Search Results For: Article 12


Birla Corporation Limited vs. ACIT (ITAT Jabalpur)

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DATE: December 24, 2014 (Date of pronouncement)
DATE: December 31, 2014 (Date of publication)
AY: 2010-11 & 2011-12
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CITATION:
Though construction, installation and assembly activities are de facto in the nature of technical services, the consideration thereof will not be assessable under Article 12 but will only be assessable under Article 7 if an “Installation PE” is created under Article 5. As Article 5 is a specific provision for installation etc, it has to prevail over Article 12

On the question as to whether the said receipt for installation, commissioning or assembly etc activity can be assessed as “fees for technical services”, it is seen that the DTAA has a general provision in Article 12 for rendering of technical services and a specific provision in Article 5 for rendering of technical services in the nature of construction, installation or project or supervisory services in connection therewith. As there is an overlap between Article 5 and Article 12, the special provision (Article 5) has to prevail over the general provision (Article 12). What is the point of having a PE threshold time limit for construction, installation and assembly projects if such activities, whether cross the threshold time limit or not, are taxable in the source state anyway. If we are to proceed on the basis that the provisions of PE clause as also FTS clause must apply on the same activity, and even when the project fails PE test, the taxability must be held as FTS at least, not only the PE provisions will be rendered meaningless, but for gross versus net basis of taxation, it will also be contrary to the spirit of the UN Model Convention Commentary. Accordingly, though construction, installation and assembly activities are de facto in the nature of technical services, the consideration thereof will not be assessable under Article 12 but will only be assessable under Article 7 if an “Installation PE” is created

ADIT vs. Bartronics India Ltd (ITAT Hyderabad)

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DATE: January 27, 2014 (Date of pronouncement)
DATE: November 29, 2014 (Date of publication)
AY: 2009-10
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CITATION:
Consideration for use of software is not assessable as royalty under Article 12 of DTAA and s. 9(1)(vi)

(i) In order to qualify as royalty payment, it is necessary to establish that there is transfer of all or any rights (including the granting of any licence) in respect of copyright of a literary, artistic or scientific work. In

ITO vs. Bennet Coleman & Co. Ltd (ITAT Mumbai)

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DATE: November 12, 2014 (Date of pronouncement)
DATE: November 17, 2014 (Date of publication)
AY: 2007-08
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CITATION:
S. 9(1)(vii): Separate agreements for supply & installation cannot be regarded as one composite contract. However, as the installation is an "assembly" project, it will not constitute "fees for technical services". Even if such services are FTS u/s 9(1)(vii) they are excluded from taxation in India by Article 14 of the India-Swiss DTAA as the recipient has no PE in India

(i) It is undisputed that the mailroom equipment comprised of various units and was hence a complex equipment. The bid document clearly stipulated that the units/components of the mailroom equipment would have to be installed and commissioned by trained and

AMD Research & Development Center vs. DCIT (ITAT Hyderabad)

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DATE: October 22, 2014 (Date of pronouncement)
DATE: October 26, 2014 (Date of publication)
AY: 2007-08
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CITATION:
In view of the finding of the service-tax authorities that services were rendered, argument that amount paid is a reimbursement of actual cost without profit element is not acceptable and it is chargeable as “fee for included services”

Having held that the amount in question was remitted by the assessee company to ATI Technologies, Canada for certain benefits received by it in the form of services procured by ATI Technologies, Canada from Soctronics India Private Limited and provided

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