Law explaining formation of AOP & taxability of off-shore supply & services

Last updated: 01 May 2014

Court :
Delhi High Court

Brief :
The petitioner - Linde had formed a consortium with Samsung through MOU for jointly submitting a bid to secure a tender floated by OPAL to execute a project on turnkey basis. The proposal was accepted by OPAL. The consortium entered into an agreement with OPAL for carrying out work in accordance with the bid. Linde filed an application before the Assessing Officer under section 197 of the Actclaiming that no portion of the amount payable to Linde was liable to be subjected to withholding of tax under section 195 of the Act and that the amounts received/receivable by Linde for the said supplies and services were not chargeable to tax in India.The principal controversy which is required to be considered in the present petition is: whether in the given facts, Linde and Samsung constitute an Association of Persons within the meaning of ‘person’ as defined under section 2(31) of the Act? And, whether the income received/receivable by Linde for the supply of equipment, material and spares outside India and for rendering services outside India is taxable in India?

Citation :
Linde AG, LindeEngineering Division and ANR – Petitioners – versus - Deputy Directorof Income Tax- Respondent