SCHELLENBERG WITTMER ALONGWITH ITS PARTNERS, ATTORNEYS AT LAW, LOWENSTRASSE 19, P.O. BOX 1876, 8021 ZURICH, SWITZERLAND Vs. DIRECTOR OF INCOME TAX (INTERNATIONAL TAXATION) MUMBAI

JUDGEMENT

(1.) THE applicants are a partnership and its partners. The partnership is said to be in terms of the Swiss Code of Obligations. The partnership claims to be a Switzerland based law firm and all its partners are residents of Switzerland. It is submitted that the partnership and all its partners are tax residents of Switzerland. Siemens India Limited, a company incorporated in India and Shapoorji Pallonji & Co. Ltd., another company incorporated in India had a dispute which was referred for adjudication in terms of a construction Agreement entered into by them and in terms thereof. Siemens India Limited is a subsidiary of Siemens AG Germany. The construction Agreement provided that the Swiss law will govern the contract. The adjudication proceedings were initiated on 30.12.2009. A Swiss national was appointed as the adjudicator and the venue of adjudication was Lausanne, Switzerland. Siemens India Limited engaged the partnership on 15.2.2010 to represent it in the adjudication proceedings.

(2.) AS per the terms of the agreement, the activities to be carried on by the partnership are to be carried on in Switzerland and /or Germany. Except a site visit and an adjudication hearing in Mumbai between 21st and 24th September, 2010, no other activity is carried on in India by the partnership. The total time spent in India was 6 days between 19th September and 24th September, 2010.

(3.) THE partnership has raised invoices against Siemens India for the services thus far rendered to Siemens India. The applicants want to ascertain whether the fees received by the firm for legal services rendered outside India would be chargeable to tax in India. It is in that context that they approached this Authority with the present application under section 245Q of the Income -tax Act. By order dated 2.4.2012, this Authority allowed the application under section 245R(2) of the Act for giving rulings on the following questions: