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TMI Blog2013 (2) TMI 457X X X X Extracts X X X X X X X X Extracts X X X X ..... shment such site or project should continue for a period of more than six months. Such site or project, is provided under article 5(2) of the treaty. Since contract was for less than six months, it becomes absolutely clear that the assessee did not have a permanent establishment in India as per article 5(3) of the treaty - Article 5(3) provides a specific provision which covers the provision of article 5(2) of the treaty – Specific provision would prevail over the general provision - No permanent establishment was constituted by the assessee in India during the assessment year in question - No part of the Revenue earned by the assessee was taxable in India – In favour of assessee. - ITA NO 34/07 - - - Dated:- 14-11-2011 - TARUN AGAR ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ishment in India as defined under article 5 of the Double Taxation Avoidance Agreement between India and Netherlands. It was claimed that in view of clause (3) of article 5 of the treaty, a building site or construction, installation or assembly project constituted a permanent establishment only where such project conti-nue for a period of more than six months. It was claimed that the dredging activity was covered under article 5(3) of the treaty and the activity in India, under the said contract, did not exceed more than six months, as such, the appellant did not have a permanent establishment in India and, therefore, no portion of its income was chargeable in India. 4. Subsequently, notice under section 148 of the Act was issued to the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessee existed for the year under consideration and that the entire duration of the contract did not exceed six months period and, consequently, no permanent establishment was created. 6. The Commissioner of Income-tax (Appeals) not only relied upon the order of the Income-tax Appellate Tribunal for the assessment year 1995-96 but also analysed the provision of the treaty and concluded that the entire duration of the contract was less than six months and, as such, no permanent establishment was constituted in India and that the provision of article 5(2) of the treaty, being a general provision, would not apply in view of the specific provision being provided under article 5(3) of the treaty which pro-vided for the existence of a perma ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssioner of Income-tax (Appeals) as well as the Tribunal committed an error in holding that no permanent establishment is existed in India in view of the provision of article 5(2) of the treaty and that the Tribunal committed an error in not considering this provision and relying upon the provision of article 5(3) of the treaty. On the other hand, the learned counsel for the assessee submitted that the findings of the Commissioner of Income-tax (Appeals) as well as of the Tribunal are based on the findings of fact which cannot be interfered in the present appeal and that no substantial question of law arises for con-sideration. 9. In order to appreciate the submission of the learned counsel for the parties, it would be appropriate to extr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , a warehouse in relation to a person providing storage facilities for others, a premises used as a sales outlet, an installation or structure used for exploration of natural resources provided that the acti-vities continue for more than 183 days. Article 5(3) provides that a building site or construction, installation or assembly project constitutes a perma-nent establishment only where such site or project continues for a period of more than six months. 11. In the light of the aforesaid provisions, the learned counsel for the asses-see submitted that the assessee had a permanent establishment under the provision of article 5(2) and had an office at Bombay and, consequently, had a permanent establishment which has not been considered by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... urt is of the opinion that no permanent establishment was constituted by the assessee in India during the assessment year in question. 13. Further, the court finds from a reading of the order of the Tribunal that the counsel for the Revenue also agreed that the controversy involved was squarely covered by the decision of the Tribunal in the assessee's own case for the assessment year 1995-96. Once this fact has been admitted and agreed by the learned counsel for the Revenue, it was no longer open to the Revenue to file the appeal before this court. 14. In the light of the aforesaid, we are of the opinion that the assessee did not have any permanent establishment in India within the meaning of article 5 of the Double Taxation Avoidance ..... X X X X Extracts X X X X X X X X Extracts X X X X
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