Director Of Income Tax(It) Ii v. M/S. Bunge Agribusiness Singapore Pte Limited

ASN IN THE HIGH COURT OF JUDICATURE AT BOMBAY ORDINARY ORIGINAL CIVIL JURISDICTION INCOME TAX APPEAL (L) NO.1887 OF 2012WITH INCOME TAX APPEAL (L) NO.1888 OF 2012 Director of Income Tax(IT) II.v. M/s. Bunge Agribusiness Singapore Pte Limited. ..Appellant. ..Respondent. Mr.Tanveer Singh for the Appellant. Mr. R. Murlidhar with A. K. Jasani for the Respondent. CORAM : J.P. DEVADHAR AND M.S. SANKLECHA, JJ. DATE : 14[th] February, 2013. PC: In these appeals by the revenue, following re-framed question of law has been raised for our consideration. Whether on the facts and in the circumstances of the case and in law the Tribunal was justified in holding that amount received in respect of administrative and operation support services is taxable under Article 7 of DTAA between India and Singapore? ASN 2) In these appeals the case of the revenue is that the respondent-assessee received income from its 100% subsidiary in India as fees for technical services. The Assessing Officer held that the fees for technical services are taxable under Article 12 of Double Taxation Avoidance Agreement entered into between Singapore and India (DTAA). Without prejudice to the above, in any event, the Assessing Officer held that fees for technical services could be taxed under Article 7 of the DTAA on the ground that the respondent has rendered services in India and has permanent establishment in India.any event, the Assessing Officer held that fees for technical services could be taxed under Article 7 of the DTAA on the ground that the respondent has rendered services in India and has permanent establishment in India. 3)In appeal, the Tribunal by impugned order restored the matter to the Assessing Officer with directions to the the matter to the Assessing Officer with directions to the Assessing officer to assess the respondent-assessee under Article 7 of the DTAA after giving opportunity of personal hearing. The Tribunal also records the fact that the assessee as well as revenue did not dispute the existence of the Permanent Article 7 of the DTAA after giving opportunity of personal hearing. The Tribunal also records the fact that the assessee as well as revenue did not dispute the existence of the Permanent ASN Establishment of the respondent assessee in India. In view of the above, the Tribunal came to a conclusion that Article 7 of the DTAA would be applicable and remanded it to the Assessing officer for fresh assessment after necessary verification of facts. 4)The grievance of the revenue is that the order of the Tribunal while remanding the matter has not given any reasons as to why the Article 7 of the DTAA is applicable and therefore, the same is not sustainable. The submission is that the amounts attributable to the effective connection with the Permanent Establishment has not been discussed. same is not sustainable. The submission is that the amounts attributable to the effective connection with the Permanent Establishment has not been discussed. 5)We find that the Assessing Officer has in the alternative held that Article 7 of the DTAA is applicable and that the respondent has a Permanent Establishment in India. Before the Tribunal also the revenue did not dispute the existence of a service Permanent Establishment in India as also the fact that the Assessing Officer had held that Article 7 of the DTAA would alternative held that Article 7 of the DTAA is applicable and that the respondent has a Permanent Establishment in India. Before the Tribunal also the revenue did not dispute the existence of a service Permanent Establishment in India as also the fact that the Assessing Officer had held that Article 7 of the DTAA would ASN be applicable. On these facts the Tribunal has remanded the issue to the Assessing officer with a direction to assess the respondent under Article 7 of DTAA. It is at that point of time, the ASN be applicable. On these facts the Tribunal has remanded the issue to the Assessing officer with a direction to assess the respondent under Article 7 of DTAA. It is at that point of time, the Assessing Officer would consider all facts including the quantum of fees for technical services being effectively connected with the Permanent Establishment in India. 6) In view of the above, we see no reason to entertain the proposed question of law. 7)Accordingly, both the appeals are dismissed with costs.costs. (M.S.SANKLECHA, J.) (J.P. DEVADHAR, J.)