9911796707
TMI Blog2011 (2) TMI 119X X X X Extracts X X X X X X X X Extracts X X X X ..... a foreign company registered under the laws of Japan and is also its tax resident. This is a subsidiary company of M/s Toshiba Corporation, Japan which holds 61.61% of shares. It is an engineering, procurement and construction company. This company has been active in the development of power projects in the international scene for the last sixty six years and has executed projects in other industry sectors of Iron & steel, paper, environment & public facilities, transportation, airport, communication, cogeneration, building and office automations. 1.1 Costal Gujarat Power Limited (CGPL), a Tata power group company is an Indian company. The Ministry of Power, Government of India have awarded the Mundra UMP project to CGPL for commis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... course of the execution of the contract deploy additional expats and workforce, if required. It is contemplated to engage the services of a related party/third party for supply of labour for executing the work under the contract with CGPL. 2. In the light of the above facts, the applicant desires to know its taxability on the consideration received from the CGPL for execution of the contract and submits the following questions to this Authority for Rulings in its application:- 1. Whether on the stated facts and in law, the consideration received by the Applicant for the steam turbine, turbo generator erection of auxiliaries, other equipments including associated electrical, instrumentation and pre-commissioning work for the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nection with the Turnkey Power Project approved by the Central Government and, therefore, the consideration received in the execution of the contract attracts section 44BBB of the Income Tax Act, 3.1 Coming to the second question, it is submitted by him that the applicant has not employed any labourers. The foreign expats have come and the work was carried on by them. The sub-contractor's labourers did the work. The services of the Indian entities are taken. Despite these, the overall responsibility for erection of steam turbine, turbo generator and auxiliaries, other equipments including associated electrical, instrumentation and Pre-commissioning work for the five units of 800 MW each of Mundra UMP Project would remain with the ap ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... consideration, erection and recommissioning consideration and other services consideration taken together. In respect to this, the learned Counsel for the applicant argued that both are different contracts and are independent of each other. The considerations are also paid separately. Further the learned Counsel submits that as per the response of the Revenue dated 12.8.2010, it is mentioned therein that prima facie, the contract appears to be independent of each other. However, the Revenue does not dispute the application of section 44BBB of the IT Act so far as the question No.1 is concerned on the facts as now disclosed by the applicant. 4.2 The learned Departmental representative while submitting its response to question No.2 st ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of labour in executing the work. In this case, if the services include mobilization of required skilled labour for working in the project in coordination with the applicant, and under overall control of the applicant, the arrangement would not disturb the applicability conditions of Sec 44BBB of the IT Act. Therefore, in this second situation, the applicant would be entitled for the presumptive taxation under the scheme of sec 44BBB of the IT Act, subject to the same conditions. The learned Departmental representative further informed that based on examination of the documents/information filed before the Hon'ble AAR, prima facie it appears that the Applicant is satisfying all the conditions laid down in section 44BBB of the I.T. Act and wo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 44BBB of the IT Act: 44BBB. Special provision for computing profits and gains of foreign companies engaged in the business of civil construction, etc., in certain turnkey power projects. (1) Notwithstanding anything to the contrary contained in sections 28 to 44AA, in the case of an assessee, being a foreign company, engaged in the business of civil construction or the business of erection of plant or machinery or testing or commissioning thereof, in connection with a turnkey power project approved by the Central Government in this behalf and financed under any international aid programme, a sum equal to ten per cent. of the amount paid or payable (whether in or out of India) to the said assessee or to any person on his behalf on ac ..... X X X X Extracts X X X X X X X X Extracts X X X X
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