9911796707
TMI Blog2013 (11) TMI 1683X X X X Extracts X X X X X X X X Extracts X X X X ..... tages of completion cannot be apportioned in part and therefore, the total consideration of such indivisible contract has to be held as income within the meaning of section 44BB of the Act. (ii) the consideration paid for a project involving installation, assembly or the like would be the price paid for such project and cannot be termed as" Fees for Technical Services" (iii) the sub-contract agreement is being under consideration is a composite one and the income of the assessee is taxable under section 44BB of the Act. 2. On the facts and in the circumstances of the case and in law, the Id. CIT(A) erred in directing the assessing officer the receipts of Rs. 11, 19,02,560/- treated as" Fees for Technical Services" be included as part of total consideration of sub-contract receipt and to be assessed as per the provisions of section 44BB of the Act and also the other receipts of Rs. 3,24,40,325/- being 20% of Rs. 16,22,01,626/- to be considered as part of total consideration. 3. On the facts and in the circumstances of the case and in law, the Id. CIT(A) erred in holding that since the entire income of the assessee was liable for deduction of tax at source under section 195 o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed before the Ld. CIT(A) that the assessee company, resident of UAE was entitled to be governed by the provisions of DTAA and revenue earned were offered for tax under Article-5 of the DTAA. Under Article-7 of the DTAA, the business profits of the assessee could be taxed in India only if it has a PE in India within the meaning of Article-5 of the DTAA. It was argued before the Ld. CIT(A) that the agreement has not been interpreted by the AO properly. The agreement should have been read as a whole. It was pointed out that the AO has cherry pick certain clauses of the contract and ignored the other relevant clauses thereby wrongly interpreting, understanding and appreciating the true nature of the contract. It was pointed out that the main intention/purpose of the association between the assessee and Engineers India Ltd was to install offshore pipelines, risers and risers clamps, testing etc. To achieve this main purpose, the assessee had undertaken various activities which are listed down in the various articles of the contract. It was strongly contended that these activities were incidental to the main job and were integral part of the contract to ensure that all the pipe lines are ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the Tribunal as exhibited from page-1 to 37 of the paper book. Pointing out to the decision of the Hon'ble Delhi High Court in the case of Jindal Drilling and Industries Ltd. 320 ITR 104, the Ld. Counsel for the assessee submitted that in this case, the Hon'ble Delhi High Court on identical facts has held that provision of presumptive tax would apply and not section 9(1)(vii). Similar decision have been taken by the Tribunal Delhi Bench in the case of G&T Resources (Europe) Ltd. Vs DCIT 139 TTJ 568. 9. We have considered the rival submissions and carefully perused the orders of the lower authorities and the material evidences brought on record. The entire dispute revolves around whether part of the payment received by the assessee can be considered as fee for technical services and whether the other part would be assessed under the presumptive tax of Sec. 44BB of the Act. It is not in dispute that by sub-contract agreement between Engineers India Ltd and the assessee, the assessee was given a turnkey project for laying and installation of pipe lines. It is a settled proposition of law that when a contract consists of a number of terms and conditions each condition does not form ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 143 and determine the sum payable by, or refundable to, the assessee.] Explanation.-For the purposes of this section,- (i) "plant" includes ships, aircraft, vehicles, drilling units, scientific apparatus and equipment, used for the purposes of the said business; (ii) "mineral oil" includes petroleum and natural gas.] It clearly shows that the assessee is engaged in the business of providing services or facilities in connection with its business, therefore, provisions of Sec. 44BB clearly apply on the facts of the case. The AO has grossly erred in considering part of the income of the assessee as fee for technical services without pointing out which part relates to FTS. The Ld. CIT(A) has rightly considered the entire income to be taxed u/s. 44BB of the Act. 10. A careful perusal of the various decisions relied upon by the assessee shows that the work/services done by the assessee do not come within the purview of Sec. 9(1)(vii) of the Act. Respectfully following the decisions of the Tribunal, we do not find any reason to interfere with the findings of the Ld. CIT(A). Order of the Ld. CIT(A) is confirmed. Ground No. 1 & 2 are accordingly dismissed. 11. Ground No. 3 relates ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
