9911796707
TMI Blog2012 (8) TMI 746X X X X Extracts X X X X X X X X Extracts X X X X ..... e. On the same day, it entered into another contract with Grasim Industries Ltd for the supply of project service for erection and installation of the machinery supplied as against the first contract. The contract for supply of machinery has been fulfilled by 5.12.2009. According to the applicant, for payments received by it from Grasim thereunder, the liability under section 195 of the Act did not arise. 2. The fulfilment of the second contract on which now ruling is sought is to commence from March 2011. According to the applicant, for receipt by it of the consideration thereunder, the withholding provision under section 195 of the Act will have no application as what it renders under the contract, though technical services, is really se ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... consideration received thereunder will come within the exclusion contained in clause (a) of paragraph 6 of Article 12 of the Double Taxation Avoidance Convention (DTAC) between India and The Netherlands. The Revenue submits that the applicant and Grasim themselves have treated the two contracts as separate contracts and it is not now open to the applicant to plead that this was ancillary and subsidiary to the contract for supply. The contract was for supply, erection, commissioning, testing and delivery of a project. The contracts if treated as one would mean that the applicant is liable to pay tax on its income from the entire contract. The applicant asserts that there was no obligation under section 195 of the Act to withhold tax on the a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... This may be a case of an attempt to avoid the payment of taxes in India. 8. Be that as it may, now it is not open to the applicant to come up with a claim that the present contract is for services that are ancillary and subsidiary as well as inextricably and essentially linked to the sale of the property. The supply under the supply contract was completed on 5.12.2009. The work under the present contract is "expected to commence from March, 2011" when the present application was filed before this Authority in December 2010 or January, 2011. This is also showing lack of proximity. The Revenue argues that the supply contract itself was not for sale of property coming under the exception in paragraph 6 of Article 12 of DTAC. The first contra ..... X X X X Extracts X X X X X X X X Extracts X X X X
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