CIT Vs. M/s BKI/HAM v.o.f. (Uttarakhand High Court)– Tribunal in the assessment order 1995-96 as well as the appellate authority in the assessment order 1994-95 have categorically given a finding of fact that the entire duration of the contract was from 27th December, 1993 till 26th June, 1994, i.e., less than six months. Article 5 (3) of the treaty provided that in order to constitute a permanent establishment such site or project should continue for a period of more than six months.
Such site or project, in our opinion, is provided under Article 5 (2) of the treaty and, therefore, the site or project provided under Article 5 (2) should continue for a period of more than six months in order to constitute a permanent establishment. Since a categorical finding of fact has been given by the appellate authority that the contract was for less than six months, it becomes absolutely clear that the assessee did not have a permanent establishment in India as per Article 5 (3) of the treaty. The court is of the opinion that Article 5 (3) provides a specific provision which covers the provision of Article 5 (2) of the treaty. The Court is of the opinion that the specific provision would prevail over the general provision. Consequently, the court is of the opinion that no permanent establishment was constituted by the assessee in India during the assessment year in question.
IN THE HIGH COURT OF UTTARAKHAND AT NAINITAL
