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TMI Blog2010 (1) TMI 633X X X X Extracts X X X X X X X X Extracts X X X X ..... cle 12 & 13 of the DTAA between India and Germany - Only in this assessment year, the assessee has changed his stand and now claiming that it should be treated as ‘business profit’ and as there is no P.E – As there is supporting evidence the ground taken by assessee is accordingly dismissed - ITA No.4496 & 4652/Mum/2005 - - - Dated:- 28-1-2010 - J. SUDHAKAR REDDY ACCOUNTANT MEMBER J. R.S. PADVEKAR JUDICIAL MEMBER J. Appellant by :S/Shri S.S. Rana/ Aarsi Prasad (DR) Respondent by :Shri Firoze B. Andhyarujina Order Per: R S Padvekar : These Cross Appeals, one by the Revenue and another by the assessee are directed against the order of the Ld CIT(A), Mumbai dt. 21.3.2005 for the A.Y. 2001-02. 2. We first take up t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... art up and commissioning is provided in India by deputing it s personnel in India. In the preceding years, the assessee has been offering the entire income as a royalty/fees for technical services and paying the tax at the rate of 10% as per Article 12 13 of DTAA between India and Germany. The assessee has declared the sum of Rs. 71,11,594/- as a receipts towards supervision during start up and commissioning. The A.O has also accepted the factual position that stay of assessee s personnel in India is only for 75 days or less in all the five projects going on during the previous year and thus, there is no PE in terms of Article 5(2)(i) of the DTAA between India and Germany. The A.O brought to tax the sum of Rs. 71,11,594/-. The assessee ca ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... upply of technical know how are chargeable to tax @ 19% under Article 12(2) of the DTAA and the amount received for supervision during start up and commissioning is not chargeable to tax as there is no PE of the assessee in India during the year under consideration. In the result, the appeal is partly allowed. 4. We have heard the parties. The A.O himself admitted that the stay of the personnel of the assessee company in India was less than 75 days and hence, it cannot be said that there was a P.E. in India. As per the new treaty, the income from supervisory activity like construction and installation of the project is to be treated as income of the P.E. provided that the said activity continues for a period exceeding six months as per ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lty/fees for technical services and also paying the tax at the rate of 10% as per the Article 12 13 of the DTAA between India and Germany. In the A.Y. 2001-02, the assessee took the contention that the income received from supply of engineering and documentation and supply of technical know are incidental to supply of plant and equipment which fall within the ambit of Article 7 of the DTAA between India and Germany and the same is to be treated as business profit and as the assessee has no P.E. in India, the said amounts are not liable to income-tax. The A.O did not accept the stand of the assessee and brought to tax the income on account of the above services/supply. The assessee challenged the impugned assessment order before the Ld C ..... X X X X Extracts X X X X X X X X Extracts X X X X
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