TMI Blog2017 (5) TMI 1320X X X X Extracts X X X X X X X X Extracts X X X X ..... are unconnected works. In such situation, the Assessing Officer’s view that the period of the two works should be combined cannot be sustained. Departmental Representative’s submission that the issue should be considered by applying a different Article than the one applied by the A.O. the same is also not sustainable. The A.O. has invoked Article 5(2)(h) of the DTAA between India and UAE and has based his decision on the analysis thereof. After consideration of the same learned CIT(A) has found that the assessee cannot be held to be liable for tax as the period of the stay was less than nine months required to form a permanent establishment so as to come under the ambit of taxation under this Article. Now learned DR is agreeing that the view of the A.O. is not sustainable, however, he states that the issue should be considered under Article 5(1) of the said DTAA. We find that the above is neither the case of the A.O. nor any ground in this regard has been raised. Hence, we do not find this plea of the learned Counsel of the assessee sustainable. - Decided partly in favour of assessee. - ITA No.6414/Mum/2012 - - - Dated:- 24-5-2017 - Shri Shamim Yahya, AM, And Shri Ravish ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tax under Article 7 of the DTAA. 9th November, 2008 to 11th June, 2009. The assessee submitted that the assessee did not have a Permanent Establishment in India and the three contracts were for a period of less than 9 months, therefore, the total receipts are not taxable under the DTAA. 4. However, not convinced with the above submission of the assessee, the Assessing Officer held as under:- The assessee company has entered into three contracts during the year. First let us take up the contract with Leighton Contracts (India) hereinafter referred as Leighton or LCI . 1. The assessee company has entered into a contract with LCI on 16/07/2008 to provide services of personnel, provision of survey services and provision of a barge. As per the terms of the contract, all the personnel and barge are to be mobilized from Abu Dhabi, UAE and all the costs are to be incurred by the Leighton. A letter has been written by the Leighton to the assessee on 16/07/2008 itself asking it the names and CV of the personnel to be deputed to India for the work. On going through the documents filed during the course of assessment proceedings, it is also foun ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 8. In view of the aforesaid discussion, it is held that the assessee company has a PE in India as the project continued for more than 9 months in India as far as the project with Leighton is concerned and taxed accordingly. 9. In case of the project for Reliance Ports and terminals and Arcadia Shipping, both the projects were continuing simultaneously in India. On a perusal of the past records of the assessee, it was noticed that the assessee company has been doing these types of projects for the several number of years in India. If we see the sequence of events, the assessee company started with the project for Reliance from January 2008 which continued uptill 28/6/2008. Then the project Arcadia shipping was started in the month of March 2008 which continued till May 2008. Later on, it started Project with Leighton which started in the month of July and continued till June 2009. This clearly indicates that the assessee company has a presence in India throughout the year almost except for some days. Still, it is claiming that it does not have a PE in India. 10. The cases such as assessee company, it is not possible to execute the contracts without permanent presenc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Party Nature of service Project duration No. of months / days 2008-09 Leighton Contracts (India) Pvt.Ltd.ts Charter Hire vessel Barge JU251 5th December, 2006 to 6th June, 2007 6 months and 1 day 2010-11 Leighton Contractors (India) Pvt.Ltd. Towage Agreement for Towage charges of Regina 250 from PNV Channel to Abu Dhabi. 9th November, 2008 to 11th June, 2009 7 months and 2 days. The other projects are with Arcadia and Reliance during the year 2009-10, Arcadia in A.Y. 2008-09 and MPSEL Ltd. in A.Y.2010- 11. 4.4 From the periods of projects as above, it is evident that the appellant has not spent 9 months in India for any project or during the period of any 12 months since A.Y. 2008-09 and therefore, it cannot be said to have a PE within the meaning of Article 5(2)(h) or 5(2)(i) of the Treaty during A.Y. 2009-10. Further, in case of Arcadia project and Reliance project in A.Y. 2008-09 and 2009-10, it cannot be sa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Article of the DTAA should not be applied for making the disallowance. 8. Upon careful consideration, we note that learned Counsel of the assessee has conceded that for the services rendered to Arcadia Shipping Limited, the same needs to be taxed u/s 44BB of the Income-tax Act. Hence, as regards the issue of taxability u/s 44BB of the services rendered to Arcadia Shipping Limited, we set aside the order of learned CIT(A) and restore that of the Assessing Officer. 9. As regards the services rendered with respect of other works, we note that the duration for each of them was less than nine months. The learned CIT(A) has given a clear finding and we find ourselves in agreement with the same. The Assessing Officer has not based his order on any cogent reasoning. He has presumed that assessee s representative might have come earlier also before the actual arrival of the barge in the Indian waters. Such hypothesis cannot be sustained. The actual period of the two projects cannot be combined as they are unconnected works. In such situation, the Assessing Officer s view that the period of the two works should be combined cannot be sustained. This view is clearly supported by the Trib ..... X X X X Extracts X X X X X X X X Extracts X X X X
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