell, we find that the issue as to whether Mumbai Liaison Office is fixed place PE in relation to contract with ONGC under Article 5 of the Treaty with Korea has not been disputed by the assessee in the assessment year 2007-08 before the ITAT and the same has been followed in the assessment year 2008-09 in the order of the ITAT in this regard. 16. In view of the .....

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o be made afresh to meet out the ends of justice. We thus set aside the matter to the file of the Assessing Officer to decided the issue raised in ground Nos. 7 to 9 afresh after affording opportunity of being heard to the assessee under the above stated background. The ground Nos. 7 to 9 are thus allowed for statistical purposes. 17. Issue No. 2: The Revenue s stand remained that bifurcation of income from GMR Project in item of inside India and outside India is not correct. The contention of t .....

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PE maintained accounts which were duly audited, the assessee could not furnish all the bills, vouchers etc. for its claim of expenses. It was because the assessee has wound up the Chennai PE by the time the assessment proceedings were taken up. It was the reason that the Assessing Officer vide order dated 20.3.2013 required the assessee to show-cause notice as to why income should not be taxed as business profit under sec. 44BA. Summary of Disputed issues:- Particulars Interest income Business .....

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ssessee admitted that during the year, it had Permanent Establishment (PE) in India in relation to GMR contract. MUT contract was with ONGC and GMR Project was with Vasai Power Corporation Ltd. Besides, the assessee had also entered into contract with SCEIPL, TATA Motors Ltd. and Nissan during the year. The assessee has shown income from fee for technical services under sec. 115A from contracts with SECIPL, TATA Motors and Nissan Motors. Under the GMR Project, the assessee was required to provid .....

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ng part of receipts from GMR contract on account of operations carried outside India, to be not taxable in accordance with the provisions of sec. 5(2) read with sec. 9 of the Act and also Article-7 of the DTAA. It was pointed out that the issue with regard to taxability of Revenue from operations carried outside India, in respect of this year contract, has been a subject of dispute with the Revenue right from the assessment year 1998-99 and has travelled up to the ITAT and has also been decided .....

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e case of assessee itself reported in 291 ITR 482 (S.C). For the assessment year 2007- 08, the ITAT vide order dated 29.5.2012 has held the revenues from outside India operation as non-taxable in India. The Assessing Officer did not agree with the assessee and following its own order for the assessment year 2007- 08 has decided the issue against the assessee that Mumbai Liaison Office is a P.E. and is connected with ONGC or GMR Project. The learned DRP has upheld the same. 20. The Learned AR sub .....

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it contains any element of service rendered by the PE. Custom Duty & clearance for is reimbursed by GMR (Pg. 250/Vol.-II). As per Cl. 9.1 at Pg. 24 of the contract, assessee pr0cures material and spare parts on behalf of GMR and title to the imported goods pass to GMR on delivery at site. Thus no operation is carried out by the PE in India in respect of imported goods used in the project (Ref. Expl. 1 to Sec. 9(1)(i) read ITAT order for 2007-08 at Pg. 614/Vol.-IV) 21. We find that the issue .....

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y of spares from outside India was taxable? c) Whether in absence of any allegation that the supply of spares was not made at arm's length price or that the price for the goods included any element of service rendered by the Chennai PE in India, there is nothing left for attribution to the PE? d) Whether the income of Chennai PE from GMR project should not be assessed u/s 44DA read with Sec. 115A in the same manner as in the case of other FTS projects and as show-caused by the AO as order sh .....

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tenance, operations and supply of spares & tools for next ten years after the expiry of initial warranty period. The contract between two unrelated parties, which describes the operator's obligations therein. 22.2. The Contract dated 15.5.1997 for 'Operation and Maintenance', of the Power Plant is in two parts:- i) Operations & Maintenance services (including supply of locally available parts and material) to be rendered by Chennai PE for which consideration is paid by GMR Lt .....

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, but it is also contrary to the tax treatment approved by the Tribunal ever since A.Y. 1999- 2000. 22.4 Further, there is no dispute that the operations and maintenance services rendered by the assessee are 'technical services', which were effectively connected with the Chennai PE. Though, the PE maintains accounts, which are duly audited, the assessee could not furnish all the bills, vouchers etc for its claim of expenses. This is because the assessee had wound up the Chennai PE by the .....

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is in gross violation of principle of natural justice. Further, the Ld. AO has given no reason as to why FTS income from MGR PE should be taxed differently than income by way of projects executed for Tata Motor, Nissan Motors & HCEIPL. The Ld. AO has taxed FTS from those projects u/s 44DA by estimating business income of the PE at 25%, thus taxing it as effective rate of 10% of gross receipt. 22.6 Tax treatment by the Ld. AO is arbitrary and capricious and therefore may be deleted. 22.7 The .....

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#39;s requirement of supplies is broken down into 12 monthly invoices for procurement and supply of spares & tools etc. (Cl. 10 r.w. Schedule IV, V & VA of the Contract). The monthly invoices are duly verified by GMR before making payment. Any surplus inventory procured for GMR at the end of a year, it is carried forward and adjusted against requirement forecast for next year. A summary of the terms of the GMR contract is annexed. 22.9 The Custom duty and clearing charges etc. are fully .....

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see's are clearly at Arm's Length. The price of supply of spare parts, tool kits and other material FOB from Ulsan, Korea clearly does not include any element of service rendered by the PE. Indeed, no such allegation has been made by the revenue. The supply of spares etc. from outside India and income therefrom had never been attributed to the PE till A.Y. 2007-08. However, the Hon'ble Tribunal related it for A.Y. 2007-08 & 2008-09. In this connection, attention is drawn to follo .....

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i) History of Litigation - Pg. 201-204/Vol.-II ii) Order of ITAT 2007-08 - Pg. 566 at 583-584- 619/ Vol.-IV iii) ITAT 2008-09 - Pg. 631G & 631H/Vol.-IV iv) Submissions before AO dt. 25.2.2013 - Pg. 548/Vol.-IV Q. 2(c) Sales of spares to GMR at ALP. i) Uttrakhand High Court judgment - A.Y. 1994-95 & 1995-96. Pg. 46/Comp. ii) Tribunal order for A.Y. 1994-95 & 1995-96. Pg. 41 at 42-44/AM. iii) Contract with GMR Vasai Power - Annexure B of Paper Book iv) Written 'Note' on this i .....

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ng the year assessee has provided operation and maintenance services in respect of 200 MW power generation plant of GMR Vasai Power Corporation Ltd. (GMR). During the year assessee has shown receipt of IN R 15,37,21,278 and offered the same to tax. However, it has also invoiced an amount of USDF 1,125,889 (INR 5,16,57,291) to GMR by raising an invoice of USD 94,372 each month for 11 months and USD 87,796 for the month of April 2008. This amount of USD 1,125,889 has not been offered to tax for th .....

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is a conceded fact the assessee s Chennai Project Office (In respect of GMR Contract) constitutes a PE under the provisions of Article 5(3) of the DTAA. Article 5.1, 5.2, 6.3, 6.4 of the Operation and Maintenance Agreement explicitly refers to Project site that constitutes a fixed place PE as per paragraph 1 of Article 5 of the DTAA. Schedule 7 of the Agreement contains information on Manpower for operation and maintenance of the Project that include 4 supervisor of HHI (Hyundai Heavy Industrie .....

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of the commercial operation date of the last unit to be placed in commercial operation. Article 3.1 mentions General Scope of the work. Assessee (the operator) was to provide all works necessary for the operation and maintenance of the project facilities. The work scope for the operating period is given in Article 3.4 of the agreement. The operator is responsible for the operation and maintenance of each part of the project facilities. 5. Based on these facts on record it is clear that the asses .....

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able and not attributable to PE. It's claim that amount received is on account of offshore sales or activities carried outside India is the version of the assessee and not supported by the agreement with GMR. The assessee has not made any sales to GMR. It imported the spares, if any, on its own account for the purpose of executing the agreement. It has the obligation to provide spares and consumables under the agreement. These spares and consumables are used by the assessee in operation and .....

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nd tool kits in the maintenance. Pages 250 and 251 of the PB show that assessee is incurring expenses on clearing and forwarding. It is paying customs duty on import of spares. This indicates that the assessee is purchasing/importing spares against fixed payments made by GMR. Spares import by the assessee is for the GMR Project. Its clearing agency is customs clearing the spares. It is importing the spares (of what amount during the year, information on invoices and amount not on record) for the .....

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mer (ONGC). In this case as mentioned above the assessee did not make any sale to GMR and utilized the spares, if any, for the project. It has not provided any information on the purchases of spare parts, if any, against the amounts received from GMR. 8. Assessee has also relied on paragraph 32 of the Hon'ble ITAT Order for AY 2007-08 (Pages 610- 615 of PB-IV). This observation of the ITA"[Qertained to_illiGC Contract. In case of GMR Agreement there is no fabrication/installation work c .....

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easons stated in paragraph 10, not applicable for GMR project. 10. The claim of the assessee that offshore supplies are not taxable based on decisions in its own case is not relevant as for the facts of the case for this year are concerned. There are no sales leave aside offshore sales. The assessee has only been paid in USD on account of spares and payments to assessee by GMR are its receipts and it could have claimed expenses for purchases made it, if any. In absence of proof of any expenses i .....

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rried out in India (irrespective of place of title transfer) is an income deemed to accrue or arise in India (Explanation to section 9(1)(i) of the Act). Similarly, the profits attributable to PE are taxable in India. Taxation of deemed income under section 9(1) (i) is not dependent on the transfer of title, if any, but on the business connection and extent of operations in lndia 12. Place of transfer of title (though not proved by the assessee that it was outside of India)l does not affect the .....

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ile Company Ltd v. CIT [1954] 25 ITR 27 (SC) and Carborandum Co. V. CIT [1977] 108 ITR 335 (SC) in this regard. The Hon'ble Supreme Court in the case of Carborandum Co. (page 343) has held that income accruing or arising from any business connection in the taxable territories - even though the income may accrue or arise outside the taxable territories- will be deemed to be income accruing or arising in such territory provided operations in connection with such business, either all or a part, .....

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h purchase and use of spares and tool kits are being carried out in India. GMR is not paying for any out of India activities but in regard to operation and maintenance of power plant in Chennai. Income from Inside India activities 13. This concerns (concise) grounds of appeal numbering 5 and 6. 14. Paragraphs 13.3 to 13.11 and then paragraph 13.12 (b) on pages 20 and 21 of the assessment order deals with issue. As against income of INR 5, 57,44, 993 shown by the assessee, the AO worked out incom .....

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be kindly seen from pages 530 to 531 of PB-III which is information on tax deducted at source by the assessee. Assessee has filed copy of ledger accounts; however, supporting documents were not produced by the assessee. 24. The Learned AR rejoined with the following contentions: Vide written Reply dt.29.10.2014, the Ld CIT (DR) has made certain contentions, which are met point-wise in this rejoinder:- 1) GMR Project: i) DR s Contention That sales of spares to GMR is FOB Korea is not supported b .....

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are raised both for material procured locally and abroad. At the end of the year, necessary adjustment entries are passed by GMR adjusting the closing unused inventory towards next year's annual plan for imports. Schedule 4 bifurcates imported portion and Local rupee portion . Schedule 5 gives the list of repair Kits costs US $ (FOB Ulsan) and item-wise number of spares and parts required to be unported by GMR. Similar list in respect Deisel Engines FOB Ulsan is enumerated in Schedule 5A. Th .....

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is the reimbursement from GMR is booked as income ever since FY 1995-96. This position prevails this year also. The Ld. AO has accepted this position and has not interfused with it. Thus, the assessee, for the sake of convenience, deals with C & F agents on behalf of GMR. iii) CIT (DR):- "ITAT orders for AY 2007-08 & 2008-09 is in regard to ONGC contract and are not applicable to GMR contract." Rejoinder: Paragraph 20 of Tribunal s order for AY 2008-09 at Pg 6319/PB IV reads a .....

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the assessment year 2007-08, the Tribunal has dealt with the issue relating to MUT pipeline project, MSP platform project, of ONGC, and GMR (operation and maintenance contract) projects which are also under consideration in the assessment year in question. After discussing the issue in detail the Tribunal has summarized the reasons for not concurring with the AO..." Finally in paragraph 24, the Tribunal holds:- "Respectfully following the decision taken therein in para 32 of the said .....

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taxable in India. Rejoinder: The Ld. DR s contention is self contradictory. It is settled law that only that much of profit of the GE is attributable to the PE, which represents the element of service by the PE in India included in the price charged by GE for supply of of spares & parts sold from outside India. The Chennai PE charges GMR for all its activities in India. Since there is no allegation that the sale price of material exported from Korea is not at arm s length price or that it i .....

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ed profit, which was about 30% of gross receipts from GMR (both inside & outside India), he suo-motu and without giving any notice to assessee estimated 100% of gross receipt from sale of spares from outside India and about 70% of the gross receipts of the PE for O &M service inside India as business profit attributable to the PE. This is clearly illegal Ld. D.R. s reply is silent on this aspect of the matter. HCEIPL HCEIPL is 100% subsidiary of the assessee company. HCEIPL has set up pl .....

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at a fixed place & business by the employees of the assessee the corresponding fee / royalty is effectively connected to PE . Rejoinder: The Ld. D.R. has sought to make out an altogether a new case, which is not borne out of facts and nor is this the case of the AO/DRP. The case of the Ld. AO is that Mumbai LO is PE for the purpose of HEIPL also. This is also endorsed by the DRP holding that facts are same as in the case of old ONGC contracts. Clause 14 (3) of the Agreement reads as under: & .....

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employees at the Party A's plant in the Republic of Korea provided that the expenses for air-tickets, board and lodging for these employees shall be borne by the Party B; and (b) Annually 180 man-days of supervision by an engineer provided by the Party A at the Plant provided that the Party B shall bear the expenses of the air-tickets and local transportation for the Party A's engineer and shall pay to the Party A Four Hundred US Dollars (US$400.00) per calendar man-day (including trave .....

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her, the summary of invoices raised during the year together with copy of relevant invoices submitted to the AO clearly shows that both the receipts are on account of technology fee and no invoice was raised on account of supervision. (pgs. 186 & 195of PB/1) Further, there is no concept of supervision PE in Korean DTAA. Even if a supervisor is deputed, no PE in India is formed. There is no fixed place PE as the supervisor is deputed not for the business of the Korean company, but that of HCE .....

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sessee as per the above discussion remained that the offshore supplies are not taxable and Learned AR placed reliance on the decisions of the ITAT in its own case on an identical issue for the assessment years 2007-08 and 2008-09 (supra) decided in favour of the assessee. The contention of the Revenue remained that bifurcation of income from GMR Project in items of inside India and outside India is not correct. The submissions of the Learned AR remained that it is the last tenth complete year of .....

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the preceding paragraphs, the Learned CIT(DR) has tried to distinguish the facts of the case on the issue during the year. In the rejoinder, the Learned AR has also tried to meet out the contentions of the Learned CIT(DR) that facts of the present year are distinguishable from the earlier years on the issue. In the assessment year 2008-09, the ITAT has given its findings on the issue vide para Nos. 20 to 24 of the order reproduced hereunder for a ready reference: 20. On perusal of order of the T .....

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s dealt with the issue relating to MUT pipeline project, MSP platform project, of ONGC, and GMR (operation and maintenance contract) projects which are also under consideration in the assessment year in question. After discussing the issue in detail the Tribunal has summarized the reasons for not concurring with the AO that contracts are indivisible and the receipts pertains to preengineering services, designing, fabrication, procurement have element of income attributable to PE of the assessee .....

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idder to negotiate the bid. Even the department has not levelled any allegation to this effect,. The bidder can mail queries on technical aspect of the tender. Thus, it suggests that transactions of the assessee with the ONGC were at arm s length price and they are not associate concerns of each other. (k) All receipts for operation inside India have been offered to tax as income in earlier years as well as this year. The entire receipts from the installation work carried out in the offshore sit .....

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eration and maintenance contract) projects in favour of the assessee with this finding that the outside receipts pertaining to designing, fabrication and supply of material, activities carried out outside India is not taxable in India. So far as taxability of receipts pertaining to HMI (sub station) of Hyundai Heavy Industries Ltd. is concerned the matter is set aside to the file of the AO to examine the issue in relation to these project in view of finding of the Tribunal on the issue in relati .....

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low have erred in taxing the revenue of operation outside India disregarding the principle of attribution envisaged in Article 7(3) and principle of consistency envisaged in Article 7 (5) of DTAA, especially considering the facts that in absence of allegation that the payment by ONGC for operation outside India was not at arm s length or that it included any work carried out for services rendered in India. In ground No. 8.1 the grievance of the assesee remained that even assuming that supplies w .....

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mbai office constitutes a fixed place PE under article 5(1) of the DTAA. In ground No. 9.1 the action of the authorities below have been questioned whereby they have applied Article 5(1) to the facts of the case as against the specific provisions of Article 5(3) which as per the assessee is applicable to its case. In ground 9.2 the finding of the authorities below that PE stood constituted from the date of the notification of the award and not from the date when the installation activities comme .....

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al has been reproduced hereinabove. 24. Respectfully following the decision taken therein in para 32 of the said order, we hold that the receipts pertaining to designing, fabrication and supply of material, the activities carried out outside India is not taxable in India. Other issues raised in these grounds have become infructuous. These grounds are accordingly disposed of . 25.1 We thus find that there is no dispute that existence of PE was there during the year and the year under consideratio .....

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e Learned CIT(DR) distinguishing the facts of the case on the issue during the year, we are of the view that before following the order of earlier years on the issue by the ITAT, it is necessary to ascertain that the facts relating to the issues raised in ground Nos. 3 to 6 in the appeal for this year are similar to the facts of the earlier years i.e. assessment years 2007-08 and 2008-09. We accordingly set aside the matter to the file of the Assessing Officer to ascertain that facts like perfor .....

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the assessee in view of materials available on record. If the Assessing Officer after verification finds that the facts of this year on the issues raised in ground Nos. 3 to 6 are similar to the facts of the earlier years on the issues then he is directed to decide the issues following the decision of the ITAT in this regard for the assessment years 2007-08 and 2008-09 and of the Hon'ble Supreme Court in the case of assessee reported in 291 ITR 482. The ground Nos. 3 to 6 involving the issue .....

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are debited in the profit and loss account. The ground Nos. 10 & 11 are accordingly allowed for statitstical purposes. Additional Ground: 27. Interest under section 234B of the Act 27.1 The learned AR contended that the issue is covered by the decision of Hon ble jurisdictional High Court of Uttrakhand in the case of Maersk s Shipping - 334 ITR 79 and the decision of Hon ble Delhi High Court in the case of Alcatel - 264 CTR (Delhi) 240 is not applicable. He submitted further that the appella .....

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e on which also tax was duly deducted at the rate of 15% in accordance with Article 12 of the DTAA as entered into between India and Republic of Korea. He submitted further that for the assessment year under consideration, the provisions of sec. 234B are attracted only when the assessee, who is liable to pay advance tax under sec. 208 of the Act has failed to pay such tax. Since the entire income of the assessee was subject to tax deducible at source and tax was deducted at source was the payer, .....

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