NATIONAL PETROLEUM CONSTRUCTION Vs. DIRECTOR OF INCOME TAX

JUDGEMENT

(1.) These appeals have been filed under Section 260A of the Income Tax Act, 1961 (hereafter the 'Act') calling into question orders dated 5th October, 2012 and 31st January, 2013 passed by the Income Tax Appellate Tribunal (hereafter the 'ITAT') in ITA No. 5168/Del/2010 and ITA No. 5763/Del/2011 respectively. The said appeals were filed by the Assessee assailing the assessment orders dated 26th October, 2010 and 18th November, 2011 for the assessment years (AY) 2007 -08 and 2008 -09 respectively. Whilst ITA No. 143/2013 and 144/2013 have been preferred by the Assessee, ITA 795/2014 and 533/2013 have been preferred by the Revenue.

(2.) The controversy involved in the present appeals principally relates to the taxability of income earned by the Assessee in respect of a contract entered into by it with ONGC Limited, a public sector enterprise (hereafter 'ONGC').The aforesaid contract entailed designing, engineering, procurement, fabrication of fully loaded offshore platform and its installation, testing and commissioning at an offshore facility of ONGC. According to the Revenue, the income from the said contract is liable to be taxed in India as the Assessee is stated to have a Permanent Establishment (PE) in India. According to the Assessee, its income from the contract in question is not taxable under the Act by virtue of the Double Taxation Avoidance Agreement between India and United Arab Emirates (UAE) (hereafter referred to as the 'DTAA'). The Assessee claims that it does not have a PE in India and further, in any event, the income from fabrication and supply of platform is not taxable as the same pertains to the Assessee's activities outside India.

(3.) Whilst the ITAT had rejected the Assessee's contention that it does not have a PE in India, it accepted the Assessee's contention that the contractual receipts from ONGC were separable and the amount received for fabrication and supply of platform outside India was not taxable under the Act. This has led both the Assessee and the Revenue to assail the orders passed by the ITAT.