GEMOLOGICAL RESEARCH (THAILAND) CO. LTD. ,THAILAND vs. THE ASSISTANT COMMISSIONER OF INCOME-TAX (INTERNATIONAL TAXATION) CIRCLE-2(3)(2), MUMBAI

Facts

The assessee, Gemological Research (Thailand) Co. Ltd., filed a return declaring nil income for AY 2014-15. The case was reopened under section 148 as it was believed the assessee earned business receipts, a portion of which was attributable to its Permanent Establishment (PE) in India.

Held

The Tribunal held that the assessee did not have a Permanent Establishment (PE) in India. The assessing officer and DRP had erred in determining that the Indian subsidiary, GIA India Laboratories Pvt. Ltd., constituted a PE for the assessee.

Key Issues

Whether the assessee has a Permanent Establishment (PE) in India, and whether the attribution of profits and estimation of gross profits are justified.