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THE COMMISSIONER OFINCOME TAX -INTERNATIONAL TAXATION-3 Appellant
Through: Mr. Ruchir Bhatia, Sr. Standing Counsel.
Through: Mr. Nageswar Rao and Mr. Purushottam Anand,Advocates.
THE COMMISSIONER OFINCOME TAX -INTERNATIONAL TAXATION-2 Appellant
Through: Mr. Ruchir Bhatia, Sr. Standing Counsel.
Through: Mr. Nageswar Rao and Mr. Purushottam Anand,Advocates.
HON'BLE MR.JUSTICE ANUP JAIRAM BHAMBHANI
26.11.2018 The first issue and question raised by the Revenue in these appeals under Section 260A ofthe Income Tax Act, 1961 is covered by the decision of Delhi High Court in Nortel Networks India
Internationallnc. Vs.DirectorofIncome Tax,(2016)386ITR353.
ORDER
2. Learned counsel for the Revenue has submitted that the aforesaid decision interprets and applies the Double Taxation Avoidance Agreement between India and the United States of 2018:DHC:8337-DB CD America. In the present case,Double Taxation Avoidance Agreement between India and Singapore would be applicable. Our attention is drawn to clause 4 to Article 5 of the Double Taxation Avoidance Agreement between India and Singapore,which reads as under:- "4. An enterprise shall be deemed to have a permanent establishment in a Contracting State and to carry on business through that permanent establishment if it carries on supervisory activities in that Contracting State for a period of more than 183 days in any fiscal year in connection with a building site or construction, installation or assembly project which is being undertaken in that Contracting State."
3. We need not examine applicability ofclause 4 to Article 5 for we find that the Assessing Officer in the assessment order has not factually elucidated and stated why and how the conditions mentioned for invoking this clause were satisfied. The requirements stipulated relate to supervisory activities, which should be for more than 183 days in a fiscal year. Learned Standing Counsel for the Revenue was unable to point out and state the relevant paragraph ofthe assessment order or the first appellate order recording that the condition of 183 days was satisfied. Our attention was drawn to paragraph 2d ofthe assessment order(page 252)ofthe paper book in ITA No.1086/2018, which reads as under:- "d. Under Article 5 (4) as the expats supervises the project of installation in India in terms of various agreements." The aforesaid noting made by the Assessing Officer refers to Article 5(4)and the factum that expats were supervising the project of installation in India in terms of various agreements. It does not specifically point out and state how the conditions of clause 4 to Article 5 were satisfied.
4. Counsel forthe respondent-assessee,who is presenton advance notice,has also relied upon paragraph 74 ofthe decision in the case of NortelNetworksIndiaInternationallnc.(supra). However,we need not examine and go into the said aspect in the absence of specific factualfinding by the Assessing Officer with regard to satisfaction of the requirements stated in clause 4to Article 5.
5. Thesecond issue raised inthese appealsis whetherthe paynient for software was taxable as royalty under Article 12 of the India- Singapore Double Taxation Avoidance Agreement. This issue is also covered against the Revenue vide decision of Delhi High Court in CommissionerofIncome Tax Vs.ZTE Corporation,(2017)392ITR 80(Del).
6. As the issues raised in the present appeal are covered against the Revenue, we hold that no substantial question oflaw arises for consideration. The appeals are dismissed without any order as to costs. SANJTVKHANNA,J. ANUP JAIRAINMITAMBHANI,J NOVEMBER 26,2018 NAfVKR Y