Case Law Details
Assessee is employed with Zaklady Farmaceutyczne Polpharma SA’s at its office at Bangalore from 14.6.2004. From 1.6.2005, the Assessee was appointed as Business Development Director at Bangalore in India. The Assessee received gross salary of US $ 24,093 (equivalent to Rs 10,86,950/-) in AY 2005-06 and US $ 18,836 (equivalent to Rs 8,15,795) in AY 2006-07. The Assessee has furnished certificate dated 25th August 2005 issued by Polpharma and which is placed at page 98 of the paper book which certifies that the Assessee has been appointed by the company as ‘Service Provider’ whose category in the set up of the organization falls under the Top official Employee. The Assessee has also placed at page 108 of the Paper book the co-operation agreement dated 14.12.2004 concluded between the Assessee and Zaklady Farmaceutyezne Polpharma SA. According to this agreement, the assessee has been referred to as ‘Service provider’ and he shall support establishing and preparing organization of the Company’s representative office at Bangalore by 31st May 2005. The Assessee has also placed on page 134 of the Paper Book, certificate dated 14.6.2006 issued by polpharma certifying the salary paid to the assessee. It also states that the assessee is providing service to the company as ‘service provider’ and the salary paid to the assessee. In view of these facts, the dispute that has to be decided is whether the Assessee can be considered as ‘Top Level Managerial Person’ so as to become entitled to the benefit of Article 17(2) of the DTAA between India and Poland. It is a fact that the assessee was employed as ‘Service Provider’ and during the period under dispute he was providing the service from Bangalore in India. As per the Co¬operation agreement dated 14.12.2004 entered into between the assessee and the Polish Company, the function of the assessee was ‘to support establishing and preparing organization of the company’s representative office in India by the date of 31st May 2005’. We are of the view that the function to support establishing and preparing organization can at best be termed as a management function but cannot be equated with ‘Top Level Managerial Position’. The term ‘Top Level Managerial Position’ has not been defined in DTAA. Business dictionary.com defines top management as ‘The highest ranking executives (with titles such as Chairman/Chairperson, Chief Executive Officer, Managing Director, President, executive Directors, executive Vice Presidents etc.) responsible for entire enterprise. Top management translates the policy (formulated by the Board of Directors) into goals, objectives and strategies and projects a shared vision of future. It makes decisions that affect everyone in the organization and is held entirely responsible for the success and failure of the enterprise.’
INCOME TAX APPELLATE TRIBUNAL, AHMEDABAD
I.T.A. No. 2190/AHD/2009
I.T.A. No. 2191/AHD/2009
(Assessment Year: 2005-06 & 2006-07)
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