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TMI Blog2024 (2) TMI 1238X X X X Extracts X X X X X X X X Extracts X X X X ..... are of the considered view that the right to use the dredger has been transferred to the assessee for the period of lease. The Captain of the ship although appointed by the owners shall work under the orders and directions of the assessee. Once the hired dredger is placed at the disposal of the assessee, the payment to the lessor does not depend on the dredging activity undertaken. Even if the dredger does not work for a single hour, the payment to the lessor would remain constant. Further, the dredger has been given only to the assessee for his exclusive use. Accordingly, the assessee is in effective control of the equipment. As in the case of West Asia Maritime Ltd. [ 2006 (5) TMI 152 - ITAT MADRAS-B ] ITAT held that ship being an equipment under Article 12, hire charges for user of ship partook the character of royalty for use of equipment under provisions of Section 9(1)(vi) and, hence, exigible to tax in India. We are unable to accept the argument of the assessee that the assessee company merely availed the facility of dredger without exercising any possessory rights over it. The assessee has placed reliance on various cases, however, the same are distinguishable on facts and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Shramdeep Sinha, CIT DR ORDER PER BENCH: These are cross appeals filed by the Assessee and Department against orders passed by Commissioner of Income Tax (Appeals) (in short CIT(A) ), for A.Ys. 2003-04 to 2010-11 (ITA Nos. 30 to 37/Rjt/2012) and the Department has filed appeals for A.Ys. 2003-04 to 2010-11 (in ITA Nos. 62 to 69/Rjt/2012) and A.Ys. 2010-11 to 2011-12 (in ITA Nos. 26 to 28/Ahd/2014). Since largely common facts and issues for consideration are involved for the impugned assessment years under consideration, all the appeals are being taken up together. We shall first take up the appeals filed by the Assessee and the Department for A.Y. 2003-04 and our observations would apply to other years as well, as may be applicable. 2. The assessee has taken the following grounds of appeals:- 1. On the facts and in the circumstances of the case, the learned CIT(A) erred by rejecting the appellant's relevant grounds of appeal raised before him of not treating the Time Charter Hire Charges as Royalty and not taking into consideration the factual situation and clarification given by CBDT, Department of Revenue, Government of India to all the Indian National Ship Owners Association ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... therefore, on that ground the Assessing Officer was not justified in passing the impugned order u/s. 201(1)/201(1A) of the I.T. Act and accordingly such order is rendered bad in law. 6. The appellant craves leave to add, alter, amend and/or withdraw any ground or grounds of appeal either before or during the course of hearing of the appeal. 3. The brief facts of the case are that the assessee is engaged in the business of dredging, reclamation and other maritime activities. During the course of proceedings under Section 201(1) / 201(1A) of the Act, the Tax Officer observed that the assessee company had taken dredgers for the purpose of its business from a non-resident company M/s. Miller Dredging Company Inc., British Virgin Islands in pursuance to agreements entered with such company since 2002. The assessee company had taken these dredgers from M/s. Miller Dredging Company on a long term charter basis alongwith crew who were carrying out their activities at the command of the assessee in relation to dredging operation of the assessee at various places in India. During the year under consideration, the assessee had remitted a sum of Rs. 15,69,37,334/- as time charter hire charges ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the view that in case the assessee had any doubt regarding non-deduction of tax at source on the aforesaid payment, then the assessee should have approached the Income Tax Department for ascertaining the correct amount of TDS on such payments. The Assessing Officer held that in the case of West Asia Maritime Ltd. 111 ITD 155 (Chennai), the ITAT has held that it is not open for a person making payment to a non-resident to take a unilateral decision that the payment made by him are not sums chargeable to tax. To take that view, the concurrence of the Assessing Officer as provided in sub-Section (2) of Section 195 is a sine qua non. 5. The conclusions and the findings recorded by the ADIT may be summarized as under: (1) The AO observed that the time charter hire charges paid to Miller Dredging Inc. are chargeable to tax under the Income Tax Act, 1961, as the dredgers owned by the aforesaid foreign company have been operating in Indian territorial waters for sufficiently long period of time. (2) Technical staff was maintained by the foreign company on the dredgers, which proves that the foreign company has a business connection, and therefore, the hire charges received by the forei ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he nature of business income. The AO also gave a finding that the Appellant Company filed only a few forms No. 15CA/CB and these forms were not filed regularly. 6. In appeal, CIT (Appeals) partly allowed the appeal of the assessee by holding that in the instant facts, there is no business connection of the assessee in India. However, CIT held that the payments made by the assessee qualified as royalty within the meaning of Section 9(1)(vi) of the Act and the assessee was under an obligation to deduct tax at source on such royalty payments. Further, CIT also held that the overseas payee company is not eligible for tax treaty benefits since it did not produce the relevant documents before the tax officer. Further, CIT also held that the assessee did not disclose the vital fact that the payee was Tax resident of British virgin Island and not UK and this fact was not disclosed to RBI or to its Auditors. The CIT observed that the assessee also did not disclose this important fact of the residential status of the recipient before the assessing officer in 201 proceedings as well. Therefore, the benefit of tax treaty was not available to the assessee in the instant facts. Further, CIT reje ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . at the place of registration of the ship / dredger or at its then available location, as physical inspection and survey is an essential component of the entire process. (b) The protocol, if any, is signed at the initial stage. This leads to the Charter Party (contract for chartering ships) which is signed between the two parties, laying down the terms and conditions of the charter - in the instant case, the protocol is signed in New York. Even on renewal of charter agreement, if any, are signed by Miller Dredging Co. outside India. (d) The rights and obligations of each party, including charter hire rates, place of delivery, place of arbitration, obligations of each party for complying with national laws, etc., are clearly defined in the Charter Party. CHARTER PARTY is the term used for referring to the Contract/ Agreement between the two parties for chartering ships. (e) The place of arbitration is New York as mentioned in the charter party between the Appellant and Miller Dredging Company, Inc.. (f) The payment of charter hire is made by the Indian company in an account outside India, The amount is remitted directly. The receipt of charter payment is therefore outside India, (g ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ndian waters, rests wholly and solely on the Indian Company. It is to be noted that the license u/s 406/407 of the Indian Merchant Shipping Act is issued in the name of the Indian company and not the non-resident. (r) The Indian company has to obtain the clearance from the Indian custom authorities for the chartered dredgers. Bill of entry in this regard has to be filed by the Indian Company only. The non-resident company has nothing at all to do with this process. Customs duty, if any payable on the deployment of the chartered Dredgers in Indian coastal waters during the period of hire, has to be paid by the Indian company. (s) Security clearance in respect of the chartered dredgers is obtained from the Indian Naval and other Government Authorities by the concerned port, based on information and details submitted by the Indian company alone. Once again, the foreign company has no role to play in the processes of obtaining security clearance, without which the chartered foreign flags dredgers cannot operate in Indian coastal waters. (t) Port clearance has to be periodically obtained by the Indian Company from the concerned port where the foreign flag dredger is deployed. Such clear ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... heir agents or supercargo, when required, with a true copy of such deck and engine logs, showing the course of the vessel, distance run and the consumption of fuel. (vi) Owners shall maintain the cargo handling gear of the ship which is as follows: As efficacy providing gear (for all derricks or cranes) capable of lifting capacity as described. Owners shall also provide on the vessel for night work lights as on board, but all additional lights over those on board shall be at Charterers expense. The Charterers shall have the use of any gear on board the vessel. If required by Charterers, the vessel shall work night and day and all cargo handling gear shall be at charters disposal during loading and discharging. (vii) Navigation Nothing herein stated is to be constructed as a demise of the vessel to the Time charters. The owners shall remain responsible for the navigation of the vessel, acts of pilots and tug boats, insurance, crew, and all other similar matters, same as when trading for their own account Considering the above mentioned factual position and several other submissions made on behalf of ,the appellant company elaborated above, besides the issue of business connection, i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Telecommunication services ltd 332 ITR 340 has concurred with similar criterion, in para 69 of its order, while referring to the judgement of Hon'ble Karnataka High Court in the case of Lakshmi Audio Visual Inc. v. Asstt. CCT [2001] 124 STC 426 while deciding whether an equipment is leased out or services are provided by the owner as follows: 69. We may also refer to the following distinction brought out by the Karnataka High Court between leasing out of equipment and the use of equipment by its customer. This was done in the case of Lakshmi Audio Visual Inc. (supra) in the following terms: 9. Thus if the transaction is one of leasing/hiring/letting simpliciter under which the possession of the goods, i.e., effective and general control of the goods is to be given to the customer and the customer has the freedom and choice of selecting the manner, time and nature of use and enjoyment, though within the frame work of the agreement, then it would be a transfer of the right to use the goods and fall under the extended definition of 'sale . On the other hand, if the customer entrusts to the assessee the work of achieving a certain desired result and that involves the use of go ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... an identified vehicle belonging to the transport operator being delivered to the customer and the customer is given the exclusive and effective control of the vehicle to be used in any manner as it deems fit; and during the period when the lorry is with the customer, the transport operator has no control over it. The transport operator renders no other service to the customer. Therefore, the transaction involves transfer of right to use the lorry and thus be a deemed sale. In the instant case, the lessee has full control over the equipment and the staff and the operation of the equipment. It is similar to (even more clear case as the payment is not assured minimum but is fixed irrespective of the actual usage) case (ii) cited by hon'ble Karnataka High Court as reproduced above. The transfer of right to use the Dredger itself, is clearly transferred for a period (not outright sale); and therefore the payment would be of the nature of Royalty. The Captain (although appointed by the owners) shall be under the orders and directions of the Characters as regards employment and agency. In so much so that if dissatisfied with his services, the lessee can get him changed as per the agre ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... extent, therefore, the orders of the ADIT are reversed. Coming to the next question as to whether the payments can be said to be in the nature of royalty income, after considering the entire facts and circumstances, the provisions of law and the cases cited, I am of the firm view that these payments are in the nature of royalty as per the amended provisions of sec. 9(1)(vi). The decision of ITAT, Cochin in the case of M/s. Kin Ship Services India Pvt Ltd is not good law as the amended provisions of sec. 9(1)(vi) rw explanation 2 clause (iva) were not bought to its notice and it failed to consider that now the use or right to use any industrial, commercial scientific equipment is covered under Royalty. As per the discussion above, therefore, it is held that the appellant company was under an obligation to deduct tax at source applicable to royalty payments., particularly as per the amended provisions wherein now the non-resident need not have residence or place of business or business connection in India nor services are necessarily to be rendered in India for the royalty to be deemed taxable in India u/s 9(1)(vi). 7.5 Now, whether, having regard to the relevant facts and circumstan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rtion was made by the assessee for each remittances. Clearly, the fact that the payee was resident of a tax haven i.e. British Virgin Island and not UK, was not even disclosed to the RBI. I have not admitted the additional evidences in the form of Audit Reports and proceedings before the AO [the AO having jurisdiction over the assessee's assessments is different from the present AO who has passed the order u/s. 201(1)] sought to be filed before me, primarily because these are immaterial; because nowhere has the assessee shown that the important fact of the residential status of the payee was correctly disclosed before the auditor or the AO. Any opinion of the auditor or the AO, even if formed [I have not examined the material evidences, as I have not admitted it]; formed on the basis of incomplete disclosure of facts cannot be allowed to be relied upon by the assessee. Further, the decision of ITAT, Cochin in the case of M/s. Kin Ship Services India Pvt Ltd is not good law as the amended provisions of sec. 9(l)(vi) rw explanation 2 clause (iva) were not bought to its notice and it failed to consider that now the use or right to use any industrial, commercial scientific equipmen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dredgers are to be delivered at one of the Ports of India by the foreign company. As per the agreement, the dredgers are hired out alongwith navigational staff of the foreign company including the Captain of the vessel. 8. During the course of assessment proceedings the Assessing Officer held that time hire charges were in the nature of Royalty under the provisions of Section 9(1)(vi) of the Act. 9. In appeal, Ld. CIT(A) confirmed the order passed by Assessing Officer and held that the payments qualify as Royalty under Section 9(1)(vi) of the Act. After analysis of the relevant facts, the Ld. CIT(A) formed the view that the contract for providing dredgers is essentially a contract of lease of dredger. The fact that generally the dredgers have to be maintained as per the lessor s requirement and to be handled under its trained staff is only with a view to ensure that in case of temporary hiring of costly specialized equipment, the same should be received back in a good working condition and that there is no unwarranted damage to the equipment. Therefore, this does not amount to provision of services but it is a corollary to hiring of equipment itself. The lessor had no control on dr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ces (India) (P.) Ltd. 31 SOT 375 (Cochin), wherein the ITAT held that payments made by way of hire charges of ships could not be said to be in the nature of Royalty within the meaning of Section 9(1)(vi) of the Act. The assessee further placed reliance in the case of Isro Satellite Centre 307 ITR 59 (AAR) in which the AAR ruled that by leasing of transponding space by earmarking a space segment capacity of the transponder for the use of the applicant, assessee did not got any possession of the equipment nor did it use any equipment and hence payment made by the applicant cannot be regarded as being made for the use of the equipment. Further, the assessee also placed reliance in the case of Asia Satellite Telecommunications Co. Ltd. 332 ITR 340 (Delhi), in which it was held that there is a well-known distinction between lease of equipment and use of equipment, while ruling that lease of transponder space is not Royalty as the assessee was the operator of the satellite and continued to be in control of the satellite. Accordingly, the assessee submitted that the assessee company merely availed the facility of dredgers without exercising any possessory rights over it. The assessee subm ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he relevant extracts of the Income Tax Act, Section 9(1)(vi) for ready reference:- Explanation 2. For the purposes of this clause, royalty means consideration (including any lump sum consideration but excluding any consideration which would be the income of the recipient chargeable under the head Capital gains ) for (i) the transfer of all or any rights (including the granting of a licence) in respect of a patent, invention, model, design, secret formula or process or trade mark or similar property ; (ii) the imparting of any information concerning the working of, or the use of, a patent, invention, model, design, secret formula or process or trade mark or similar property ; (iii) the use of any patent, invention, model, design, secret formula or process or trade mark or similar property ; (iv) the imparting of any information concerning technical, industrial, commercial or scientific knowledge, experience or skill ; (iva) the use or right to use any industrial, commercial or scientific equipment but not including the amounts referred to in section 44BB ; (v) the transfer of all or any rights (including the granting of a licence) in respect of any copyright, literary, artistic or s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... out that the charter party was approved by the New York Produce Exchange and that there is no warrant for supposing that though the payment which the charterers bound themselves to make to the owners of the ship is on account of the carriage of goods, the parties described it as payable for the use and hire of the Vessel, in order to avoid the payment of Indian Income Tax. Referring to the clause on the liberty reserved to the charterers to sub-let, and the captain of the ship should be under the orders and directions of the charterers as regards employment and agency, the Supreme Court pointed out the character of the payment cannot change according to the use to which the charterers put the ship or according as to whether the ship is loaded with goods in a port in India. What is payable as hire charges for the use of the ship cannot transform itself into an amount payable on account of the carriage of goods, by reason of the circumstance that the ship was loaded with goods in India. Thus, neither the one nor the other receive any amount on account of the carriage of goods, the charterer paid hire charges to the owner of the ship for the use of the ship and since they loaded the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... under Section 3A of the Tamil Nadu General Sales Tax Act, this Court held that in a time charter party, there being no transfer of effective control for use, the transactions would not attract Section 3A of the Tamil Nadu General Sales Tax Act. 66. Learned senior counsel appearing for the assessee submitted that the view of this Court in the decision Essar Shipping Ltd. (supra) squarely covers the case on hand, particularly as regards the phrase 'use or right to use' and hence, when the transaction is one of service in nature, the question of attracting Clause (iva) to Explanation 2 does not arise. 67. We do not agree with the submission of the assessee. On the expression 'use or right to use' appearing under Explanation 2(iva) to Section 9(1)(vi), the decision of this Court in Essar Shipping Ltd., (supra) is distinguishable. We may note that the decision in Essar Shipping Ltd. (supra) rests on the scope of the charging provision under Section 3A of the Tamil Nadu General Sales Tax Act. Section 3A, introduced consequent on the 46th amendment, seeks to levy tax on the transfer of right to use in goods. The Section reads as follows: Section 3A. Levy of tax on right to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ct, right to consume, to destroy, to alienate or transfer, etc. In law it is not only possible but also permissible that the various rights and interest may be vested in various persons. While remaining the owner of a property, a person may create a charge on the property, mortgage it or lease it. In the transaction of sale, all the rights of the owner are transferred to the purchaser and it is said that the property in the goods passes to the purchaser. In a lease of immovable property, there is a transfer of a right to enjoy such property; a lease of land and a bailment of chattels are transactions of essentially the same nature. (Salmond on Jurisprudence -Twelfth Edition at page 424) Section 148 of the Contract Act defines bailment in the following terms : 148. 'Bailment', 'bailor' and 'bailee' defined. -A 'bailment' is the delivery of goods by one person to another for some purpose, upon a contract that they shall, when the purpose is accomplished, be returned or otherwise disposed of according to the directions of the person delivering them. The person delivering the goods is called the 'bailor'. The person to whom they are delivered is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ference to Haryana General Sales Tax Act. This case related to hiring of shuttering materials to builders for use in the course of construction of buildings. The Supreme Court pointed out that the definition of sale in the Act includes the transfer of the right to use any goods for any purpose (whether or not for a specified period) for cash, deferred payment or other valuable consideration . The provision expressly speaks of transfer of the right to use goods and not of transfer of goods, and transfer of right to use goods for consideration is deemed to be sale. Where the transfer of a right to use is for consideration, the requirement of law is satisfied and is deemed to be a sale. The Supreme Court rejected the contention of the assessee and held that, to come under the expression of right to use goods to be a deemed sale, the transaction need not be like a lease. When the assessee transferred the shuttering for consideration to builders for use in the construction of buildings, there can be no doubt that the requirement of a deemed sale was satisfied. 74. In the decision 20th Century Finance Corpn. Ltd. (supra), the Apex Court pointed out that the definition given under Article ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the owner of the price of the hiring. The proprietary interest in the chattel is not changed, but remains in the owner, although upon delivery the hirer becomes legally possessed of the chattel hired, so that if it is lent for a time certain, even the true owner is debarred during that time from resuming possession against the hirer's will and, should he do so, becomes liable in damages for the wrongful seizure. 70. We can with advantage refer to 'Bailment by Palmer'. The learned author refers to the classification of bailment made by Holt C.J. in Coggs v. Bernard 1703 (92) ER 107 into six categories of which the third is relevant on the facts in the case of the appellant. Here the equipment, on being received from the manufacturer/supplier, is left with the hirer for being used for hire. The material extract of that book reads thus: And there are six sorts of bailments.... The third sort is, when goods are left with the bailee to be used by him for hire; this is called location et conduction, and the lender is called locator and the borrower conductor. 71. Be that as it may, what is the contractual nature of the transaction specified in Sub-clause (d) of Clause (29A)? ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f transfer. 76. Thus a reading of the decisions of the Apex Court shows that for the purpose of levy of sales tax on a deemed sale, there must be a transfer of right to use goods, which contemplates delivery of possession, so that, the transferee has a control over the economic benefits over the property. For the purpose of understanding 'royalty' under Clause (iva), we do not find any such necessity of emerging termination of rights of the owner and so long as the assessee has the custody and has the right for economic exploitation of the ship on payment of charges, we do not find the decision under the Sales Tax Act having relevance to the case on hand. As pointed out in the Supreme Court decision in Gosalia Shipping (P.) Ltd. (supra), the charter, though does not have the possession, yet, has the right to give direction to the course that the ship will take, to determine the voyage. Thus even though the ship never leaves the owner, the amount paid by the charterer for the use of the ship by its custody has to be seen in the context of the expression 'use or right to use' as appearing under Clause (iva). In the decision Bharat Sanchar Nigam Ltd. (supra), the Supre ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt, for which it paid the foreign enterprise, the consideration and we have no hesitation in holding that the character of payment is nothing but royalty. 17. Further in the case of West Asia Maritime Ltd. vs. ITO 111 ITD 155 (Chennai) the ITAT held that ship being an equipment under Article 12, hire charges for user of ship partook the character of royalty for use of equipment under provisions of Section 9(1)(vi) and, hence, exigible to tax in India. 18. Further, we are unable to accept the argument of the assessee that the assessee company merely availed the facility of dredger without exercising any possessory rights over it. The assessee has placed reliance on various cases, however, the same are distinguishable on facts and the aforesaid cases as cited read with the plain language of the Statute are clearly applicable to the assessee facts. 19. Accordingly, we are of the considered view that the payments made by the assessee to M/s. Miller Dredging Company Inc. qualify as Royalty for use of equipments under Section 9(1)(vi) of the Act and the assessee was under an obligation to deduct tax at source as royalty payments at the time of making payments to the non-resident payee. 2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r Section 201(1) and 201(1A) of the Act in respect of payment made to a non-resident entity. In our view, Ld. CIT(A) has correctly observed that the Calcutta High Court in the case of Bhura Exports Ltd. vs. ITO in ITA No. 116 of 2011 held that there is no time limit for initiating withholding tax proceedings during the period 1st April 1989 to 3rd March 2010. The High Court held that the order passed by the Assessing Officer under Section 201 of the Act is not barred by limitation since the Act did not specify any specific time limit for treating a tax payer as assessee in default under Section 201 of the Act. The High Court also ruled that the Limitation Act, 1963 does not apply to Income Tax Law as it is a self-contained code in itself. We observe that from 1st April, 2010, the provision prescribing a time limit to pass order under Section 201 of the Act in the case of resident tax payers was reintroduced by way of sub-section (3) of Section 201 of the Act. However, as elaborated in the Memorandum explaining the provisions of Finance Act 2009, it has been clarified that the time limit will not be applicable in the following cases:- (i) Where tax has been deducted but no deposited ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... llular Ltd. 158 taxmann.com 163 (Telangana) , the High Court held that since there is no specific period of limitation prescribed for initiating proceedings under Section 201(1) and 201(1A) and that reasonable period would depend on facts and circumstances of each case and therefore, where CIT(A) and also Tribunal held that show-cause notice issue by Assessing Officer initiating proceedings under Section 201(1) against assessee after 4 years was barred by limitation, same could not be said to be proper, legal or justified. In the case of Bhura Exports 13 taxmann.com 162 (Calcutta) , the High Court held that when there was no period of limitation fixed for exercising power under Section 201 at the relevant point, there is no question of invoking a reasonable period of limitation for applying provision contend in Section 201 of the Act. In the case of Mass Awash Pvt. Ltd. 83 taxmann.com 306 (Allahabad) , the High Court upheld initiation of proceedings under Section 201(1) / 201(1A) after a lapse of 10 years in case of assessee company, as there was reasonable explanation for delay. In the case of Indo-Gulf Corporation Ltd. 99 taxmann.com 432 (Allahabad), the High Court held that the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to a bona fide belief on part of the assessee. 30. In this ground the assessee has submitted that non-deduction of tax at source by the assessee was on account of a bona fide belief that there was no legal liability on the assessee to deduct tax at source. The assessee placed reliance on various decisions in support of it s contention that once the assessee is under a bona fide belief that no taxes are liable to be deduct tax at source, order passed under Section 201(1) and 201(1A) of the Act is liable to be set-aside. 31. In the instant case we observe that notices under Section 201(1) and 201(1A) of the Act were issued by ADIT on the assessee, following survey proceedings in the case of the assessee. Further, the fact that payee / recipient was resident of a tax heaven i.e. British Virgin Island and not UK was not disclosed by the assessee either to the RBI or to it s auditors and nor to the Assessing Officer. Therefore, the assessee did not deduct taxes at source on payments without disclosing the true set of facts to the concerned authorities and took a suo moto decision not to deduct taxes at source. We are of the considered view that the Ld. CIT(A) has correctly observed that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t. (b) The payer/assessee is required to deduct income-tax on such payments made to non-resident at the specified rates in force. (c) If the parties feel that either the deduction of tax at source by the payer is required to be at a rate lower than the prescribed rate or no deduction is required to be made, they are required to file an application before the Assessing Officer for obtaining such certificate. In case no such application is filed before the Assessing Officer for obtaining such certificate or such application is rejected by the Assessing Officer and direction is issued by the Assessing Officer to deduct such tax at a particular rate, the payer is duty bound to deduct tax as per the directions of the Assessing Officer; and in case no such application for obtaining the certificate was filed before the Assessing Officer, then the payer is duty bound to deduct tax as per the prescribed rates in force at the relevant time. If the payer still fails to comply with the provisions, there is no escape for the payer from suffering the consequences provided under the Act. (d) Since the deduction of tax under section 195 on such payments to non-residents is subject to regular asses ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ither it is the duty nor it is desirable from the payer/assessee to examine whether any tax is deductible at source from the payments made to the non-resident. In case it feels that no tax is required to be deducted at source or required to be deducted at a lower rate, then it is required to obtain such certificate under section 195(2) from the Assessing Officer or for non-deduction of tax at source. This is a safeguard provided under sections 195(2), 195(3) and 197 to payer and payee because before the Assessing Officer while obtaining certificate such facts are required to be established by them. [Para 29] For non-compliance of the statutory provisions of section 195 by the payer, it would have to suffer the consequences laid down by the Legislature under section 40(a)(i). [Para 30] The provision of section 40(a )(i) has been enacted by the Legislature in its wisdom to ensure the effective compliance of provisions of section 195 relating to tax deductions at source in respect of payments made to non-residents outside India. Thus, the provision mandates that no deduction for such payments made to non-residents outside India is to be allowed to the payer/assessee while computing it ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . 2003-04 (in ITA No. 62/Rjt/2012) 35. The Department has raised the following grounds of appeal:- (i) The Ld. CIT(A) has erred in holding that the activity of M/s. Miller Dredging Company is not a business activity but mere leasing of dredger and hence can not be taxed as such. (ii) The Ld. CIT(A) erred in placing reliance on the pre-contractual activity of M/s. Jaisu Shipping Co. Pvt. Ltd. rather than the obligation in the actual contract in arriving at a decision that no business activity was performed by M/s. Miller Dredging Company Inc. BVI. (iii) The CIT(A) has further erred in holding that the foreign company did not have any business connection or any source of business income in India in spite of clear evidence to the contrary. (iv) The Ld. CIT(A) has erred in law and on facts in holding that the entire establishment of the foreign party within the Indian territorial waters did not constitute PE of the foreign party for the purpose of section 9 of the IT. Act. (v) On the facts and circumstances of the case, the Ld. CIT(A) ought to have upheld the order of the Assessing Officer. It is, therefore, prayed that the order of the Ld. CIT(A) may be cancelled and that of Assessing ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ain will supervise the activities of the charterers i.e. the assessee. The Assessing Officer held that M/s. Miller Dredging Company Inc. had derived income from business connection in India from wet lease of dredgers which it had provided to the assessee company on long term charter basis by carrying out business activity through these dredgers as per the directions of the assessee. Therefore, the income earned by the non-resident from it s business activity is taxable in India. 37. In appeal, Ld. CIT(A) gave a detailed finding on the facts of the case and came to the conclusion that the non-resident company did not have a business connection in India and as per the Ld. CIT(A), the overseas company earned rental income for giving out dredgers to the assessee on lease on long-term basis. The Ld. CIT(A) was of the considered view that the non-resident company was not carrying out any active business operations in India but had only earned income from giving on dredgers to the assessee company on long-term hire basis. The Ld. CIT(A) was of the view that provisions of Captain and other crew etc. would not characterize the income from the lease of dredgers as business activity of the no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n company, and the two do not have a revenue sharing agreement or arrangement. With these observations, the Ld. CIT(A) was of the view that the non-resident company did not have a business connection in India. While passing the order Ld. CIT(A) made the following observations:- Some of the important facts which emerges from the elaborate discussion in the assessment order, statement of facts and submissions filed by the appellant are summarized as under: (a) Negotiations are held between foreign ship owners on the one side, and the intending Charterer (Indian Company) on the other side. Such negotiations are generally held abroad, i.e. at the place of registration of the ship / dredger or at its then available location, as physical inspection and survey is an essential component of the entire process. (b) The protocol, if any, is signed at the initial stage. This leads to the Charter Party (contract for chartering ships) which is signed between the two parties, laying down the terms and conditions of the charter - in the instant case, the protocol is signed in New York. Even on renewal of charter agreement, if any, are signed by Miller Dredging Co. outside India. (d) The rights and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... an Company remit the charter hire charges through an authorized' foreign exchange dealer. RBI rules clearly stipulate this. (n) Even after obtaining In-Chartering permission from DG Shipping, the Indian Company cannot operate the foreign ship, till a valid trading license is obtained u/s. 406/407 of the Merchant Shipping Act, 1958 . Application for such license can be made only by the Indian Company. The DG Shipping issues license u/s. 406/407 only to the Indian Company which has In-Chartered the dredger. All obligations and responsibilities for complying with the Merchant Shipping Act, during the period of operation of the dredger in Indian waters, rests wholly and solely on the Indian Company. It is to be noted that the license u/s 406/407 of the Indian Merchant Shipping Act is issued in the name of the Indian company and not the non-resident. (r) The Indian company has to obtain the clearance from the Indian custom authorities for the chartered dredgers. Bill of entry in this regard has to be filed by the Indian Company only. The non-resident company has nothing at all to do with this process. Customs duty, if any payable on the deployment of the chartered Dredgers in Indian ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or their agents or by the captain at their request. (iv) Conduct of the Captain If the charterers shall have reason to be dissatisfied with the conduct of the Captain or officers, the owners shall, on receiving particulars of the complaint, investigate the same, and if necessary, make a change in the appointments. (v) Sailing Orders and Logs. The charterers shall furnish the Captain from time to time with all requisite instructions and sailing directions, in writing, and the Captain shall keep full and correct deck and engine logs of the voyage or voyages, which are to be patent to the charters or their agents, and furnish the Charterers, their agents or supercargo, when required, with a true copy of such deck and engine logs, showing the course of the vessel, distance run and the consumption of fuel. (vi) Owners shall maintain the cargo handling gear of the ship which is as follows: As efficacy providing gear(for all derricks or cranes) capable of lifting capacity as described. Owners shall also provide on the vessel for night work lights as on board, but all additional lights over those on board shall be at Charterers expense. The Chatterers shall have the use of anv gear on boa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ial or scientific equipment. In this regard, distinction must be made between acquiring use of equipment and acquiring service of the equipment, because royalty is payable only on the former. The criteria for determining royalty under the said provision are that the resident should control and have physical possession over the equipment. Moreover, the provider should not be having any risk of substantially diminished receipts or substantially increased expenditures if there is non performance. Lastly, the equipment should be provided exclusively to the resident, and to no others. The Hon ble Delhi High Court in the case of Asia Satellite Telecommunication services ltd 332 ITR 340 has concurred with similar criterion, in para 69 of its order, while referring to the judgement of Hon'ble Karnataka High Court in the case of Lakshmi Audio Visual Inc. v. Asstt. CCT [2001] 124 STC 426 while deciding whether an equipment is leased out or services are provided by the owner as follows: 69. We may also refer to the following distinction brought out by the Karnataka High Court between teasing out of equipment and the use of equipment by its customer. This was done in the case of Lakshmi Au ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n. (ii) On the other hand, let us consider the case of a customer (say a factory) entering into a contract with the transport operator, under which the transport operator has to provide a lorry to the customer, between the hours 8.00 a.m. to 8.00 p.m. at the customer's factory for its .use, at a fixed hire per day or hire per km. subject to an assured minimum, for a period of one month or one week or even one day; and under the contract, the transport operator is responsible for making repairs apart from providing a driver to drive- the lorry and filling the vehicle with diesel for running the lorry. The transaction involves an identified vehicle belonging to the transport operator being delivered to the customer and the customer is given the exclusive and effective control of the vehicle to be used in any manner as it deems fit; and during the period when the lorry is with the customer, the transport operator has no control over it. The transport operator renders no other service to the customer. Therefore, the transaction involves transfer of right to use the lorry and thus be a deemed sale. In the instant case, the lessee has full control over the equipment and the staff and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is being carried on either by the payee i.e. M/s. Miller Dredging Co., or its crew as alleged by the AO. There is no common interest between the appellant company and the foreign company, their transactions are not even doubted less proved to be not at arm's length, and the two do not have a revenue sharing agreement or arrangement. With these observations, I hold that the foreign company did not have any business connection or any source of business income in India and, therefore, the payments received by the foreign company can never partake the charter of business income chargeable to tax under any of the provisions of the I.T. Act. To that extent, therefore, the orders of the ADIT are reversed. 38. The Department is in appeal before us against the order passed by Ld. CIT(A) holding that the assessee does not have a business connection in India. On going through the facts of the instant case, and the observations made by the Ld. CIT(A), we are of the considered view that the Ld. CIT(A) has correctly concluded that the overseas company did not have a business connection in India. We observe that in the instant case, the overseas company did not carry out any dredging operati ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ted from the records that master and crew of board of vessel given on hire to ONGC were working under direction and control of ONGC and thus, those employees did not constitute assessee s service PE in India. Further, the Tribunal observed that it was an undisputed fact that management of assessee company was in Denmark where decision relating to business were taken and, thus, assessee did not have PE in terms of place of management as per Article 5(2)(a) of DTAA. Accordingly, the Tribunal held that no PE existed of the assessee in India and therefore, revenue earned from ONGC could not be taxed in India. In the case of Dharti Dredging and Infrastructural Ltd. 44 SOT 586 (Hyderabad) , the assessee was engaged in the business of marine dredging and port construction. The assessee was awarded a contract for dredging at inner harbour channel of Visakhapatnam Port Trust. For the purpose of executing the contract, assessee hired dipper dredger from MA , Netherlands. During the relevant assessment year, assessee made payments to MA , Netherlands, in respect of usage of dipper dredger. The Assessing Officer held that since assessee had made payments to MA , Netherlands without deducting t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lands company for execution. The assessee executed the work on its own by utilizing the dipper dredger hired from MA , Netherlands. Therefore, it was a case of hiring an equipment, namely, dipper dredger by the assessee and not a case of execution of the work by the Netherlands company on behalf of the assessee. Therefore, the payment made by the assessee to the Netherlands company was nothing but hire charges. The next question arose for consideration was when the assessee paid hire charges to Netherlands company, whether the tax had to be deducted under section 195. Section 195 provides for deduction of tax at source when the payment is made to non-resident which is chargeable to tax under the Act. Therefore, if the payment which was made to foreign company was chargeable to tax, the assessee had to deduct tax at source. [Para 16] The next question arose for consideration was whether the payment made by the assessee to the Netherlands company was taxable in India or not ? For the purpose of taxing income of the foreign company, the foreign company shall have a PE in India. The contention of the revenue was that the dipper dredger itself was a PE since it was working for a long pe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not treating Time Charter Hire Charges as Royalty payments. It is the bounden duty of the field officers to abide with the instructions of CBDT, and by ignoring such instructions, or not taking into Consideration CBDT's Instructions, the International Taxation Division has acted in an arbitrary manner and against the law. Therefore, the order passed by the assessing officer, and the order of the CIT(A) of confirming Time Charter Payments as Royalty, deserved to be quashed. 2. On the facts and in the circumstances of the case, the learned CIT(A) erred in rejecting the appellant's relevant grounds of appeal raised before him contending that the learned Asst. Director of Income-tax (International Taxation) erred in passing the impugned order u/s. 201(1) and section 201(1A) of the IT. Act, 1961 beyond reasonable period being four years from the end of the relevant financial year and, therefore, the order passed by him is bad in law, being time barred and the same deserves to be quashed. 3. On the facts and in the circumstances of the case, the learned CIT(A) erred in holding that the Time Charter Hire charges paid by the appellant-company to the non-resident dredger owner in r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n spite of clear evidence to the contrary. (iv) The Ld. CIT(A) has erred in law and on facts in holding that the entire establishment of the foreign party within the Indian territorial waters did not constitute PE of the foreign party for the purpose of section 9 of the IT. Act. (v) On the facts and circumstances of the case, the Ld. CIT(A) ought to have upheld the order of the Assessing Officer. It is, therefore, prayed that the order of the Ld. CIT(A) may be cancelled and that of Assessing Officer may be restored to the above extent. (vi) The appellant craves leave to add/alter/modify/delete any of the grounds of appeal at the time of hearing. 46. The grounds raised by the Department for A.Y. 2004-05 are similar to grounds raised by the Department for A.Y. 2003-04. 47. In the result, our observations made for A.Y. 2003-04 would apply to A.Y. 2004-05 as well. 48. In the result, the appeal of the Department is dismissed for A.Y. 2004-05. Now we come to the Assessee s Appeal for A.Y. 2005-06 49. The assessee has raised the following grounds of appeal:- 1. On the facts and in the circumstances of the case, the learned CIT(A) erred by rejecting the appellant's relevant grounds of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at there was a liability for deduction of tax at source on the appellant-company , any non-deduction of tax on its part was wholly and entirely attributable to a bonafide belief that there was no legal liability on the appellant-company to deduct tax at source and, therefore, on that ground the Assessing Officer was not justified in passing the impugned order u/s. 201(1)/201(1A) of the I.T. Act and accordingly such order is rendered bad in law. 6. The appellant craves leave to add, alter, amend and/or withdraw any ground or grounds of appeal either before or during the course of hearing of the appeal. 50. The grounds raised by the assessee for A.Y. 2005-06 are similar to grounds raised by the assessee for A.Y. 2003-04. 51. In the result, our observations made for A.Y. 2003-04 would apply to A.Y. 2005-06 as well. 52. In the result, the appeal of the assessee is dismissed for A.Y. 2005- 06. Now we come to the Department s Appeal for A.Y. 2005-06 53. The Department has raised the following grounds of appeal:- (i) The Ld. CIT(A) has erred in holding that the activity of M/s. Miller Dredging Company is not a business activity but mere leasing of dredger and hence can not be taxed as suc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... der passed by the assessing officer, and the order of the CIT(A) of confirming Time Charter Payments as Royalty, deserved to be quashed. 2. On the facts and in the circumstances of the case, the learned CIT(A) erred in rejecting the appellant's relevant grounds of appeal raised before him contending that the learned Asst. Director of Income-tax (International Taxation) erred in passing the impugned order u/s. 201(1) and section 201(1A) of the IT. Act, 1961 beyond reasonable period being four years from the end of the relevant financial year and, therefore, the order passed by him is bad in law, being time barred and the same deserves to be quashed. 3. On the facts and in the circumstances of the case, the learned CIT(A) erred in holding that the Time Charter Hire charges paid by the appellant-company to the non-resident dredger owner in respect of dredgers taken on Time Charter Hire were in the nature of royalty as per provisions of section 9(1)(vi) of the I.T. Act and, therefore, the appellant-company was liable to deduct tax at source u/s. 195 of the IT. Act at the rates applicable to royalty payments. 4. On the facts and in the circumstances of the case, the learned CIT(A) e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ht to have upheld the order of the Assessing Officer. It is, therefore, prayed that the order of the Ld. CIT(A) may be cancelled and that of Assessing Officer may be restored to the above extent. (vi) The appellant craves leave to add/alter/modify/delete any of the grounds of appeal at the time of hearing. 62. The grounds raised by the Department for A.Y. 2006-07 are similar to grounds raised by the Department for A.Y. 2003-04. 63. In the result, our observations made for A.Y. 2003-04 would apply to A.Y. 2006-07 as well. 64. In the result, the appeal of the Department is dismissed for A.Y. 2006-07. Now we come to the Assessee s Appeal for A.Y. 2007-08 65. The assessee has raised the following grounds of appeal:- 1. On the facts and in the circumstances of the case, the learned CIT(A) erred by rejecting the appellant's relevant grounds of appeal raised before him of not treating the Time Charter Hire Charges as Royalty and not taking into consideration the factual situation and clarification given by CBDT, Department of Revenue, Government of India to all the Indian National Ship Owners Association (INSA) members in the correspondence between the INSA, Ministry of Finance Minist ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... impugned order u/s. 201(1)/201(1A) of the I.T. Act and accordingly such order is rendered bad in law. 6. The appellant craves leave to add, alter, amend and/or withdraw any ground or grounds of appeal either before or during the course of hearing of the appeal. 66. The grounds raised by the assessee for A.Y. 2007-08 are similar to grounds raised by the assessee for A.Y. 2003-04. 67. In the result, our observations made for A.Y. 2003-04 would apply to A.Y. 2007-08 as well. 68. In the result, the appeal of the assessee is dismissed for A.Y. 2007- 08. Now we come to the Department s Appeal for A.Y. 2007-08 69. The Department has raised the following grounds of appeal:- (i) The Ld. CIT(A) has erred in holding that the activity of M/s. Miller Dredging Company is not a business activity but mere leasing of dredger and hence can not be taxed as such. (ii) The Ld. CIT(A) erred in placing reliance on the pre-contractual activity of M/s. Jaisu Shipping Co. Pvt. Ltd. rather than the obligation in the actual contract in arriving at a decision that no business activity was performed by M/s. Miller Dredging Company Inc. BVI. (iii) The CIT(A) has further erred in holding that the foreign company ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... -tax (International Taxation) erred in passing the impugned order u/s. 201(1) and section 201(1A) of the IT. Act, 1961 beyond reasonable period being four years from the end of the relevant financial year and, therefore, the order passed by him is bad in law, being time barred and the same deserves to be quashed. 3. On the facts and in the circumstances of the case, the learned CIT(A) erred in holding that the Time Charter Hire charges paid by the appellant-company to the non-resident dredger owner in respect of dredgers taken on Time Charter Hire were in the nature of royalty as per provisions of section 9(1)(vi) of the I.T. Act and, therefore, the appellant-company was liable to deduct tax at source u/s. 195 of the IT. Act at the rates applicable to royalty payments. 4. On the facts and in the circumstances of the case, the learned CIT(A) erred in not admitting evidence assumed by him to be in the nature of additional evidence being audit reports and the documents forming part of the regular assessment proceedings before concerned Assessing Officer. 5. On the facts and in the circumstances of the case and without prejudice to the foregoing grounds of appeal, the learned CIT(A) er ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt for A.Y. 2008-09 are similar to grounds raised by the Department for A.Y. 2003-04. 79. In the result, our observations made for A.Y. 2003-04 would apply to A.Y. 2008-09 as well. 80. In the result, the appeal of the Department is dismissed for A.Y. 2008-09. Now we come to the Assessee s Appeal for A.Y. 2009-10 81. The assessee has raised the following grounds of appeal:- 1. On the facts and in the circumstances of the case, the learned CIT(A) erred by rejecting the appellant's relevant grounds of appeal raised before him of not treating the Time Charter Hire Charges as Royalty and not taking into consideration the factual situation and clarification given by CBDT, Department of Revenue, Government of India to all the Indian National Ship Owners Association (INSA) members in the correspondence between the INSA, Ministry of Finance Ministry of Shipping, of not treating the Time Charter Ships as Equipments, and in turn not treating Time Charter Hire Charges as Royalty payments. It is the bounden duty of the field officers to abide with the instructions of CBDT, and by ignoring such instructions, or not taking into Consideration CBDT's Instructions, the International Taxation ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed by the assessee for A.Y. 2003-04. 83. In the result, our observations made for A.Y. 2003-04 would apply to A.Y. 2009-10 as well. 84. In the result, the appeal of the assessee is dismissed for A.Y. 2009- 10. Now we come to the Department s Appeal for A.Y. 2009-10 85. The Department has raised the following grounds of appeal:- (i) The Ld. CIT(A) has erred in holding that the activity of M/s. Miller Dredging Company is not a business activity but mere leasing of dredger and hence can not be taxed as such. (ii) The Ld. CIT(A) erred in placing reliance on the pre-contractual activity of M/s. Jaisu Shipping Co. Pvt. Ltd. rather than the obligation in the actual contract in arriving at a decision that no business activity was performed by M/s. Miller Dredging Company Inc. BVI. (iii) The CIT(A) has further erred in holding that the foreign company did not have any business connection or any source of business income in India in spite of clear evidence to the contrary. (iv) The Ld. CIT(A) has erred in law and on facts in holding that the entire establishment of the foreign party within the Indian territorial waters did not constitute PE of the foreign party for the purpose of section 9 o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... umstances of the case, the learned CIT(A) erred in holding that the Time Charter Hire charges paid by the appellant-company to the non-resident dredger owner in respect of dredgers taken on Time Charter Hire were in the nature of royalty as per provisions of section 9(1)(vi) of the I.T. Act and, therefore, the appellant-company was liable to deduct tax at source u/s. 195 of the IT. Act at the rates applicable to royalty payments. 4. On the facts and in the circumstances of the case, the learned CIT(A) erred in not admitting evidence assumed by him to be in the nature of additional evidence being audit reports and the documents forming part of the regular assessment proceedings before concerned Assessing Officer. 5. On the facts and in the circumstances of the case and without prejudice to the foregoing grounds of appeal, the learned CIT(A) erred in rejecting the claim of the appellant-company that even if it is assumed that there was a liability for deduction of tax at source on the appellant-company , any non-deduction of tax on its part was wholly and entirely attributable to a bonafide belief that there was no legal liability on the appellant-company to deduct tax at source and, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to 2011-12) 97. The Department has raised the following grounds of appeal:- ITA No. 26/Ahd/2014 (A.Y. 2011-12) 1. The Ld. CIT(A) has erred in law and on facts in holding that the activity of Miller Dredging Company is not a business activity but mere leasing of dredger and hence cannot be taxed as such. 2. The Ld. CIT(A) erred in placing reliance on the pre-contractual activity of M/s. Jaisu Shipping Co. Pvt. Ltd., rather than the obligation in the actual contract in arriving at a decision that no business activity was performed by M/s. Miller Dredging Company Inc. BVI. 3. The CIT(A) has further erred in holding that the foreign company did not have any business connection or any source of business income in India in spite of clear evidence to the contrary. 4. The Ld. CIT(A) has erred in law and on facts in holding that the entire establishment of the foreign party within the Indian territorial waters did not constitute PE of the foreign party for the purpose of section 9 of the I T Act, 1961. 5. Therefore the order of the Ld. CIT(A) deserves to be deleted and that of the AO restored. 6. Any other ground that may be urged at the time of hearing. ITA No. 27/Ahd/2014 (A.Y. 2010-11) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t at the overseas non-resident company does not have a permanent establishment in India. 99. The Department has filed an appeal against the order passed by Ld. CIT(A) holding that the non-resident company does not have a business connection in India. 100. We observe that issues for consideration and the grounds of appeal raised by the assessee in relation to Ld. CIT(A) holding that the non-resident company does not have a business connection / permanent establishment in India are similar to grounds raised by the Department for previous assessment years, which have been discussed in detail in the preceding paragraphs. 101. Accordingly, in the light of our observations made for the previous assessment years, we are of the considered view that the Ld. CIT(A) has correctly concluded that the overseas company does not have a business connection in India in terms of Section 9(1) of the Act and accordingly, we find no infirmity in the order of Ld. CIT(A) so as to call for any interference. 102. In the result, the appeal of the Department is dismissed for A.Ys. 2010-11 to 2011-12. 103. In the combined result, all the appeals filed by the Assessee (in ITA Nos. 30 to 37/Rjt/2012 for A.Y. 200 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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