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TMI Blog2013 (7) TMI 586X X X X Extracts X X X X X X X X Extracts X X X X ..... al for the receipt and storage of liquefied natural gas at Kochi, Kerala. The Consortium Agreement was executed on 06-03-2009. Petronet awarded the contract for the project to the consortium which was amended and reinstated on 17-11-2009. Under the contract, the consortium members are to undertake the designing, engineering, procurement of equipment, material supplies to erect, construct, test and commission and turn over the facilities for the storage and regasification of liquefied natural gas to Petronet. 4. As per the terms of the contract, applicant is responsible for offshore supplies, offshore services and mandatory spares (for offshore supplies). CINDA is responsible for onshore supplies, onshore services, construction and erection and machinery spares (for onshore supplies). 5. It is in the context of these contracts that the applicant approached this Authority for an advance ruling. While admitting the application under Section 245R(2) of the Income-tax Act 1961 (in short the Act), this Authority framed the following questions for a ruling:- (i) Whether on the facts and circumstances of the case, the income received/receivable by the Applicant ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d by the applicant on offshore supplies from Petronet. What we find is that no payment is made to the applicant. The payment is made in the bank in Taiwan on the basis of bill submitted by the Supplier (Holding Company) and not by the applicant. There is a difficulty in answering the question in the absence of information that the supplies were arranged through the holding company and that payment made is for supplies by the applicant. The applicant was called upon to clarify this aspect. Learned counsel submitted that for the purposes of custom clearance and preparation of documents, etc. the services of AFL Dacher Pvt. Ltd. (AFL), Cochin, were obtained. AFL inadvertently mentioned the name of CTCI Overseas Corporation Ltd. Taiwan instead of CTCI overseas Corporation Ltd. Hong Kong as supplier while filling in the import declaration. This was examined found correct by the custom authority. Regarding the name of the bank to which the payment has been remitted by Petronet, it is submitted that the applicant has maintained a bank account in Calyon Taipei Branch (Now CREDIT AGRICOLE CORPORATE AND INVESTMENT BANK) as per the certificate from the said bank. Further a certificate from P ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... conclusion to the ruling should have been that the transaction of offshore supplies which was part of the contract undertaken by the consortium, had to be considered on the basis that it was an activity carried on by the consortium. I am therefore satisfied that the ruling of this Authority to the effect that the offshore supplies is not liable to tax in India is a ruling inconsistent with the finding that the assessing unit is an AOP. To that extent, the mistake is apparent and it requires to be corrected and can be corrected by exercise of power under Rule 19 of the Rules. I therefore, allow the application filed by the Revenue to the extent of reopening that part of the ruling which rules that the amount received/receivable from the applicant from the offshore supplies in terms of the contract dated 17-11-2009 is not liable to tax in India under the provisions of the Act in view of the decision of the Supreme Court in IHHI. I post the main application for a fresh hearing on the question whether an AOP found to have come into existence is liable to be assessed on the said income. The main application will be posted for hearing on that question alone afr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ating to the application under Rule 19 of the Procedure Rules, the Authority should not deal with that issue. 16. In order to consider the substance in the rival submissions it would be appropriate to deal with the jurisdiction of the Authority while dealing with an application under section 245N which reads as follows: 245N [(a) "Advance ruling" means - (i) a determination by the Authority in relation to a transaction which has been undertaken or is proposed to be undertaken by a non-resident applicant; or (ii) a determination by the Authority in relation to [the tax liability of a non-resident arising out of] a transaction which has been undertaken or is proposed to be undertaken by a resident applicant with [such non-resident],and such determination shall include the determination any question of law or of fact specified in the application; (iii) a determination or decision by the Authority in respect of an issue relating to computation of total income which is pending before any income-tax authority or the Appellate Tribunal and such determination or decision shall include t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nceptually different from the questions which were framed for adjudication and originally decided). While dealing with an application under Rule 19 it is not permissible to re-frame the questions or issues already framed and/or to add further questions. That being after the decision is rendered so, we do not find it necessary or permissible to decide the issues as to the raised by the Revenue for the first time in its application under Rule 19. 19. Even otherwise, though the Authority in its order while dealing with the application under Rule 19 has directed reconsideration of some issues we are of the view that it is not legally permissible to decide new questions which were not originally formulated or adjudicated. That would virtually mean reopening of host of issues in the manner suggested which cannot be decided in view of the jurisdictional limitations inbuilt in section 245N. Even on merits, it needs no reiteration that the Authority has jurisdiction to make a determination only in relation to the transaction which has been undertaken or proposed to be undertaken by non-resident applicant. It is not permissible to deal with hypothetical questions. By way of illustration it ..... X X X X Extracts X X X X X X X X Extracts X X X X
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