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TMI Blog2019 (6) TMI 1502X X X X Extracts X X X X X X X X Extracts X X X X ..... read harmoniously with the provisions of the Act referred to above, it will be fair and reasonable to conclude that the expression any 12 month period mentioned in Article 5(2)(k)(i) of the India-U.K. DTAA has to be construed to mean the previous year or financial year as per section 3 of the Act, since, the income is sought to be taxed in India. It has to be seen whether the employees or personnel of the assessee have rendered services in India for a period aggregating to 90 days or more in financial year 2011-12 to constitute a PE. As per the chart submitted by the assessee it is claimed that the employees and personnel of the assessee were situated in India for rendering services for a period aggregating to 77 days. Since, the aforesaid factual aspect has not been verified by the Departmental Authorities as the assessee did not raise this issue before them, we are inclined to restore the issue to the Assessing Officer for adjudication keeping in view of our observations hereinabove and only after due opportunity of being heard to the assessee. This ground is allowed for statistical purposes. Denial of India-U.K. Tax Treaty benefit - denial on the ground that income of the assess ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd is a tax resident of United Kingdom (UK). The assessee offers legal consultancy services to its clients all over the world including India. For the impugned assessment year, the assessee filed its return of income on 30th September 2013, declaring total income of ₹ 25,77,672. During the assessment proceedings, the Assessing Officer called upon the assessee to furnish the details of professional fees earned during the year. After perusing the details, the Assessing Officer noticed that the assessee has received the following receipts during the year: 1. Income in respect of services rendered in India ₹ 2,10,00,443 2. Income in respect of services rendered outside India ₹ 1,62,22,410 3. Towards Disbursement ₹ 4,60,624 Total:- ₹ 3,76,83,477 7. After verifying the details, the Assessing Officer was of the view that the entire amount received by the assessee would be deemed to be the income which accrued or arose in India, since, such income is on account of India Specific Projects. The Assessing Officer observed, even the income in respect of services rendered outside India would also be taxable since the services though rendered outside Ind ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... -UK Tax Treaty, fiscal year which has been defined to be the previous year would have been used in Article- 5(2)(k)(i) of the India-UK Tax Treaty. Thus, he submitted, the meaning ascribed to fiscal year cannot be ascribed to the term "any twelve months period''. 10. We have considered rival submissions and perused the material on record. Though, the learned Departmental Representative has made an attempt to make out a case by interpreting the expression "any twelve months period" as used in Article-5(2)(k)(i) of the India-U.K. Tax Treaty in a different manner, however, we are not impressed with the same. In our considered opinion, the issue is squarely covered by the decision of the Co-ordinate Bench in assessee's own case for the assessment year 2012-13 in Linklaters LLP's case (supra). While dealing with the aforesaid issue, the Tribunal has held as under:- "14. We have considered rival submissions and perused materials on record. Undisputedly, the issue raised in this ground was never agitated by the assessee either before the Assessing Officer or before the DRP. Thus, this ground raised by the assessee has to be treated as an additional gr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ys or more in financial year 2011-12 to constitute a PE. As per the chart submitted by the assessee at Page-37 of the paper book, it is claimed that the employees and personnel of the assessee were situated in India for rendering services for a period aggregating to 77 days. Since, the aforesaid factual aspect has not been verified by the Departmental Authorities as the assessee did not raise this issue before them, we are inclined to restore the issue to the Assessing Officer for adjudication keeping in view of our observations hereinabove and only after due opportunity of being heard to the assessee. This ground is allowed for statistical purposes." 11. Facts being identical, we do not find any reason to deviate from the aforesaid decision of the Co-ordinate Bench. Therefore, respectfully following the decision cited supra, we direct the Assessing Officer to verify as to whether the employees/personnel of the assessee were situated in India for rendering services for a period not exceeding ninety days during the previous year relevant to the assessment year under dispute and if it is found to be so, then, it has to be held that the assessee did not have a PE in India during ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... istinction has been pointed out by the Ld. CIT-DR on facts or law. Under these circumstances, respectfully following the orders of the Tribunal in Linklaters's case for earlier years, we hold that the assessee is entitled to claim benefits of India U.K.- DTAA. Therefore, Grounds No. 8 to 8.4 are allowed." 9. Thus, in view of the aforesaid decision of the Co-ordinate Bench in assessee's own case, we hold that the assessee is entitled to claim benefit under India-U.K. DTAA. As regards the nature of income received by the assessee, whether is FTS? and its taxability under the Act in India, the Co-ordinate Bench while deciding the issue in assessee's own case for assessment year 2011-12 in the order referred to above, has ultimately concluded as under:- "32. Thus, in view of the facts brought before us, and in view of the legal position as explained in many judgments as discussed above, we are not in a position to agree with the view taken by the Revenue and thus hold that the income of the assessee would not fall in the category of "Fee for Technical Services" as envisaged in Article 13 of India-U.K. DTAA. Further, since this amount is not taxable u ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssee's own case for assessment year 2011-12, the Tribunal has held as under:- "35. We have gone through the orders passed by the lower authorities and also Article 15 of India-U.K. DTAA. It is noted by us that Article 15 of DTAA deals with taxability of independent personal services. This Article starts with the words "Income derived by an individual ..... in respect of professional services or other independent activities of similar character "It is noted by us that Article 15 shall be applicable for determining taxable income in the hands of individual and not other persons. The assessee is certainly not an Individual. Thus this Article cannot be made applicable on the assessee being not an individual. Similar issue had come up before the Tribunal in the aforesaid case of M/s. Linklaters (for AY 1995-96) wherein the Tribunal held at para 106 of the order that Article 15 shall be applicable only when services are rendered by an individual. Thus, respectfully following the order of the Tribunal it is held that impugned amount of fee received by the assessee would not be liable to be taxed under Article 15 of India-U.K. DTAA. Thus, Grounds No. 10 to 10.5 are all ..... 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