9911796707
TMI Blog1996 (2) TMI 561X X X X Extracts X X X X X X X X Extracts X X X X ..... r relevant records, are as follows : During the previous year ending on 31-3-1995, the applicant entered into the following two contracts with ABC for providing services related to burial of pipelines offshore India : (i) X Pipeline project, and (ii) Y trunk pipeline project. The scope of work in these contracts included burial of pipelines both onshore and offshore India and involved the following activities : mobilisation and demobilisation; pre-trenching survey; installation of pipeline crossings, pipe supports and free-span rectification works; subsea welding; installation of submarine cables; pipeline pigging, testing and drying. (b) The job executed by the applicant was in the nature of turnkey su ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... question has been raised before the Authority: The taxability [in terms of article 5 of the agreement for avoidance of double taxation concluded between India and Singapore on January 20, 1994] of revenues earned by the applicant, a tax resident of Singapore, from the contracts entered into with ABC during the previous year ended on March 31, 1995. 4. Since any answers to the questions raised by the applicant will involve consideration of the relevant articles of the DTA, they may be set out insofar as they are relevant. Article-5 (1) For the purposes of this Agreement, the term 'permanent establishment' means a fixed place of business through which the business of the enterprise is wholly or partly carried on. ( ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... provisions of the Act, because by now it is a settled law. The department also has not raised any objection against this contention of the applicant. Therefore, it is to be considered whether the income of the applicant earned from the contracts mentioned earlier is taxable or not as per the provisions of the DTA. For this purpose it has first to be decided as to whether the applicant had a PE in India as per the provisions of article 5 of the DTA or not. Since the applicant was only engaged in the burial of pipelines, therefore, it cannot be said that there was any fixed place through which its business was carried on. Thus, the applicant can be said to have a PE in India only if the nature of its activities in Bombay High Court can be br ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... days in any fiscal year, which is not the case here. It, therefore, follows that the applicant has no PE in India within the meaning of article 5 and since article 7 of the DTA permits the taxation, in the hands of a resident of Singapore, only of the profits attributable to a PE in India, no part of the profits earned by the applicant from its activities under the contract can be charged to Indian income-tax even though such activities took place within Indian territory and the profits therefrom would have been chargeable to tax in India but for DTA. 7. For the reasons discussed above, the authority pronounces the following ruling on the question raised in Application No. P 11 of 1995. Ruling The revenues earned by the applican ..... X X X X Extracts X X X X X X X X Extracts X X X X
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