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TMI Blog2013 (11) TMI 126X X X X Extracts X X X X X X X X Extracts X X X X ..... n India. Calculating the total tax payable - the Assessing Officer calculated the tax payable after adding the income ignoring the fact that no refund was paid to the assessee. This matter can be rectified at the end of the Assessing Officer - The Assessing Officer would consider the issue of refund at his end de novo after giving a reasonable opportunity of being heard to the assesse – Decided in favour of assesse. - - - - - Dated:- 31-8-2012 - Order The order of the Bench was delivered by Chandramohan Garg (Judicial Member).-This appeal has been preferred by the assessee-company against the order of the Assessing Officer dated September 30, 2011, under section 143(3)/144C(13) of the Incometax Act, 1961 (hereinafter refer to as "the Act"), passed as per the directions of the learned Dispute Resolution Panel-II, (DRP) Delhi dated September 12, 2011 under section 144C(5) of the Act for the assessment year 2008-09. The assessee has raised following grounds in this appeal: "On the facts and in the circumstances of the case and in law, the learned Assessing Officer based on directions of the Dispute Resolution Panel ; 1. Erred in assessing total income at Rs. 1,45,23,1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ned Assessing Officer has erred in stating in the draft assessment order (copy enclosed as Exhibit 1) that the assessee's project has continued for more than one year and therefore the assessee also constitutes as installation permanent establishment in India. 1.3 Objection 3-Without prejudice to the argument that section 44BB of the Act applies. Based on the facts and in the circumstances of the case, the learned Commissioner of Income-tax (Appeals) has erred in and circumstances of the case and without prejudice to other objections, the learned Assessing Officer has erred in law and in fact, in not applying the provisions of section 44BB of the Income-tax Act while computing the taxable income in respect of the revenues received from services rendered by the assessee. 1.4 Objection 4-Taxability of the assessee's income as royalty. Based on the facts and in the circumstances of the case, the learned Assessing Officer has erred in law and in fact, in taxing the revenue from the contract with BG Exploration and Production India Ltd. ("BG") as royalty. 1.5 Objection 5-Treating of the assessee's income as fees for technical services ('FTS'). Based on the facts and in the circums ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... against the above impugned order. We have heard rival arguments of both the parties in the light of material on record before us. The learned authorised representative submitted that the Assessing Officer has erred in holding that the assessee did have a permanent establishment in India in accordance with article 5(2)(i) of the India-Mauritius Double Taxation Avoidance Agreement without considering the fact that the duration of the contract with British Gas company was less than nine months. He further submitted that the Assessing Officer also erred in assessing total income of the assessee at Rs. 1,45,23,18,561 as against nil returned income of the assessee and also in calculating the total tax payable after adding amount of Rs. 7,21,97,190 which was already paid by the assessee ignoring the fact that no refund was made to the assessee by the Revenue. The authorised representative also contended that the Assessing Officer also erred in levying interest under section 234B of the Act without appreciating the fact that the appellant is a non-resident assessee and its entire revenue receipts are subject to tax withholding in India under section 195 of the Act and the assessee is not l ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re Ltd. [1998] 66 ITD 296 (Mum) as the word used in the treaty at that point was 'in' and not 'through', therefore, it was held that a moving ship operating along with the fixed place of business did not constitute permanent establishment. In this connection, we are of the view that the words 'fixed place' do not represent a point in space but an area in space, which is available to the assessee for assembling the pipelines. Nonetheless, the work done by the assessee is of assembling the pipelines and the issue is regarding harmonious interpretation of paragraphs (1) and (2). In this situation, we tend to agree with the learned Authority for Advance Ruling that if we stop at paragraph (1), paragraph (2)(i) of the Double Taxation Avoidance Agreement becomes otiose. This would not be a proper way of construction of the Double Taxation Avoidance Agreement. The contracting parties included within the definition of the permanent establishment only those assembly projects which lasted for more than 9 months. This has been specifically provided in the treaty. This leads to an inference that if an assembly project lasts for less than nine months or nine months, there would be no inference ..... X X X X Extracts X X X X X X X X Extracts X X X X
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