Case nº A.A.R. No. 854 of 2009 of Authority for Advance Rulings, August 27, 2012 (case In Re: CTCI Overseas Corporation Limited, Hong Kong Vs)

PresidentP.K. Balasubramanyan, Chairman
Resolution DateAugust 27, 2012


P.K. Balasubramanyan, Chairman

  1. This is an application by the Revenue under Rule 19 of the Authority for Advance Rulings (Procedure) Rules, 1996. The said Rule reads:-

    (1) The Authority may, with a view to rectifying any mistake apparent from the record, amend any order passed by it before the ruling pronounced by the Authority has been given effect to by the Assessing Officer

    (2) Such amendment may be made suo motu or when the mistake is brought to its notice by the applicant or the Commissioner, but only after allowing the applicant and the Commissioner reasonable opportunity of being heard.

    According to the Revenue, overruling the contention of the applicant in AAR 854 of 2009, this Authority has held that the taxable unit in respect of the transaction relied on by the applicant is an Association of Persons within the meaning of section 2 (31) (v) of the Income-tax Act. Having so held, this Authority has gone on to rule that the transaction put forward by the applicant related to offshore supply of equipments and is not taxable in the country, proceeding as if the applicant alone is the assessee under the Act, and ignoring the effect of the finding earlier rendered that the recipient of the income is an Association of Persons. According to the Revenue, this is an error apparent on the face of the record or a mistake coming within the purview of Rule 19 and the ruling in that regard requires to be corrected.

  2. In the ruling dated 1.2.2009, it was held that since the applicant is not entitled to relief in terms of section 90(2) of the Act, the fiscal jurisdiction to tax the offshore supplies would be governed by the Act. It was thereafter that it was ruled that the amount received/receivable by the applicant from Petronet for offshore supplies in terms of the contract dated 17.11.2009 is not liable to tax in India under the provisions of the Act. It is submitted on behalf of the Revenue, that if the assessing unit is an AOP and one of the members of the AOP is a resident company as in this case, the actual ruling is clearly a mistake to be corrected to make the ruling consistent with the finding earlier rendered.

  3. This authority had referred to the decision of the Supreme Court in Ishikawajima-Harima to arrive at the conclusion that the income from the off-shore supplies are not chargeable to tax. In rendering that ruling, this authority has not specifically noticed the impact of the finding that the assessing unit under the...

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