|
 |
 |
 |
 |
 |
India-Australia DTAA - non-resident enters into multiple contracts with Indian Co - Service PE - Duration of totality of services furnished under different contracts to be aggregated for determing PE under Art 5(3)(c) and not contract-wise stay; Royalty income not to be split up to allocate a part to work done in Australia: Advance Ruling (See 'Breaking News' + '2009-TIOL-11-ARA-IT') N K Raghupathy, Addl Secy in Ministry of Consumer Affairs, appointed as new Chairman of Staff Selection Commission; Gear up to fight chemical terrorism! Crackdown on tax haven to benefit developing countries: OECD Top UN relief official heading for Lanka; 35 nations agree to coordinate export credit support to boost trade flows; CBEC issues transfer order of four Commissioners + 11 ACs/DCs; |
 |
|
 |
 |
 |
|
| Dear Member, Sending the following files: |
||
|
 |
 |
|
TIOL COMMENTARY Gear up to fight chemical terrorism; Crackdown on tax haven to benefit developing countries: OECD Chief; MIXED BUZZZ 35 nations agree to coordinate export credit support to boost trade flows; Top UN relief official heading for Lanka; |
- | ||
|
|
|
|
| |
 |
 |
|
| |
2009-TIOL-11-ARA-IT.pdf + ara story.pdf WorleyParsons Services Pty. Ltd (Dated: April 23, 2009) Income tax - India-Australia DTAA - Advance Ruling - Applicant is engaged in the business of providing professional services to energy and resource industries - enters into agreement with ONGC for reviewing and providing technical services in relation to various engineering contracts - main area of work was to finetune the technial specififcations for the bidders of the contract - deputes its personnel to work closely with the ONGC personnel - various teams of applicant visit India for different periods in relation to execution of different contracts - taxability of income under DTAA and domestic laws, largely under the two heads of royalties and business profits attributable to the PE - Applicant insists on contract-wise counting of period of stay of its personnel for determing the question of Service PE - held, ++ the applicant cannot be allowed to treat the expression 'services' in Clause (c) of Article 5(3) of the DTAA in a truncated manner of contract-wise counting. Firstly, various contracts involving rendering of services in India were with one party. Secondly, the contracts related to redevelopment of Bombay High South and North off-shore Oil Fields aimed at stepping up the recovery of oil and gas. The activities in connection with the contracts were to be carried out in and around Mumbai. Moreover, the nature of work and services are of the same pattern. Thus, from geographical and commercial point of view also, the services cannot be dissociated from each other for the purposes of Art 5(3)(c). The duration of the totality of services furnished under various contracts between the same parties during the 12 month period has to be taken into account. If so, the yardstick of 91 days stands satisfied, and the income attributable to the PE will be taxable in India. Royalty income - Applicant for tax only to the extent of income attributable to the operations on India and advocates application of principle of apportionment - held, ++ Theory of territorial nexus: To execute the contract, the applicant's employees were present in India for 22 days in the year 2002-03 for on-the-spot study, reviewing the documents and providing clarifications. The transfer of plan/design indisputably took place in India. Though the bulk of the work connected with preparation of plan/design and study report was done from Australia, there is sufficient territorial nexus with India and the profits derived from this contract are liable to be taxed under Section 5(2) read with section 9(1)(vi) of the IT Act on gross basis at 15%. It is not permissible to split up such royalty income by allocating part of it to the work done in Australia. :ADVANCE RULING AUTHORITY; DCIT, Chennai Vs M/s Anand Transport (Dated : January 23, 2009) Contractual liability crystallizes only when dispute is settled – Not deductible. Sec. 41(1) – AO cannot unilaterally add any credit entry as remission of liability Provision for unrealized bills arises on account of contractual liability. Contractual liability crystallizes only when the dispute is finally settled. Matter remitted to AO to verify the factual aspects in this background. Provision created in earlier years added by AO u/s 41(1) on the reasoning that three years have lapsed and hence the liability no longer exists. On appeal Tribunal held that unless and until the liability really ceased it cannot be said that the assessee had got any benefit. Addition cannot be made in such cases. Appeal by Revenue partly allowed.: CHENNAI ITAT; |
|
|
| |
|
|
|
| |
 |
 |
|
|
CBEC issues transfer order of four Commissioners; CBEC issues transfer order of 11 more AC/DCs;
SERVICE TAX SECTION M/s Daurala Organics Vs CCE, Meerut (Dated: March 23, 2009) ST - Management Consultant Service - Assessee deputes personnel to its group company for managing day to day work - demand raised and penalty imposed - held, services provided by the assessee fall under the head 'manpower supply' but it became taxable only from 16.6.2005 and since the demand relates to earlier period, it is not sustainable - Assessee's appeal dismissed :DELHI CESTAT; CCE & CC, Guntur Vs M/s CCL Products (India) Ltd (Dated: March 20, 2009) CE- CENVAT Credit – input services - Service Tax paid on Insurance Premium; repair of vehicles; AMC charges on telecom; courier charges - services have been received or rendered only in relation to the manufacture of final products – eligible for Credit. We find that all the services which are availed by the respondent are in respect of manufacturing activity i.e. manufacturing and exporting of coffee powder, which is their final product. We agree with the submissions made by the learned counsel for the respondent that these services have been received or rendered only in relation to the manufacture of final products. In view of this, since the issue is squarely covered by the ratio of the decision of Tribunal and Larger Bench, we uphold the impugned orders and reject the appeals filed by the revenue. :BANGALORE CESTAT;
CCE, Pune-II Vs M/s National Dyeing & Bleaching Works(Dated: January 23, 2009) Provisions regarding the determination of the annual production capacity have been held to be ultra vires section 3A of the CEA, 1944 by Madras High Court in case of Beauty Dyers 2003-TIOL-190-HC-Mad-CX and there is nothing on record to show that the said judgment has been stayed or modified or set aside – Penalty is not imposable under rule 96ZQ of CER, 1944 – Revenue appeal dismissed.:MUMBAI CESTAT; Shankarrao Mohite SSG Ltd Vs CCE, Pune (Dated: January 12, 2009) Notfn 47/94-CE(NT) – Benefit cannot be denied on the ground that the DTA clearances by a 100% EOU are governed by Chapter VA provisions in view of Tribunal decision in Kurt O' John Shoe Components 2003-TIOL-CESTAT-103-Del and Renuga Soft-X Towels 2007-TIOL-1554-CESTAT-Mad .:MUMBAI CESTAT; M/s Nirma Ltd Vs CCE, Ahmedabad-II (Dated: February 25, 2009) Central Excise - CENVAT Credit - demand of 10% amount on exempted goods - either separate records have been maintained in respect of some of the inputs or wherever credit has been taken, the same was reversed - demand of 10% amount not sustainable.:AHMEDABAD CESTAT;
CUSTOMS SECTION M/s Pushpanjali Silk Pvt Ltd Vs CC, Chennai (Dated: August 18, 2008) Customs – Import – Valuation – Contemporaneous Imports – Burden of proof - There is no finding or suggestion that the price declared is not genuine and that the importer under-declared the transaction value. In such a situation the AO is not authorized to choose a higher value for assessment of the imported goods. The evidence of contemporaneous imports from the same supplier produced by the appellant has to be followed in the absence of contemporaneous evidence to reject the transaction value with the revenue. The onus to prove that the transaction value is not genuine is on the revenue. (Para 8.1) :CHENNAI CESTAT; |
|
||
| |
|
|
|
| Regards Taxindiaonline.com Limited |
