Law:

Section:

Section 90 of the Income-tax Act, 1961, read with article 5 of the Double Taxation Avoidance Agreement between India and Singapore [Permanent establishment] - Double taxation relief - Where agreement exists - Under Article 5.3, to constitute a permanent establishment, non-resident should work in India for 183 days - Whether duration test for installation and assembly projects cannot be construed to be read for all projects that do not pass test of cohesiveness, interconnection and interdependence - Held, yes - Applicant is a Singaporean company - It has secured four work orders in India - Scope of work under these projects is similar and requires erection and installation of certain heavy equipments at site of customers - All projects are independent projects and there is no interconnection and interdependence among them - Whether there being no interconnection among four contracts, period of contracts cannot be aggregated - Held, yes - Whether since duration of each of projects executed in financial year 2010-11 does not exceed 183 days, applicant cannot be said to have a PE in terms of article 5.3 - Held, yes - Whether, therefore, income earned by applicant from its activities of execution of four installation projects is not liable to tax in India - Held, yes [In favour of assessee] FACTS The applicant is a company formed in Singapore. It has secured four work orders in India; two in the financial year 2009-10 and two in the financial year 2010-11, the applicant submits that these four projects are independent of each other and were secured through independent work orders. The work orders for each of these projects refer to erection of equipment and would constitute installation and assembly projects. The applicant submits that as the income from the execution of these projects is in the nature of business profits, it would be taxable in India as per article 7.1 of the DTAA only if it has a Permanent Establishment in India and there can be considered to have a Parmanent Establishment only if each of these four installation projects continues for a period of more than 183 days individually in any previous year in terms of article 5.3 of the DTAA. On these…

Deprecated: trim(): Passing null to parameter #1 ($string) of type string is deprecated in /home/digixyei/sldsystempk.com/view/master-layout/view_case.php on line 492