DCIT (IT) -3.1.2, INCOME TAX OFFICE, KAUTILIYA BHAWAN vs. LINKLATERS AND PAINES , MUMBAI

The department is in appeal before us and has raised following grounds of appeal: i. “Whether on the fact and in the circumstances of the case and in taw the Ld. CIT(A4) is Justified in holding that assessee can be treated as resident of United Kingdom within the meaning of DTAA between India and UK despite the fact thar it is fiscally transparent entity in UK and hence not taxable in the UK? ii. Whether on the fact and in the circumstances of the case and in law the Ld. CIT(4) is Justified in holding that the income of the assessee is not taxable in India as it is not having any permanent establishment in term of Article — 5(2)(k)(i), without considering that the receipts of the assessee is fees for technical services as per meaning of section 9(1)(vii), Explanation 2 and therefore is taxable on gross basis under section 1154 of the Income Tax Act. iii. Whether on the fact and in the circumstances of the case and in law the CIT(A) is justified in holding that receipts from consultancy services and reimbursement does not fall in the category of fee for technical services under India-UK DTAA, without considering that the provision of DTAA between India and UK are not available fo the assessee as it is not a “person " as per Article 3(1 )(f) of the DTAA and is not a resident of any of the two contracting States within the meaning of Article 4(1) of the DTAA and was not liable to taxation in the UK. iv. Whether on the fact and in the circumstances of the case and in law the CIT(A) is justified in holding that the income from services earned by the assessee is not taxable due to absence of PE despite the provision of Explanation to section 9.”