DIT v. Morgan Stanley & Co.

292 ITR 416Supreme Court of India2007#210 most cited

What is DIT v. Morgan Stanley & Co. authority for?

A Permanent Establishment (PE) signifies a foreign enterprise's virtual projection into another country, with a fixed place PE existing where an MNE's business is wholly or partly carried on. A dependent agent PE requires the agent to act as such and/or have the authority to conclude contracts for the foreign enterprise under DTAA provisions.

360

judgments rely on this decision, according to BharatTax’s citation analysis of 366,470 Indian tax judgments — from 2011 to 2026.

Also referred to as

DIT v. Morgan Stanley & Co. · Morgan Stanley PE · 292 ITR 416 · Permanent Establishment DTAA · fixed place PE · dependent agent PE · Article 5 India-USA DTAA · authority to conclude contracts PE · outsourcing MNE · service PE · agency PE

Sections most often in play

Section 143(3)Section 234BSection 144C(13)Section 234ASection 270ASection 9(1)(vi)Section 271(1)(c)Section 5
Read the full judgment

Issues it is cited on

dependent agent peinstallation peagency peservice pefixed place peuse of equipmentprofit split methodsection 44dfunctional analysisfar analysismake available clausesection 44bb

Judgments citing DIT v. Morgan Stanley & Co.

Interwoven Inc. India Branch, Mumbai vs. ADIT (It) 3(1), Mumbai

ITA 56/MUM/2011[2006-07]Status: DisposedITAT Mumbai30 Nov 2016AY 2006-07

Bench: Shri Amit Shukla () & Shri Ashwani Taneja ()

Section 143(3)

…would not constitute PE. In this regard, reliance was placed on the judgment of Hon’ble Delhi High Court in U.A.E. Exchange Centre Ltd. v. Union of India (313 ITR 94). Similar principles were applied by the Supreme Court in the case of DIT v. Morgan Stanley (292 ITR 416), by the Authority for Advance Rulings in KT Corporation (181 Taxman 94) and by the Mumbai ITAT in Dy. DIT v. Staubli A.G. India Branch Office (40 SOT 14). 19. It was submitted that the assessee does not have a PE in India under the Agency PE of the assessee in India since mere provision of marketing services or making fee collection from custom…

ADIT (It) (2), Mumbai vs. Daimler Ag, Mumbai

ITA 7648/MUM/2013[2008-09]Status: DisposedITAT Mumbai28 Sept 2016AY 2008-09

Bench: Shri R.C. Sharma, Am & Shri Sandeep Gosain, Jm आयकर अपील सं./ I.T.A. No. 7648 & 7649/Mum/2013 ("नधा"रण वष" / Assessment Year: 2008-09 & 2009-10) Asst. Dit(It) -1(2), M/S. Daimler Ag Room No.119, 1St Floor, Scindia C/O Srbc & Associates 14Th Floor, The Ruby 29, बनाम/ House, N.M. Road, Ballard Estate, Mumbai-400 038. Senapati Bapat Marg Vs. Dadar (West) Mumbai-400 028. "थायी लेखा सं./जीआइआर सं./Pan/Gir No. Aabcd 2354C (अपीलाथ" /Appellant) (""यथ" / Respondent) :

For Appellant: Shri Hemen Chandariya
Section 143(3)Section 195Section 234B

…out by ld. AR and the operative para is reproduced below for the sake of convenience: 31. The following decisions cited by the assessee can be extracted for this purpose. “the decisions of the Hon’ble Supreme court in case of DIT vs. Morgon Stanley & Co Inc 292 ITR 416 (refer page 555,556&565) of Paper Book Volume III, wherein the Hon’ble apex court has observed that since the assessee did not conclude any contracts on behalf of morgan Stanley & Co. Inc. (MSCo), it did not have an agency PE in India. Similar view has also been taken by the Special Bench o Delhi Tribunal in case of Motorola Inc & Others v DCIT (…

DDIT, New Delhi vs. M/S. Mori Seiki Co. Ltd., New Delhi

In the result, the appeal of the department is dismissed

ITA 879/DEL/2012[2006-07]Status: DisposedITAT Delhi12 Sept 2016AY 2006-07

Bench: Sh. N. K. Saini, Am & Smt. Beena Pillai, Jm Ita No. 879/Del/2012 : Asstt. Year : 2006-07 Deputy Director Of Income Tax, Vs M/S Mori Seiki Co. Ltd., Circle-3(2), International Taxation 404A, World Trade Centre, New Delhi Barakhamba Road, Connaught Place, New Delhi-110001 (Appellant) (Respondent) Pan No. Aaecm1522E Assessee By : Sh. Harpreet Singh & Rohan Khare, Advs. Revenue By : Sh. Amrendra Kumar, Cit Dr Date Of Hearing : 24.06.2016 Date Of Pronouncement : 12.09.2016 Order Per N. K. Saini, Am:

For Appellant: Sh. Harpreet Singh & Rohan Khare, AdvsFor Respondent: Sh. Amrendra Kumar, CIT DR
Section 143(1)Section 143(3)

…tivities under same or similar conditions and dealing wholly independently (Arm’s Length Profits). The assessee has placed reliance on the commentary of OECD and also the decision of Hon’ble 4 Mori Seiki Co. Ltd. Supreme Court in the case of Morgan Stanley – 292 ITR 416 (SC). " In view of the judgment of Hon’ble Supreme Court no further profits can be attributed to the PE if the transactions between MS-BO and HO are at arm’s length.” 5. After considering the submissions of the assessee, the AO noted as under:- "a) The main argument of the assessee that the profits which are directly or indirectly attributable to…

M/S Instrumentarium Corporation Ltd., Kolkata vs. DDIT (It)-1(1), Kolkata

ITA 1549/KOL/2009[2004-05]Status: DisposedITAT Kolkata15 Jul 2016AY 2004-05

Bench: The Special Bench:

…not bind the Tribunal, it should be treated as having persuasive effect and should be given due consideration. Learned counsel then makes an interesting reference to the decision of Hon’ble Supreme Court, in the case of DIT Vs Morgan Stanley & Co Ltd [(2007) 292 ITR 416 (SC)], and contends that, in the light of this decision, the transfer pricing provisions cannot be applied on the facts of this case as long as the additional income, which is sought to be brought to tax by way of ALP adjustments, is otherwise subject to tax in India. He submits that this decision was rendered in the context of attribution of pro…

M/S. Zte Corporation, Gurgaon vs. ADIT, New Delhi

In the result, this ground is

ITA 1109/DEL/2014[2009-10]Status: DisposedITAT Delhi30 May 2016AY 2009-10

Bench: Shri S.V. Mehrotra : & Smt. Beena A. Pillai:

For Appellant: Shri Deepak Chopra AdvFor Respondent: Shri Sanjeev Sharma CIT(DR)
Section 133ASection 139Section 148

…ribution should be made. The submission is that TPO in the case of WebT India has accepted that the payment for market support service is at arm’s length and, therefore, in view of the decision of Hon’ble Supreme Court in the case of DIT Vs. Morgan Stanley 292 ITR 416, since the assessee had been remunerated on an arm’s length basis, no further profit could be attributed. We are unable to accept this plea of ld. counsel of the assessee because it is only after the survey operations were carried out that extensive involvement of PE came to light. 52. Ld. CIT(DR) has very rightly pointed out that all the sums…

DDIT, New Delhi vs. M/S Zte Corporation

In the result, this ground is

ITA 5974/DEL/2012[2004-05]Status: DisposedITAT Delhi30 May 2016AY 2004-05

Bench: Shri S.V. Mehrotra : & Smt. Beena A. Pillai:

For Appellant: Shri Deepak Chopra AdvFor Respondent: Shri Sanjeev Sharma CIT(DR)
Section 133ASection 139Section 148

…ribution should be made. The submission is that TPO in the case of WebT India has accepted that the payment for market support service is at arm’s length and, therefore, in view of the decision of Hon’ble Supreme Court in the case of DIT Vs. Morgan Stanley 292 ITR 416, since the assessee had been remunerated on an arm’s length basis, no further profit could be attributed. We are unable to accept this plea of ld. counsel of the assessee because it is only after the survey operations were carried out that extensive involvement of PE came to light. 52. Ld. CIT(DR) has very rightly pointed out that all the sums…

Zte Corporation vs. ADIT, New Delhi

In the result, this ground is

ITA 5871/DEL/2012[2005-06]Status: DisposedITAT Delhi30 May 2016AY 2005-06

Bench: Shri S.V. Mehrotra : & Smt. Beena A. Pillai:

For Appellant: Shri Deepak Chopra AdvFor Respondent: Shri Sanjeev Sharma CIT(DR)
Section 133ASection 139Section 148

…ribution should be made. The submission is that TPO in the case of WebT India has accepted that the payment for market support service is at arm’s length and, therefore, in view of the decision of Hon’ble Supreme Court in the case of DIT Vs. Morgan Stanley 292 ITR 416, since the assessee had been remunerated on an arm’s length basis, no further profit could be attributed. We are unable to accept this plea of ld. counsel of the assessee because it is only after the survey operations were carried out that extensive involvement of PE came to light. 52. Ld. CIT(DR) has very rightly pointed out that all the sums…

Zte Corporation vs. ADIT, New Delhi

In the result, this ground is

ITA 5870/DEL/2012[2004-05]Status: DisposedITAT Delhi30 May 2016AY 2004-05

Bench: Shri S.V. Mehrotra : & Smt. Beena A. Pillai:

For Appellant: Shri Deepak Chopra AdvFor Respondent: Shri Sanjeev Sharma CIT(DR)
Section 133ASection 139Section 148

…ribution should be made. The submission is that TPO in the case of WebT India has accepted that the payment for market support service is at arm’s length and, therefore, in view of the decision of Hon’ble Supreme Court in the case of DIT Vs. Morgan Stanley 292 ITR 416, since the assessee had been remunerated on an arm’s length basis, no further profit could be attributed. We are unable to accept this plea of ld. counsel of the assessee because it is only after the survey operations were carried out that extensive involvement of PE came to light. 52. Ld. CIT(DR) has very rightly pointed out that all the sums…

Mc Dermott Eastern Hemisphere Td ( Formelry Known As J. Ray Mc Dermott Eastern Hemisphere Ltd), Mumbai vs. DDIT (It) 3(1), Mumbai

In the result, appeals filed by the assessee and revenue are partly allowed for statistical purposes

ITA 7855/MUM/2011[2008-09]Status: DisposedITAT Mumbai06 May 2016AY 2008-09

Bench: Shri C.N. Prasad & Shri Ashwani Tanejaassessment Year: 1998-99 Adit (It) 1(2), M/S. J. Ray Mc Dermott Eastern Aayakar Bhavan, Hemisphere Ltd., बनाम/ M.K. Road, C/O. Price Waterhouse & Co. Cas Vs. Mumbai-400020 Trade World, ‘C’ Wing, 8Th Floor, Kamla Mills Compound, Lower Parel, Senapati Bapat Marg Mumbai- 400013 (Assessee) (Revenue) P.A. No. Aabcm1087F

…f the remitters. This Court held that the said activity was only in aid and support of the main activity of the Assessee in that case and, thus, such activity was auxiliary in character. In DIT (International Taxation) v. Morgan Stanley & Company Inc.: (2007) 292 ITR 416 (SC), the Supreme Court held that the back office operations carried on at an office would fall within the exclusionary clause of Article 5(3)(e) of the Treaty between India and United States which is also identically worded as Article 5(3)(e) of the DTAA. 28. The Black's Law Dictionary defines the word 'auxiliary' to mean as "aiding or supportin…

J Ray Mcdermott Eastern Hemisphere Ltd, Mumbai vs. DDIT (It) 3(1), Mumbai

In the result, appeals filed by the assessee and revenue are partly allowed for statistical purposes

ITA 8720/MUM/2010[2004-05]Status: DisposedITAT Mumbai06 May 2016AY 2004-05

Bench: Shri C.N. Prasad & Shri Ashwani Tanejaassessment Year: 1998-99 Adit (It) 1(2), M/S. J. Ray Mc Dermott Eastern Aayakar Bhavan, Hemisphere Ltd., बनाम/ M.K. Road, C/O. Price Waterhouse & Co. Cas Vs. Mumbai-400020 Trade World, ‘C’ Wing, 8Th Floor, Kamla Mills Compound, Lower Parel, Senapati Bapat Marg Mumbai- 400013 (Assessee) (Revenue) P.A. No. Aabcm1087F

…f the remitters. This Court held that the said activity was only in aid and support of the main activity of the Assessee in that case and, thus, such activity was auxiliary in character. In DIT (International Taxation) v. Morgan Stanley & Company Inc.: (2007) 292 ITR 416 (SC), the Supreme Court held that the back office operations carried on at an office would fall within the exclusionary clause of Article 5(3)(e) of the Treaty between India and United States which is also identically worded as Article 5(3)(e) of the DTAA. 28. The Black's Law Dictionary defines the word 'auxiliary' to mean as "aiding or supportin…

J Ray Mcdermott Eastrn Hemisphere Ltd, Mumbai vs. DDIT (It) 3(1), Mumbai

In the result, appeals filed by the assessee and revenue are partly allowed for statistical purposes

ITA 8718/MUM/2010[2007-08]Status: DisposedITAT Mumbai06 May 2016AY 2007-08

Bench: Shri C.N. Prasad & Shri Ashwani Tanejaassessment Year: 1998-99 Adit (It) 1(2), M/S. J. Ray Mc Dermott Eastern Aayakar Bhavan, Hemisphere Ltd., बनाम/ M.K. Road, C/O. Price Waterhouse & Co. Cas Vs. Mumbai-400020 Trade World, ‘C’ Wing, 8Th Floor, Kamla Mills Compound, Lower Parel, Senapati Bapat Marg Mumbai- 400013 (Assessee) (Revenue) P.A. No. Aabcm1087F

…f the remitters. This Court held that the said activity was only in aid and support of the main activity of the Assessee in that case and, thus, such activity was auxiliary in character. In DIT (International Taxation) v. Morgan Stanley & Company Inc.: (2007) 292 ITR 416 (SC), the Supreme Court held that the back office operations carried on at an office would fall within the exclusionary clause of Article 5(3)(e) of the Treaty between India and United States which is also identically worded as Article 5(3)(e) of the DTAA. 28. The Black's Law Dictionary defines the word 'auxiliary' to mean as "aiding or supportin…

J Ray Mcdermott Eastrn Hemisphere Ltd, Mumbai vs. DDIT (It), Mumbai

In the result, appeals filed by the assessee and revenue are partly allowed for statistical purposes

ITA 8717/MUM/2010[2005-06]Status: DisposedITAT Mumbai06 May 2016AY 2005-06

Bench: Shri C.N. Prasad & Shri Ashwani Tanejaassessment Year: 1998-99 Adit (It) 1(2), M/S. J. Ray Mc Dermott Eastern Aayakar Bhavan, Hemisphere Ltd., बनाम/ M.K. Road, C/O. Price Waterhouse & Co. Cas Vs. Mumbai-400020 Trade World, ‘C’ Wing, 8Th Floor, Kamla Mills Compound, Lower Parel, Senapati Bapat Marg Mumbai- 400013 (Assessee) (Revenue) P.A. No. Aabcm1087F

…f the remitters. This Court held that the said activity was only in aid and support of the main activity of the Assessee in that case and, thus, such activity was auxiliary in character. In DIT (International Taxation) v. Morgan Stanley & Company Inc.: (2007) 292 ITR 416 (SC), the Supreme Court held that the back office operations carried on at an office would fall within the exclusionary clause of Article 5(3)(e) of the Treaty between India and United States which is also identically worded as Article 5(3)(e) of the DTAA. 28. The Black's Law Dictionary defines the word 'auxiliary' to mean as "aiding or supportin…

J. Ray Mc Dermott Eastern Hemisphere Ltd, Mumbai vs. ADIT (It)-3(1), Mumbai

In the result, appeals filed by the assessee and revenue are partly allowed for statistical purposes

ITA 2227/MUM/2009[2002-2003]Status: DisposedITAT Mumbai06 May 2016AY 2002-2003

Bench: Shri C.N. Prasad & Shri Ashwani Tanejaassessment Year: 1998-99 Adit (It) 1(2), M/S. J. Ray Mc Dermott Eastern Aayakar Bhavan, Hemisphere Ltd., बनाम/ M.K. Road, C/O. Price Waterhouse & Co. Cas Vs. Mumbai-400020 Trade World, ‘C’ Wing, 8Th Floor, Kamla Mills Compound, Lower Parel, Senapati Bapat Marg Mumbai- 400013 (Assessee) (Revenue) P.A. No. Aabcm1087F

…f the remitters. This Court held that the said activity was only in aid and support of the main activity of the Assessee in that case and, thus, such activity was auxiliary in character. In DIT (International Taxation) v. Morgan Stanley & Company Inc.: (2007) 292 ITR 416 (SC), the Supreme Court held that the back office operations carried on at an office would fall within the exclusionary clause of Article 5(3)(e) of the Treaty between India and United States which is also identically worded as Article 5(3)(e) of the DTAA. 28. The Black's Law Dictionary defines the word 'auxiliary' to mean as "aiding or supportin…

J. Ray Mc Dermott Eastern Hemisphere Ltd, Mumbai vs. ADIT (It)-3(1), Mumbai

In the result, appeals filed by the assessee and revenue are partly allowed for statistical purposes

ITA 2226/MUM/2009[2000-2001]Status: DisposedITAT Mumbai06 May 2016AY 2000-2001

Bench: Shri C.N. Prasad & Shri Ashwani Tanejaassessment Year: 1998-99 Adit (It) 1(2), M/S. J. Ray Mc Dermott Eastern Aayakar Bhavan, Hemisphere Ltd., बनाम/ M.K. Road, C/O. Price Waterhouse & Co. Cas Vs. Mumbai-400020 Trade World, ‘C’ Wing, 8Th Floor, Kamla Mills Compound, Lower Parel, Senapati Bapat Marg Mumbai- 400013 (Assessee) (Revenue) P.A. No. Aabcm1087F

…f the remitters. This Court held that the said activity was only in aid and support of the main activity of the Assessee in that case and, thus, such activity was auxiliary in character. In DIT (International Taxation) v. Morgan Stanley & Company Inc.: (2007) 292 ITR 416 (SC), the Supreme Court held that the back office operations carried on at an office would fall within the exclusionary clause of Article 5(3)(e) of the Treaty between India and United States which is also identically worded as Article 5(3)(e) of the DTAA. 28. The Black's Law Dictionary defines the word 'auxiliary' to mean as "aiding or supportin…

M/S. J. Ray Mc Dermott Eastern Hemisphere Ltd, Mumbai vs. The ACIT It 3(1), Mumbai

In the result, appeals filed by the assessee and revenue are partly allowed for statistical purposes

ITA 2309/MUM/2006[2002-2003]Status: DisposedITAT Mumbai06 May 2016AY 2002-2003

Bench: Shri C.N. Prasad & Shri Ashwani Tanejaassessment Year: 1998-99 Adit (It) 1(2), M/S. J. Ray Mc Dermott Eastern Aayakar Bhavan, Hemisphere Ltd., बनाम/ M.K. Road, C/O. Price Waterhouse & Co. Cas Vs. Mumbai-400020 Trade World, ‘C’ Wing, 8Th Floor, Kamla Mills Compound, Lower Parel, Senapati Bapat Marg Mumbai- 400013 (Assessee) (Revenue) P.A. No. Aabcm1087F

…f the remitters. This Court held that the said activity was only in aid and support of the main activity of the Assessee in that case and, thus, such activity was auxiliary in character. In DIT (International Taxation) v. Morgan Stanley & Company Inc.: (2007) 292 ITR 416 (SC), the Supreme Court held that the back office operations carried on at an office would fall within the exclusionary clause of Article 5(3)(e) of the Treaty between India and United States which is also identically worded as Article 5(3)(e) of the DTAA. 28. The Black's Law Dictionary defines the word 'auxiliary' to mean as "aiding or supportin…

J.Ray Mc Dermott Eastern Hemisphere Ltd vs. The Jdit (It) 4

In the result, appeals filed by the assessee and revenue are partly allowed for statistical purposes

ITA 5302/MUM/2004[2000-01]Status: DisposedITAT Mumbai06 May 2016AY 2000-01

Bench: Shri C.N. Prasad & Shri Ashwani Tanejaassessment Year: 1998-99 Adit (It) 1(2), M/S. J. Ray Mc Dermott Eastern Aayakar Bhavan, Hemisphere Ltd., बनाम/ M.K. Road, C/O. Price Waterhouse & Co. Cas Vs. Mumbai-400020 Trade World, ‘C’ Wing, 8Th Floor, Kamla Mills Compound, Lower Parel, Senapati Bapat Marg Mumbai- 400013 (Assessee) (Revenue) P.A. No. Aabcm1087F

…f the remitters. This Court held that the said activity was only in aid and support of the main activity of the Assessee in that case and, thus, such activity was auxiliary in character. In DIT (International Taxation) v. Morgan Stanley & Company Inc.: (2007) 292 ITR 416 (SC), the Supreme Court held that the back office operations carried on at an office would fall within the exclusionary clause of Article 5(3)(e) of the Treaty between India and United States which is also identically worded as Article 5(3)(e) of the DTAA. 28. The Black's Law Dictionary defines the word 'auxiliary' to mean as "aiding or supportin…

Nortel Networks India International Inc vs. The Director of Income Tax-I

ITA/672/2014HC Delhi04 May 2016

Bench: HON'BLE DR. JUSTICE S.MURALIDHAR,HON'BLE MR. JUSTICE VIBHU BAKHRU

Section 143(3)Section 147Section 260A

…ITA 666/2014 & Ors. Page 1 of 57 IN THE HIGH COURT OF DELHI AT NEW DELHI % Judgment delivered on: 04.05.2016 + ITA 666/2014 M/S NORTEL NETWORKS INDIA INTERNATIONAL INC. ..... Appellant Through: Mr. Deepak Chopra, Advocate with Ms. Manasvini Bajpai, Advocate. versus THE DIRECTOR OF INCOME TAX -I ..... Respondent Through: Mr. N.P. Sahni, Senior Standing counsel with Mr. Nitin Gulati, Advocate.…

Nortel Networks India International Inc vs. The Director of Income Tax-I

ITA/689/2014HC Delhi04 May 2016

Bench: HON'BLE DR. JUSTICE S.MURALIDHAR,HON'BLE MR. JUSTICE VIBHU BAKHRU

Section 143(3)Section 147Section 260A

…ITA 666/2014 & Ors. Page 1 of 57 IN THE HIGH COURT OF DELHI AT NEW DELHI % Judgment delivered on: 04.05.2016 + ITA 666/2014 M/S NORTEL NETWORKS INDIA INTERNATIONAL INC. ..... Appellant Through: Mr. Deepak Chopra, Advocate with Ms. Manasvini Bajpai, Advocate. versus THE DIRECTOR OF INCOME TAX -I ..... Respondent Through: Mr. N.P. Sahni, Senior Standing counsel with Mr. Nitin Gulati, Advocate.…

Nortel Networks India International Inc vs. The Director of Income Tax I

ITA/666/2014HC Delhi04 May 2016

Bench: HON'BLE DR. JUSTICE S.MURALIDHAR,HON'BLE MR. JUSTICE VIBHU BAKHRU

Section 143(3)Section 147Section 260A

…ITA 666/2014 & Ors. Page 1 of 57 IN THE HIGH COURT OF DELHI AT NEW DELHI % Judgment delivered on: 04.05.2016 + ITA 666/2014 M/S NORTEL NETWORKS INDIA INTERNATIONAL INC. ..... Appellant Through: Mr. Deepak Chopra, Advocate with Ms. Manasvini Bajpai, Advocate. versus THE DIRECTOR OF INCOME TAX -I ..... Respondent Through: Mr. N.P. Sahni, Senior Standing counsel with Mr. Nitin Gulati, Advocate.…

Nortel Networks India International Inc vs. The Director of Income Tax-I

ITA/671/2014HC Delhi04 May 2016

Bench: HON'BLE DR. JUSTICE S.MURALIDHAR,HON'BLE MR. JUSTICE VIBHU BAKHRU

Section 143(3)Section 147Section 260A

…ITA 666/2014 & Ors. Page 1 of 57 IN THE HIGH COURT OF DELHI AT NEW DELHI % Judgment delivered on: 04.05.2016 + ITA 666/2014 M/S NORTEL NETWORKS INDIA INTERNATIONAL INC. ..... Appellant Through: Mr. Deepak Chopra, Advocate with Ms. Manasvini Bajpai, Advocate. versus THE DIRECTOR OF INCOME TAX -I ..... Respondent Through: Mr. N.P. Sahni, Senior Standing counsel with Mr. Nitin Gulati, Advocate.…