SWISS RE ASIA PTE LTD,SINGAPORE vs. DEPUTY COMMISSIONER OF INCOME TAX, (INTERNATIONAL TAXATION) CIRCLE - 4(2)(2), MUMBAI, MUMBAI

ITA 3178/MUM/2023Status: DisposedITAT Mumbai20 November 2025AY 2020-2134 pages
AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that the assessee does not have any Permanent Establishment (PE) in India, whether as a fixed place PE, service PE, or dependent agency PE, in relation to its reinsurance business (run-off portfolio) or its retrocession business with SRIB. Consequently, the reinsurance premium from Indian cedents and the retrocession premium from SRIB are not taxable in India as business profits. The Tribunal further held that the service income received by the assessee from SRIB and SRGBS does not qualify as Fees for Technical Services (FTS) under Article 12 of the India-Singapore tax treaty and is also not taxable as business income in the absence of any PE. The substantive additions made by the AO and sustained by the DRP on account of alleged PE and FTS for both assessment years were deleted. The issues relating to attribution of profits and the rate of tax on alleged FTS were rendered academic. The grounds regarding TDS credit, interest under Section 244A, and refund adjustments were restored to the file of the AO for limited verification and consequential relief. The jurisdictional grounds relating to limitation were left open and treated as academic. Grounds relating to interest under Sections 234A and 234B were held to be consequential, and grounds relating to initiation of penalty under Section 270A were dismissed as premature and infructuous. The ratio decidendi is that the location of key entrepreneurial risk-taking functions, underwriting, and capital deployment determines the situs of business profits and the existence of a PE, and routine support services do not constitute FTS.

What were the facts?

The assessee, Swiss Re Asia Pte Ltd (SRAPL), Singapore, is appealing against final assessment orders for Assessment Years (AY) 2020-21 and 2021-22. The appeals arise from directions by the Dispute Resolution Panel (DRP) under Section 144C of the Income Tax Act, 1961. The core dispute concerns the taxability of reinsurance premium (Rs. 422,87,22,703 for AY 2020-21 and Rs. 3,699,288,184 for AY 2021-22) earned from Indian cedents under a 'run-off portfolio', and retrocession premium (Rs. 8,5116,158,941 for AY 2020-21 and Rs. 17,328,179,294 for AY 2021-22) earned from Swiss Reinsurance Company Limited India Branch (SRIB). The Assessing Officer (AO) treated these as income attributable to a business connection and Permanent Establishment (PE) in India. Additionally, service income from SRIB and Swiss Reinsurance Global Business Solutions India Private Limited (SRGBS) was treated as Fees for Technical Services (FTS). The assessee contends that all key entrepreneurial risk-taking functions are performed in Singapore. The Tribunal noted that similar issues for AY 2018-19 and 2019-20 were decided in favour of the assessee by co-ordinate benches.

What were the issues?

1. Whether the assessee has a Permanent Establishment (PE) in India under Article 5 of the India-Singapore Double Taxation Avoidance Agreement (DTAA) and a business connection under Section 9(1)(i) of the Income Tax Act, 1961, in relation to reinsurance premium earned from Indian cedents (run-off portfolio) and retrocession premium earned from SRIB, making such income taxable in India. 2. Whether the service income received by the assessee from SRIB and SRGBS constitutes Fees for Technical Services (FTS) under Article 12 of the India-Singapore DTAA, making it taxable in India. 3. Whether the assessment orders are barred by limitation under Section 153 of the Act. 4. Whether the assessee has been granted short credit for Tax Deducted at Source (TDS) and short grant of interest under Section 244A for both assessment years. 5. Whether certain amounts were erroneously treated as refunds already issued. Assessee's contentions: - The assessee argued that all critical underwriting and risk-taking functions for both the run-off portfolio and retrocession business are performed in Singapore, and the capital required is maintained there. Therefore, no PE exists in India. - Service income does not qualify as FTS as it relates to routine support services. - The revenue's case is covered by earlier decisions in its own case for AY 2018-19 and 2019-20, and by decisions in the cases of Swiss Reinsurance Company Limited and RGA International Reinsurance Company Designated Activity Company. - Grounds relating to limitation, TDS credit, interest under Section 244A, and refund adjustments are factual and require verification. Revenue's contentions: - The revenue contended that the assessee has a business connection in India and a PE in India, making the reinsurance and retrocession premiums taxable. It also argued that service income is taxable as FTS.

Which sections of the Income-tax Act were involved?

Section 9(1)(i),Section 144C,Section 153,Section 199,Section 244A,Section 234A,Section 234B,Section 270A

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, ‘I’ BENCH

Before: SHRI AMIT SHUKLA & SHRI GIRISH AGRAWAL

For Appellant: Shri Anish Thacker & Shri, Shri Satya Pal Kumar, CIT
For Respondent: Shri Anish Thacker & Shri, Shri Satya Pal Kumar, CIT
Hearing: 03/11/2025Pronounced: 20/11/2025

PER AMIT SHUKLA (J.M): These two appeals by the assessee, Swiss Re Asia Pte Ltd Singapore, arise from the final assessment orders passed for assessment years 2020-21 and 2021-22 pursuant to directions of the Dispute Resolution Panel under section 144C of the Income tax Act 1961. In the grounds of appeal assessee has raised various grounds including challenging that the impugned order is barred by limitation however, on merits assessee has merely challenged that re-insurance premium ITA No.3178/Mum/2025 & 4092/Mum/2025 Swiss Re Asia Pte Ltd., amounting to Rs.422,8

The order continues below.

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