TMI Blog2018 (12) TMI 1899X X X X Extracts X X X X X X X X Extracts X X X X ..... judicial decisions referred to herein above, we have no hesitation in setting aside the assessment order and accordingly we direct the AO not to treat the income of the assessee as taxable under the Act. - Decided against revenue. Non-granting of credit for tax deducted at source (TDS) as claimed in the revised return of income and non-computing of interest u/s 234B - HELD THAT:- Since these matters are factual and required verification on account of non-verification of the revised return of income as well as calculation of interest in accordance with law, therefore, we set aside the finding of the AO on these issues and restored of the matter afresh before the AO to decide the matter of controversy afresh by giving an opportunity of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the relevant documentary evidences brought to our notice in the light of judicial decisions relied upon by both sides. To begin with, let us first consider the relevant clauses of the service agreement between Singapore Branch of the assessee and Swiss Re-services India Pvt. Ltd. i.e. SRSIPL. 1.1.3 Forwarding routine communication from the Branch of SRZ to the Clients (other than contracts of re-insurance and confirmation of liability) after translating in local language, where required. 1.6 The Company hereby acknowledges and confirms that it is not the agent, broker or legal representative of the Branch of SRZ for any purposes whatsoever, and agrees that at no time shall it represent itself to be the agent or broker of the Branch o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... here is any business connection of the assessee in India. The answer lies in Explanation - 2 to section 9(1) of the Act. Section 9(1) -Explanation 2 For the removal of doubts, it is hereby declared that business connection shall include any business activity carried out through a person who, acting on behalf of the non-resident:- (a) has and habitually exercises in India, an authority to conclude contracts on behalf of the non-resident, unless his activities are limited to the purchase of goods or merchandise for the non- resident; or (b) has no such authority, but habitually maintains in India a stock of goods or merchandise from which he regularly delivers goods or merchandise on behalf of the non-resident; or (c) habitual ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... her than services as defined in Article 12, within a Contracting State by an enterprise through employees or toher personnel, but only if:- (i) activities of that nature continue within that State for a period or periods aggregating more than 90 days within any twelve month period; or (ii) the services are performed within that State for a related enterprise (within the meaning of paragraph 1 of Article 9) for a period or periods aggregating more than 30 days within any twelve -month period. 5.3Assuming that conditions of (i) (ii) mentioned herein above arefulfilled, we do not find that the employees of SRSIPL are providing services to the assessee as if they were the employees of the assessee. Therefore, condition laid down ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... case, assuming the services in question are not for the benefit of any third party, the latter enterprise does not itself perform any services to which the provision could apply. Also, the provision only applies to services that are performed in a State by a foreign enterprise. Whether or not the relevant services are furnished to a resident of the State does not matter; what matters is that the services are performed in the State through an individual present in that State. 5.5 Considering the services rendered by SRSIPL in the light of the OECD commentary, SRSIPL cannot be considered as PE of the assessee. The decision relied upon by Ld. DR do not support the Revenue on the facts of the present case, like in the case of Delhi Benc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the DTAA and the judicial decisions referred to herein above, we have no hesitation in setting aside the assessment order and accordingly we direct the AO not to treat the income of the assessee as taxable under the Act. With this Ground No.1, 2 and all its sub-grounds are allowed. 5. On appraisal of the above mentioned finding, it has already been established that the assessee is not having business connection in India in the light of Explanation-2 to Section 9(1) of the Act. The assessee does not have any PE in India. The facts on record show that there is no service PE in form of SRSIPL. Accordingly, it is held that the assessee was not having taxable income under the Act. By following the finding of the above mentioned case which i ..... X X X X Extracts X X X X X X X X Extracts X X X X
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