9911796707
TMI Blog2008 (8) TMI 33X X X X Extracts X X X X X X X X Extracts X X X X ..... se of promotion of small and medium size business organizations in various ways, having its office in Seoul. Articles of incorporation of SBC has been filed alongwith the application. SBC has opened liaison office in India at Gurgaon after obtaining the permission from the RBI. RBI in its letter dated 24.1.2007 stipulated among other things that the liaison office should not involve in any trading activities and the entire expenses of the office should be met exclusively out of funds received from abroad through normal banking channels. The purpose of opening liaison office in India is stated to be to assist and facilitate the Korean businesses in India and to act as an interface between them and the Governmental authorities. Th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ical sub-division or a local authority thereof to an individual in respect of services rendered to that State or sub-division or authority shall be taxable only in that State. (b) x x x x x x x x 4. The provisions of paragraph (1) of this article shall like-wise apply in respect of remuneration or pensions paid, in the case of Korea, by the Bank of Korea, the Export-Import Bank of Korea and the Korea Trade Promotion Corporation and in the case of India, by the Reserve Bank of India and the EXIM Bank of India, and by organizations recognized by and agreed between the competent authorities of the Contracting States. 3. The applicant submits that by virtue of clause (a) of Article 20 the remuneration paid/received by Mr. Ji Hoon Lee from S ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Administration. All this will lead to the conclusion prima facie that the SBC, which is a State managed Corporation, pays the remuneration to Mr. Ji Hoon Lee employed in its liaison office in India out of its own funds. 4. In an apparent bid to establish that the source of salary payment to Mr. Hoon Lee is the Government funds placed at the disposal of SBC, the applicant has filed an affidavit of the Administrator of SMBA. The contents of the affidavit are as follows: 5. SBC is a non-profit Government controlled entity under the direct supervision of SMBA which is a Government department of the Republic of Korea. SMBA seems to be a department of the Government (Though the expression used is Govt. agency in the context the dep ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nly, which is a corporate entity. It can be mixed up with other funds received from other sources and utilized by SBC for various purposes. It is a different matter if the Government while sanctioning the contribution makes the allocation specifically for the personnel expenses incurred by SBC. The statement in the affidavit quoted above is not at all clear on this aspect. In order to give an opportunity to the applicant to clarify the said statement and to furnish some evidence to substantiate that the personnel expenses are met out of the allocation made by the Government to the fund for this specific purpose, the case was adjourned. However, the authorized representative of the applicant at the resumed hearing of the case stated that he ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of Income-tax (International Taxation), Delhi, in his comments and reiterated before us in the course of hearing. It is submitted that article 20(4) extended the benefit of Art. 20(1) only to three entities and therefore the other business undertakings of the Government like the applicant cannot claim the benefit of article 20(1). In our view, this contention, though plausible, cannot be sustained. The specification of certain organizations which are controlled by the respective Governments does not exclude by necessary implication the other State run entities falling within the scope of article 20(1) as interpreted by us. Prima facie, none of the entities specified in article 20(4) would be entitled to invoke Article 20(1) even in t ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
