1. ITA No. 265/Delhi/07 for assessment year 1997-98

2. ITA No. 264/Delhi/07 for assessment year 2000-01

3. ITA No. 2824/Delhi/07 for assessment year 2001-02

4. ITA No. 2530/Delhi/06 for assessment year 2003-04

5. ITA No. 2975/Delhi/2007 for assessment year 2004-05

The question as to whether the learned CIT(A) erred in directing the Assessing Officer to exclude revenues in respect of the assessee’s projects, holding that the assessee did not have a PE in India concerning these projects, has been raised in the following appeals :—

1. ITA No. 105/Delhi/08 for assessment year 1998-99

2. ITA No. 4692/Delhi/07 for assessment year 1999-2000

3. ITA No. 1407/Delhi/2008 for assessment year 2002-03

4. ITA No. 2530/Delhi/2006 for assessment year 2003-04

5. ITA No. 2975/Delhi/07 for assessment year 2004-05

2. The assessee is a non-resident foreign company incorporated in South Korea. During the year under consideration, the assessee executed contracts with M/s. ONGC, M/s. Mazagaon Dock Ltd., M/s. Command Petroleum and M/s. Indian Oil Corporation Ltd. While working out the taxable income, the Assessing Officer took into account the total inside India revenue of the assessee at Rs. 1,84,50,32,018 and after reducing sub- contractors cost and salary expenditure of Rs. 83,32,140, income was estimated at the rate of 10 per cent on revenue of Rs. 101,18,01,878 i.e., at Rs. 10,11,80,188. Outside India receipts of the assessee at Rs. 1,37,84,39,047 were also taxed at the rate of 1 per cent, at Rs. 13,78,439. In the return of income, the assessee claimed that in respect of its three projects, i.e., B-121 Well Platform Project, HX-HY Platform Project and Second Oil Terminal Gulf of Kutch Project (IOCL), the assessee did not have a permanent establishment (PE) in India under the provisions of the Agreement for Avoidance of Double Taxation (‘DTAA’ for short) between India and South Korea; and that, therefore, the revenue in respect of each of these projects were not being offered for taxation. The Assessing Officer, however, rejected the assessee’s claim observing that the assessee NRC had not included the revenues of the said projects, claiming that the duration of each of these projects lasted less than 10 months and that, therefore, the revenues relating thereto was not assessable in accordance with Para 3 of Article 5 of DTAA between India and South Korea; that it had been claimed that the assessee’s activities were of installation project, construction, assembly etc., for which, duration of project, a specified period was must, so as to hold existence of PE; that the assessee had furnished certificates from the MDL only in respect of the B-121 Well Platform Project, which project as per the said certificate, commences on 20-10-1996 and was completed on 3-1-1997; that no evidence had been filed regarding the determination of the completion period of the other two projects; that the assessee had been maintaining an office at World Trade Centre, Cuffe Parade, Bombay right from 1983; that this was a full-fledged office manned by senior officers of assessee NRC; that it had executed several projects in India during the said period i.e., from the date of its opening office till date; that several projects were still in hand, that so, the assessee’s case would fall under Para 2 of Article 5 of DTAA and not under Para 3 thereof as claimed; that the assessee’s case was also covered under Par