9911796707
TMI Blog2018 (1) TMI 946X X X X Extracts X X X X X X X X Extracts X X X X ..... he year 2009-10, it started taking steps to set up a factory for production of Bus and Truck tyres and also a manufacturing facility for mixtures and semi-finished products necessary for the production of tyres. For this purpose it entered into an Umbrella Agreement as an "Equipment Purchase Contract" on 1 April 2011 with M/s. Manufacture Francaise des Pneumatiques Michelin (MFPM), a closely associated group company, for design, engineering, manufacturing, inspection and packing, forwarding and dispatch from outside India of machinery and equipment for setting up its new manufacturing facility in India. MFPM is a company incorporated under the laws of France and is a tax resident of France. MFPM has extensive experience in facilitating the development of projects of establishment and extension of factories related to the activities of production of tyres and manufacture of mixtures. 2.1 Under the aforesaidUmbrella Agreement, MFPM wouldsupply the equipment in three phases. As regards Phase I, the total price for the equipment is stated as EURO9,31,90,452 (approx. INR 580 cr) and the purchase of the same was completed upto February 2013. Further, supply of equipment under Phase II a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pment shall be done by the Applicant or through its contractors and MFPM would only provide required supervisory guidance. LOU 3 - dated 30 September 2011 - MFPM will obtain transit insurance policy for supply of plant and equipment till the port of Chennai on behalf of the Applicant which will be reimbursed by the Applicant and also the risk and rewards are transferred to the Applicant at the port of shipment. LOU 4 - dated 14 December 2012 -It was clarified that the scope of the Agreement strictly excluded installation services, which will be provided under a separate agreement and that too the scope of such services will be restricted to supervisory in nature. The supervision charges as mentioned Schedule - I to the Agreement are in relation to design and manufacture of the equipment prior to importation i.e. outside India and such charges are included as part of the cost of equipment and would be borne by MFPM. 4.2 On conjoint reading of the terms of the Umbrella Agreement and LOUs as mentioned above, it is clear that the supply of equipment is a pure off-shore contract for which supply is completed outside India, which is elaborated as under: 4.2.1 Transfer of title in pro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at MTTPL shall be responsible for obtaining any import license or carrying out all custom formalities for the import of equipment and its transit through another country. All the custom duties, tariffs, fees, taxes and the charges imposed and levied at the port of importation shall be borne by the Applicant. 4.2.5 Insurance Schedule 1 of the Umbrella Agreement specifically states that the price of the Equipment will be increased by transport, insurance and packing cost until the Port of Chennai. MFPM has obtained transit insurance policy for supply of plant and equipment till the port of Chennai on behalf of MITTPL and also the risk and rewards are transferred to MITTPL at the port of shipment. 4.3 Installation of equipment after importation by MITTPL Under the Umbrella Agreement, majority of the equipment were imported in FY 2011-12 and FY 2012-13 wherein payment amounting to Rs. 343.25 crore and Rs. 199.78 crore respectively were made and in later years emergency spare parts and stand-by equipment were purchased for small amounts. Thereafter, the Applicant entered into installation contracts with external contractors.15 third party external contractors were engaged for instal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... payments made by the Applicant to MFPM as per the agreement included supervisory charges for successful installation and implementation of equipments in India. Hence, it is submitted that the entire amount payable by it to MFPM directly or indirectly includes payment for the supervisory services rendered by MFPM in India and hence as these services have been rendered and utilized in India are as such taxable in India. 5.3 Regarding the Applicant's contention that installation and commissioning of the machinery purchased has been carried on by it by employing local Indian contractors and by foreign nationals, who were employed by the Applicant on long-term basis, Revenue submits that the "local Indian contractors", would have at best only assisted MFPM, the supplier of the machinery, in installing and commissioning of the machinery so supplied by it. These local contractors would have been used for moving of machinery from the "Port of Chennai" to the factory site, for construction of complicated civil works, sophisticated electrical works, etc., so as to facilitate the installation of the machinery by providing Cranes etc., which was carried on as per plan prepared by MFPM, since ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the taxability of payments made by Michelin Global Mobility (hereinafter MGM) outside India, towards the expatriate personnel supplied by MGM and employed by MITTPL. The very nature of the composite contract referred here in this report is much larger in the scope, and cannot be confined to the employment of 79 expats alone, who are stated to have been paid just small sum of Rs. 9.95crore for the Financial Year 2014-15. 5.8 Revenue submits that in this context, the details of sums paid by MITTPL to MFPM, (except purchase of raw material and capital goods as reflected in Form 3CEB) are as under: Asst. Year Description of the services availed Amount(Rs.) 2011-12 Feasibility study 5,52,68,300 2011-12 Training of personnel 2,41,294 2012-13 Reimbursement of expenditure: Social security contribution, travel and other costs 11,41,582 2013-14 Training of personnel 77,83,395 2013-14 Admn. services 2,01,23,217 2013-14 Reimbursement of expenditure 13,87,136 2013-14 Trade payable 15,33,03,826 2014-15 Training of personnel 47,42,871 2014-15 Admn. Services 42,24,21,557 2014-15 Reimbursement of expenditure 1,79,36,811 2014-15 Trade payable 79,33,37,633 Fr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... m is a service provider. The recital itself says that: "And whereas the supplier is engaged in the business of manufacturing and supplying machineries and equipment. And whereas the service provider engaged in the business of providing service for manufacturing and installation." The total payment made to Satnam Global Group is Rs. 7.86 crore, out of which Rs. 1.25 crore is for installation of machinery supplied by it and the balance is for the cost of machinery supplied to MITTPL. Thus Satnam Global had supplied the machinery manufactured by it and the same was installed by Industeam, and they were not engaged in installation of MFPM machinery. 5.11.2 Similarly, agreement with Webb India says: "this equipment and machinery purchase and installation agreement is executed......." Here also MITTPL is the customer, Webb India is the supplier and Webb Technology is the confirming party. The recital says: "And whereas the supplier is engaged in the business of manufacturing and supplying of conveyors and automated storage and retrieval system machineries and equipment". The total payment to Webb India was Rs. 11.92 crore and it was not for installation of machineries supplied by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s were relied upon: ABC, dated 28.03.2012 [2012] 20 Taxmann.com 152; LindeAG, dated 20.03.2012 [2012] 19 Taxmann .com 238; Roxar Maximum Reservoir Performance WLL, dated 07.05.2012, [2012] 21 taxmann.com 128; and Alstom Transport SA, dated 07.06.2012 [2012] 22 taxmann.com 304. 5.14.1 In all these case laws relied upon by the Revenue, the following findings are stated to have been given: (a) A contract has to be read as a whole, and the purpose for which the contract is entered into by the parties is to be ascertained from the terms of the contract. (b) If the purpose of the contract is for installation / set-up of a factory, the same composite contract cannot be artificially dissected into a contract for supply of machinery separately; and the balance erection. (c) The object of the contract so entered is an indivisible contract and hence cannot be separated for the purpose of taxation. (d) It is not open to the Non-Resident Company to plead that the said composite contract is divisible and sale of machinery and designing of project and equipment must be treated as off-shore transactions.(e) When a tender is floated for erection and commissioning of a plant, generally, the bid is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ntities, each with distinct responsibilities to execute various parts of turnkey project. Here, MFPM is the only closely associated company which has setup a factory in India. In that case, the various components (such as offshore and onshore supply of materials and services) of the project were distinctly brought in the main contract along with price components specified thereon. But in this case, the various agreements for onshore and offshore have been entered at various stages and the price components have not been spelt out in the umbrella agreement. Further, in this case the contract price has not been split into offshore and onshore activities in the Umbrella Agreement. Moreover, this is a transaction between two companies which are closely connected and directed by the interest of the ultimate holding Company CGEM. Hence for these reasons the entire contract may be looked into as a whole. The contract so entered was for design, manufacture, supply of machinery required for setting up of the said factory and later on for successful installation and commissioning and thereafter to assist MITTPL in extension of factories in future, ie. both for offshore supplies and onshore se ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s to be seen. Michelin Group's intention is to establish a manufacturing facility for its subsidiary MITTPL, and not merely supply of machinery, and MFPM is actively involved in establishing the manufacturing facility right from the feasibility study in FY 2010-11. The supply of machinery by MFPM is only one part of the various stages and has to be seen as a whole. The Revenue relies upon the case of MERO Asia Pacific Private Limited as decided by this authority in AAR No.981 of 2010 on this issue. 6. The Applicant, represented by MrRajanVora, FCA, has vehemently argued and submitted that the contentions of the Department are without any reasonable basis or analysis, and are based on assumptions and surmises without any supporting documents. 6.1 At the outset, the Applicant reiterates that it has entered into two agreements with Michelin France, namely: (a) Umbrella Agreement dated 1 April 2011 for design, engineering, manufacturing and supply of machinery and equipment from outside India; and (b) Services agreement, dated 1 February 2013 in relation to supervision of installation services rendered by different external suppliers and to coordinate the start-up and ramp-up ser ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... MFPM would only provide required guidance for successful installation and implementation of the equipment. 6.3.2 In this regard, it is submitted that, under the aforesaid Umbrella Agreement, majority of the equipment were purchased under Phase 1 during the period April 2011 to February 2013. As per the said Umbrella Agreement, the total value of the machinery and equipment under Phase 1 was EURO 9,31,90,452 (approx. INR 580 crore). The details of payments made for the purchase of equipment as reflected in the Related Party Schedule of the financial statements of Michelin India are tabulated as under: Particulars Year ended 31.03.2012 Year ended 31.03.2013 Year ended 31.03.2014* Year ended 31.03.2015* Payments made for purchase of equipment Rs. 343.25 crore Rs. 199.78 crore Rs. 25.62 crore Rs. 12.46 crore * For the year ended 31 March 2014 and 2015, the above amounts reflect the payments made towards purchase of emergency spare parts for installation, stand by equipment, and moulds for production of tyres. 6.4 As regards its second agreement, the Services agreement, the relevant extracts are as under: "Recitals B. In order to supervise the installati ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Act. 6.5.2 It is submitted that the equipment as imported under the Umbrella agreement and the expenses incurred for installation of the equipment were reflected as capital work in progress in the financial statements of the Applicant. The fixed assets as reflected in the financial statements of the Applicants are as under: Particulars Year ended 31.03.2011 Year ended 31.03.2012 Year ended 31.03.2013 Year ended 31.03.2014 Tangible Assets 6.07 crore 27.88 crore 27.85 crore 798.39 crore Intangible Assets 79.20 crore 86.79 crore 86.96 crore 2.58 crore Capital work in progress - Construction in progress 28.69 crore 714.6 crore 1,405.49 crore 1,312.75 crore - Expenditure capitalized 14.22 crore 55.41 crore 116.21 crore 151.40 crore Fixed Assets 128.20 crore 884.67 crore 1,636.51 crore 2,265.12 crore It is stated that the Revenue has erred in considering the figures of Plant and Machinery as appearing in tangible assets instead of considering figures of capital work in progress forming a part of fixed assets schedule. 6.5.3 Further, the company has completed setting up the first phase of the manufacturing facility and started its commercial prod ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... this Contract to a third party..." 6.6.2 The Applicant submits that MFPM would draw up the price of these equipment on the following basis: "Schedule 1 - Price Computation Cost incurred by MFPM towards third party suppliers comprising of (a) the full engineering costs (design, project steering, etc., including the related transport costs); and (b) Full projection and external purchase costs of the equipment Cost incurred by MFPM as increased by appropriate coefficients determined on an arm's length basis accounting for, but not limited to, the following as may be applicable; 1. The specific administrative costs for MFPM related to the production and the same of the equipment; 2. Design services performed by MFPM; 3. Production of equipment by MFPM; 4. Sub-contracted design services and production of equipment (including travel) taking into account specific administration costs for MFPM; 5. Supervision charges (salaries charged, daily allowances, personnel transport costs, hotel accommodation and ancillary costs) and 6. Short term financing costs." 6.6.3 The Department is misguided by the fact that in the AAR Application it is mentioned that Price incl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... view of the above volume and size of the project, the overall activity of setting up and installation of the factory of such large magnitude could not have been completed by only 33 technicians. 6.7.1 The Department has erroneously assumed that the aforesaid local contractors and the employees of the Applicant, 'would have at best only assisted Michelin France, the supplier of machinery in installing and commissioning of the machinery so supplied by it and that the role played by the Indian employees of the Applicant company may not be so crucial'. This assumption has no basis, and MFPM did not have any role in installation of the equipment or machinery under the Agreement dated 1 April 2011. 6.7.2 Further, on the other hand, the fact that such a huge sum of Rs. 131.58 crore was paid by the Applicant to the local contractors is sufficient evidence of the crucial role played by such contractors in the installation of the equipment purchased by Michelin India from Michelin France. 6.7.3 On perusal of the said details and documents, it is evident that the said contractors have requisite expertise, experience and capacity to design the machinery and equipment, and manufacture and i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... said transactions of purchase of equipment from MFPM were part of the Transfer Pricing report in Form 3CEB and were subjected to scrutiny before the Transfer Pricing Officer ('TPO')/ Assessing Officer ('AO'), wherein, after considering various aspects and documentation, the learned TPO/ AO have accepted the said transaction to be at arm's length and hence an independent transaction between two related parties. 6.10 Regarding Revenue's contention that MFPM had a business connection in India, in terms of Section 9(1)(i) of the Act, and liable to be taxed in view of the Supreme Court's decision in the case of CIT v. R.D. Aggarwal& Co. (56 ITR 20), it is submitted that Explanation 1 to section 9 of the Act, inter alia, however clarifies, that in case of such business of which all the operations are not carried out in India only such part of income shall be deemed to accrue or arise in India as is reasonably attributable to the operations of the business carried out in India. 6.10.1 Since all parts of the transaction in question i.e. the transfer of property in goods as well as the payment, were carried out outside the Indian soil, the transaction could not be taxed in India. Also, th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the income from supply of equipment, materials and spares supplied offshore is not taxable in India. 6.11.3 Without prejudice, even if it is assumed that MFPM had a permanent establishment in India for carrying out its operations i.e. of supervision of installation, then also, only income that is attributable to such supervision services could be considered for the purpose of taxation and that since payment for supervision charges received by MFPM has already borne tax in India (by way of TDS), nothing is further taxable in India. However, in respect of supply of plant and equipment, in no case, PE can be said to have any role in supply of plant and equipment outside India as supply of equipment was completed before the Services agreement in February 2013. 6.12 The Protocol to the India-France DTAA further supports the position that no portion of the income relating to off-shore supply of equipment is taxable in India even if MFPM establishes any kind of PE in India. The relevant portions of the protocol are reproduced as under: "Especially, in the case of contracts for the survey, supply, installation or construction of industrial, commercial or scientific equipment or premis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n India, and hence the off-shore supply of equipment by MFPM to Michelin India shall not be taxable in India. 6.15 Reliance is placed on the ruling of this Authority in the case of Hyosung Corporation [2009] (314 ITR 343)(AAR), to say that in the event the sale took place outside the territory of India, the income arising out of such sale cannot be said to have accrued or arisen in India. Again, on similar facts, case of LG Cable Ltd. (237 CTR 438) (Delhi), which has approved the decision of Delhi Tribunal in the case of LG Cable Ltd. v. DDIT [(2008) 113 ITD 113 (Del.-ITAT)], has been cited in support. 6.15.1 In the Linde AG case, where the AAR held that the contract was an indivisible contract and was incapable of being split up into different components/ parts, relying on the ruling of the Hon'ble Supreme Court in the case of Ishikawajma (supra), the Hon'ble High Court reversed this Ruling, holding that it cannot be concluded that the Contract provides a business connection in India and accordingly, the Offshore Supplies cannot be brought to tax under the Act. 6.15.2 It is submitted that the principles laid down by the Supreme Court in the case of Ishikawajma (supra) and Delhi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion stage while the entire turnkey project including the sale of equipment is finalized before the installation stage. The setting up of the PE in such a case is a state subsequent to the conclusion of the contract. It is as a result of sale of equipment that installation PE comes into existence. Reliance in this regards is placed on the Supreme Court decision in case of Hyundai Heavy Industries Co Ltd 210 CTR 178. 6.17 With regard to Revenue's mention of the feasibility report in FY 2010-11 for which a payment of Rs. 5.52 crore has been made, and creation of a PE since then, the Applicant states that MFPM's help was taken as it had extensive experience in facilitating the development of such projects. However, this was done by MFPM even before execution of the Umbrella Agreement for supply of equipment from outside India. Even this transaction was subjected to scrutiny before the learned TPO/AO wherein the TPO/AO have accepted this transaction to be at arm's length, independent of purchase of equipment from MFPM under the Umbrella Agreement. Hence, the statement of the Revenue that MFPM is solely and actively involved in establishing the manufacturing facility in India right from ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the custom duties and other charges levied at the port of importation were borne by Michelin India. Further, MFPM obtained transit insurance policy for supply of equipment till the port of Chennai on behalf of Michelin India, and also the risk and rewards were transferred to Michelin India at the port of shipment. We do not consider it necessary to discuss here the further details appearing in these documents, as these are not so much in dispute, and it was clearly an offshore equipment supply contract. 7.3.1 The Transfer Pricing Officer (TPO) has accepted that the payment for such import of equipment from MFPM is at arm's length in the Transfer Pricing assessments for the year ended on 31 March 2012, 31 March 2013 and 31 March 2014, when such transactions were before him. This is clearly indicative that the price paid is only for the equipment, and cost and services related to such manufacture, prior to shipment, and is not for installation or any services post shipment or other than those covered by the Umbrella Agreement, as alleged by the Revenue. 7.4 The second agreement is the Service Agreement, which as per its terms, was to supervise the installation services at the facto ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Rs. 131.58 crore, after the equipment was received in India, we fail to understand on what basis Revenue submits that the "local Indian contractors would have at best only assisted MFPM in installing the machinery..... and would have been used for moving of machinery from the port to the factory, for construction of complicated civil works, sophisticated electrical works.......since they did not have the requisite skills". A close look shows that there is a clear link between the agreements entered into with the third party contractors, the services provided, items purchased from MFPM and those installed by these third party contractors. 7.5.3 For example, in the contract with these parties, such as with Satnam Global Infraprojects Ltd. and Webb India Pvt. Ltd., it is seen that they are in the business of manufacturing and supplying machineries and equipment, have been identified to manufacture, supply and install the same, through a service provider/confirming party or directly. The service provider shall be responsible for installing the machinery and equipment at the factory of the Applicant as per its lay out plan, and shall also provide technical training to the Applicant's ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o say that the local contractors did not possess the requisite skills for carrying out installation work. There was a mix of third parties that were suppliers also, and some were only into installation work. 7.5.7 As regards the qualifications of the 169 Indian employees and 79 Expats involvement in installation and commissioning, Revenue's questioning their competence is rather sweeping. Such evaluation can only be done by a technical person at the factory. Most of the personnel are Engineers, and the rest are mostly Managers. The expats employed by the Applicant on a long term basis are mostly Engineers, technical persons, maintenance personnel, quality managers etc. who have been employed from inception to assist in the installation stage and later in production, as stated by the Applicant. They are specialists drawn from different countries, such as from UK, USA, Italy, Netherlands, Germany, Romania, Canada, France, Poland, Hungary, Spain etc.We do not find any material brought on record to suggest that all these technical people did not do installation work or that they were not qualified enough. Only a broad assumption has been drawn by the Revenue, which appears not to be a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for on shore services. There is no material to suggest that MFPM had dealt with the Applicant on a turnkey basis, for supply, installation, commissioning and supervision of the setting up of the plant in India, as argued by the Revenue. Also, the two had transacted on a principal to principal basis, as found by the TPO while assessing the payments for purchase of equipment, and it cannot be said that merely because the Applicant and MFPM were closely associated or under the ultimate holding company, they had colluded to transact in a manner that was akin to tax avoidance or that this automatically created a PE in India. For this reason, the citing of the Vodafone case by the Revenue looks out of place in the instant case, as the overall transaction was not designed for tax avoidance, but for genuine business of setting up a plant for manufacture of tyres, with the help of MFPM and other third parties who are genuine, and should be 'looked at' from that point of view. 7.6.1 Again, the entire flow of business shows that off shore supply of equipment and onshore services of supervision have been provided by MFPM, whereas installation of equipment is done by unconnected third parties ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of blurred connecting points in the chain of events, overlapping arrangements, unclear terms and obligations, intermixed pricing, or unsegmented continuity etc., being some of the illustrative examples, the need to treat the entire arrangement of multiple contracts as composite may become necessary. That is, even if there are fewer parties and fewer segments, if the income generating events are not crystal clear, we may have to treat the entire contract as composite for the different segments. Or, also if the case is one which is designed for tax avoidance, it may be needed to look through the whole arrangement. 7.8.1 We have considered the cases cited by both the Applicant and Revenue. We find that some of the cases of the AAR cited by the Revenue, are overruled by virtue of the decision of the Hon'ble Supreme Court in the case of Ishikawajima Harima, which has been followed by most of our Rulings subsequent to this decision, especially on the issue of taxability of offshore contracts, and the Hon'ble Delhi High Court in the case of Linde AG (supra), which overruled the AAR Ruling in this very case. The Revenue has taken support from the cases of MERO Asia Pacific Pte Ltd., AAR 9 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... crore for the off shore supply of equipment under the Umbrella Agreement. There is no way that it can be contended that since MFPM had a role in the supervision of setting up the same, the transfer of the property extended beyond the shores of France such as to have income arisen or accrued in India. The point at which the property is passed to the Applicant, on the shore of the supplier country, the taxable event in respect of such supply of equipment is over, there itself. Business connection through supervision on the Indian premises later has no connection with this supply, and there is no justification to mix up the considerations received by MFPM from its offshore supplies and onshore services, as held by the Hon'ble Delhi High Court in the case of LG Cable. In the instant case, there is no such point of contact in these two acts of supply and services that make it difficult for us to set apart the non taxable and taxable events, ie. Offshore supply, onshore supply and installation and on shore supervision, each being clearly demarcated. We had similarly held in L S Cable Ltd. that when the prices for the equipment were clearly specified, as in the instant case, it can be wel ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ealt with. Prices in each of the segment are also different. The very fact that in the contract, the supply segment and the service segment have been specified in different parts of the contract is a pointer to show that the liability of the applicant thereunder would also be different. The contract indisputably was executed in India. By entering into a contract in India although parts thereof will have to be carried out outside India would not make the entire income derived by the contractor to be taxable in India........" 7.9.2 At para 99 of the above decision of the Hon'ble Supreme Court, it was finally held that: only such part of the income, as is attributable to the operations carried out in India can be taxed in India; if the transfer of property in goods as well as the payment, were carried on outside the Indian soil, the transaction could not have been taxed in India; the principle of apportionment, wherein the territorial jurisdiction of a particular State determines its capacity to tax an event, has to be followed; the fact that the contract was signed in India is of no material consequence, since all activities in connection with the offshore supply were outside ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... provision, we have to hold that income derived from the discharging of its obligations by MFPM, namely provision of services of supervision in India at the factory site where the plant has been set up, is chargeable to tax in India as the income arising therefrom can be said to have arisen or accrued in India. There is a direct and real nexus between the terms of the contract, the activities of supervision undertaken at the site, and hence the income earned in India through the provision of the services and would be covered by section 9, as a business connection clearly exists between these supervisory services and the business of MFPM of assisting in setting up of manufacturing units in the field of bus and truck tyres. In fact, a service PE is also formed since the MFPM is carrying on its supervisory activities through its personnel at the fixed place,that is the factory premises, and this income can be fastened to this PE. Hence, the payments made by the applicant to MFPM's 33 supervisory staff and engineers, amounting to Rs. 9.95 crore, would be chargeable to tax in India, and would also attract the provisions of section 195 of the Act. 8. In conclusion, the questions referred ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
