Law:

Section:

Section 9 of the Income-tax Act, 1961 - Income - Deemed to accrue or arise in India - Applicant is an Indian company engaged in manufacturing of cables, electrical and automotive wire and bronze type cables - It formed a consortium with a Korean company with a view to bid for four tenders invited by KPTCL for setting up fair specified transmission lines on turnkey basis - According to consortium agreement, applicant was to act as leading company on winning contract and parties were jointly and severally bound for successful performance of contract and to be fully responsible for design, manufacture, supply and successful performance of equipments in accordance with contract - Consortium having won contract, four separate contracts were awarded to applicant under different letters of award - As per letter of award offshore supplies shall be responsibilities of Korean company-property in goods supplied by that company from Korea under four contracts will pass to applicant outside India, i.e., before goods entered customs frontiers of India - Whether, on facts, amount paid by applicant to Korean company in respect of offshore supply of equipments is liable to tax in India in hands of Korean company - Held, no CASE REVIEW Ishikawajima-Harima Heavy Industries Ltd. v. DIT[2007] 288 ITR 408/158 Taxman 259 (SC)followed & relied upon. CASES REFERRED TO Ishikawajma-Harima Heavy Industries Ltd. v. DIT[2007] 288 ITR 408/158 Taxman 259 (SC) (para 3). N. Venkataraman, Taranpreet Singh, Akil Sambar, Hitesh Jain and Atul Awasthi for the Applicant. Ms. Meera Srivastava for the Department. RULING 1. The applicant is a company incorporated in India, engaged in manufacturing of cables, electrical & automotive wire and bronze type cables. The applicant formed a consortium with M/s LS Cables Limited, Korea on 22-6-2007 with a view to bid for four tenders invited by the Karnataka Power Transmission Corporation Ltd., (KPTCL) for setting up four specified transmission lines on turnkey basis. According to the consortium agreement, the applicant was to act as the leading company on winning the contract and the parties were jointly and severally bound for the successful…

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