“permanent establishment”

International TaxSection 9 / DTAA Article 5Section 9 / DTAA Article 51,497 judgments

The decision most relied on for permanent establishment is DIT v. Morgan Stanley & Co. (292 ITR 416), cited in 360 judgments on BharatTax.

Leading authorities on permanent establishment

DIT v. Morgan Stanley & Co.

292 ITR 416 · 2007 · Supreme Court

360

citing judgments

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.

DIT v. Nokia Networks OY

358 ITR 259 · 2013 · High Court

276

citing judgments

Payments for the supply of software along with telecom equipment are not in the nature of royalty if they are for the use of a copyrighted article, not the copyright itself. Such payments are not taxable in India in the absence of a Permanent Establishment (PE).

DIT v. Infrasoft Ltd.

39 Taxmann.com 88 · 2013 · High Court

269

citing judgments

Payments for the use of copyrighted software, without the transfer of any rights in the underlying copyright itself, do not constitute 'royalty' under the Income-tax Act or tax treaties. Such payments are often treated as business income, taxable only if a permanent establishment exists.

ONGC v. CIT

376 ITR 306 · 2015 · Supreme Court

241

citing judgments

Income derived by a non-resident for services related to mineral oil operations, falling under the presumptive taxation regime of Section 44BB, cannot simultaneously be treated as fees for technical services under Section 9(1)(vii). The specific presumptive provisions override the general FTS definition, particularly when DTAA applies.

Motorola Inc. v. Dy. CIT

95 ITD 269 · 2005 · High Court

213

citing judgments

Revenue must demonstrate the existence of a Permanent Establishment (PE) of a foreign enterprise in India, including establishing that transactions underlying a Dependent Agent PE were not at arm's length. Income from the sale of goods is not taxable in India if title and risk in the goods pass outside India.

(i) Formula One World Championship Ltd. v. CIT

394 ITR 80 · 2017 · Supreme Court

200

citing judgments

This case provides foundational principles that illuminate the contours of the concept of 'Permanent Establishment' (PE) under tax treaties, especially regarding a 'fixed place' PE.

DIT v. Morgan Stanley Co. Inc.

399 ITR 34 · 2017 · Supreme Court

162

citing judgments

Once a transfer pricing analysis has been undertaken for an Indian associated enterprise, no further profits are attributable to it as a Permanent Establishment, thereby extinguishing the need for additional profit attribution.

Sir Kikabhai Premchand v. CIT

24 ITR 506 · 1953 · Supreme Court

156

citing judgments

One cannot make a taxable profit or loss from transactions with oneself, as profit only arises from dealings with external third parties, even when transferring assets between different accounts or divisions of the same entity.

Judgments citing permanent establishment

Cochin International Airport Limited, Cochin vs. DCIT Corporate Circle 1(1), Cochin

In the result, all the appeals filed by the assessee are allowed

ITA 721/COCH/2023[2006-07]Status: DisposedITAT Cochin23 Sept 2025AY 2006-07

Bench: Shri Inturi Rama Rao & Shri Soundararajan K.

For Appellant: Shri Gopi K, CAFor Respondent: Shri Omanakuttan, Snr. AR

Section 195Section 201Section 9(1)(i)Section 9(1)(vii)

business income but could be taxed as such only if the entity has a Page 4 of 8 ITA Nos. 720 to 724/Coch/2023 permanent establishment in India. The Ld.CIT(A) had relied on the order of the Hon’ble Bangalore Bench of the Tribunal in the case

Cochin International Airport Limited, Cochin vs. DCIT Corporate Circle 1(1), Cochin

ITA 720/COCH/2023[2005-06]Status: DisposedITAT Cochin23 Sept 2025AY 2005-06

Bench: Shri Inturi Rama Rao & Shri Soundararajan K.

For Appellant: Shri Gopi K, CAFor Respondent: Shri Omanakuttan, Snr. AR

Section 195Section 201Section 9(1)(i)Section 9(1)(vii)

income of the non-resident arising in India would be business income but could be taxed as such only if the entity has a permanent establishment in India. The Ld.CIT(A) had relied on the order of the Hon'ble Bangalore Bench of the Tribunal in the case

Siemens Aktiengesellschaft, Mumbai vs. Asstt. CIT (International Taxation)-Circle-4(2)(1), Mumbai

In the result, grounds No

ITA 2259/MUM/2022[2018-19]Status: DisposedITAT Mumbai22 Sept 2025AY 2018-19

Bench: Smt. Beena Pillai () & Smt. Renu Jauhri ()

Section 253(1)(d)Section 92C(3)

relying on decisions which have been overruled by higher authorities. 10. The AO/DRP erred in holding that Siemens Ltd. constituted the Appellant's permanent establishment (PE) for the purposes of the DTAA between India and Germany in respect of its contract with PGCIL and others. 11. The AO/DRP erred ... hands of the assessee foreign company, Siemens AG. The contract has been artificially divided into 3 parts so as to avoid formation of a Permanent Establishment in India and avoid taxability. 2. The Permanent Establishment of the assessee, Siemens Limited (India) is directly involved in the relevant transaction

Siemens Aktiengesellschaft, Mumbai vs. Asstt. CIT (International Taxation)-Circle-4(2)(1), Mumbai

In the result, grounds No

ITA 1615/MUM/2022[2017-18]Status: DisposedITAT Mumbai22 Sept 2025AY 2017-18

Bench: Smt. Beena Pillai () & Smt. Renu Jauhri ()

Section 253(1)(d)Section 92C(3)

Forcepoint International Technology Limited, Noida vs. ACIT, Circle Int. Taxation 1(3)(1), New Delhi

In the result, appeal of assessee in ITA No

ITA 976/DEL/2023[2020-21]Status: DisposedITAT Delhi22 Sept 2025AY 2020-21

Bench: Shri Anubhav Sharma & Shri Naveen Chandra

For Appellant: Shri Anil Bhalla, CAFor Respondent: Shri Vijay B. Basanta CIT- DR

Section 139(1)Section 9(1)(vii)

company Forcepoint International Technology Limited, Ireland (herein referred as FITL) [erstwhile Websense International Technology Limited (WITL)] is an overseas Company. It does not have permanent establishment in India. Page 3 of 19 ITA No. 976/DEL/2023 [A.Y. 2020-21] Forcepoint International Technology Ltd Vs.The ACIT 5. The Assessee has filed

DCIT(It)-2.1.2, Bkc, Kurla vs. Delta Air Lines, Deora Marg

In the result, appeal of the Revenue is dismissed

ITA 4195/MUM/2025[2016-17]Status: DisposedITAT Mumbai19 Sept 2025AY 2016-17

Bench: Ms. Suchitra Raghunath Kamble & Shri Girish Agrawal

For Appellant: Shri Sriram Seshadri, CA (Virtually Present)For Respondent: Shri Krishna Kumar, Sr. DR

Section 143(3)Section 144C(3)

Bank of India, to undertake activities related to the booking of air passenger tickets and air freight in India. The branch is an admitted Permanent Establishment of assessee in India, During AY 2014-15, assessee earned income from operation of aircrafts in international traffic through assessee's own aircrafts

DCIT(It)-2.1.2, Bkc vs. Delta Air Lines, Marine Drive

In the result, appeal of the Revenue is dismissed

ITA 4183/MUM/2025[2015-16]Status: DisposedITAT Mumbai19 Sept 2025AY 2015-16

Bench: Ms. Suchitra Raghunath Kamble & Shri Girish Agrawal

For Appellant: Shri Sriram Seshadri, CA (Virtually Present)For Respondent: Shri Krishna Kumar, Sr. DR

Section 143(3)Section 144C(3)

DCIT(It)-2.1.2, Mumbai vs. Delta Air Lines, Marine Drive, Mumbai

In the result, appeal of the Revenue is dismissed

ITA 4182/MUM/2025[2014-15]Status: DisposedITAT Mumbai19 Sept 2025AY 2014-15

Bench: Ms. Suchitra Raghunath Kamble & Shri Girish Agrawal

For Appellant: Shri Sriram Seshadri, CA (Virtually Present)For Respondent: Shri Krishna Kumar, Sr. DR

Section 143(3)Section 144C(3)

Appdynamics International Limited, United Kingdom vs. Assistant Commissioner of Income-Tax, (International Taxation), Circle-1(1)(1), Delhi

In the result, appeal of the assessee in ITA No

ITA 3743/DEL/2023[AY 2021-22]Status: DisposedITAT Delhi19 Sept 2025

Bench: Shri Challa Nagendram Prasad & Shri Naveen Chandra

For Appellant: Shri Nageswar Rao, AdvFor Respondent: Shri Siddharth Bhim Singh Meena, CIT-DR

service recipient), and Article 5 of the UK-India DTAA, the AO held that the AppD India (service provider) is the DAPE (Dependent Agent Permanent Establishment) of the assessee. The Assessing Officer finally attributed 75% of profits from off-shore sales to the PE of the assessee for its operations ... contracting State - other than an agent of an independent status to whom paragraph (5) of this Article applies, shall be deemed to be a permanent establishment of that enterprise in the first mentioned State if: (a) he has, and habitually exercises in that State, an authority to negotiate and enter

M/S Sanco Holding As, Dehradun vs. DCIT(International Taxation), Dehradun

In the result, the appeal of the assessee is allowed

ITA 35/DDN/2025[2022-23]Status: DisposedITAT Dehradun17 Sept 2025AY 2022-23

Bench: Shri Yogesh Kumar U.S. & Shri Manish Agarwal

Section 143(3)Section 144CSection 448Section 44BSection 90(2)

this Article, be deemed in relation to those activities to be carrying on business in that other State through a permanent establishment or fixed base situated therein. 3. The provisions of paragraph 2 shall not apply where the activities are carried on for a period not exceeding 30 days

Factive Limited, Mumbai vs. Assistant Commissioner of Income Tax, (International Taxation )-2(3)(1), Mumbai

In the result, both the appeals are partly allowed

ITA 4706/MUM/2023[2021-22]Status: DisposedITAT Mumbai15 Sept 2025AY 2021-22

Bench: Shri Saktijit Dey & Shri Girish Agrawal & Factive Limited Asst. Cit(It)-2(3)(1) C/O. Price Waterhouse & Co. Llp 609, 6Th Floor, Kautilya Bhavan, 252, Veer Savarkar Marg, C-41, C-43, G Block, Vs. Shivaji Park, Dadar, Bandra Kurla Complex, Mumbai-400 028 Bandra (E), Mumbai Pan/Gir No. Aaccf 5745 J (Appellant) : (Respondent) : Shri Dhanesh Bafna A/W Appellant By Shri Yogesh Malpani & Ms. Kinjal Patel Respondent By : Shri Krishna Kumar (Sr. Dr) Date Of Hearing : 21.08.2025 Date Of Pronouncement : 15.09.2025 O R D E R Per Saktijit Dey: Captioned Appeals By The Assessee Are Against The Final Assessment Orders Passed U/S. 143(3) R.W.S 144C(13) Of The Income Tax Act, 1961 (‘The Act’ For Short), In Pursuance To The Directions Of Learned Dispute Resolution Panel (‘Ld. Drp' For Short) & Pertains To The Assessment Years (A.Y.) 2021-22 & 2022-23. 2. Since The Substantive Issue On Merits, Arising In The Appeals Are More Or Less Common In Both The Appeals, We Propose To Take Up Ita No. 4706/Mum/2023, Pertaining To A.Y. 2021-22, As The Lead Appeal. (A.Ys. 2021-22 & 2022-23) Factive Limited Vs. Asst. Cit(It) 3. Ground Nos. 1, 2 & 3 Are Basically On Legal Issues, Challenging The Validity Of The Final Assessment Order. At The Outset, Ld. Counsel Appearing For The Assessee Submitted That He Would Prefer To Address The Issues On Merits And, If Warranted, May Press The Legal Grounds.

For Respondent: Shri Krishna Kumar (Sr. DR)

Section 143(3)Section 9(1)(vi)

Learned AO and the Learned DRP erred in holding that Dow Jones Consulting India Private Limited (DJCIPL) constitutes a dependent agent Permanent Establishment ('PE') of the Appellant. 6. On the facts and in the circumstances of the case and in law, the Learned DRP erred in invoking the provisions ... Factive Limited vs. Asst. CIT(IT) for short). Whereas, the second issue relates to existence or otherwise of a Dependent Agent Permanent Establishment (‘DAPE’ for short) of the assessee in India in the form of DJCIPL. Of-course, the peripheral issues relating to applicability of provisions of Multilateral Instrument

DCIT Intl. Tax Circle-1(2)(2), New Delhi vs. Everest Global Inc., Usa

Appeal is allowed

ITA 1272/DEL/2023[2020-21]Status: DisposedITAT Delhi10 Sept 2025AY 2020-21

Bench: Shri Challa Nagendra Prasad & Shri Naveen Chandra

For Appellant: Ms. Vandana Bhandri, CAFor Respondent: Shri Vikram Singh Sharma, Sr. DR

Section 143(2)

1135/DEL/2023 [A.Y.2015-16,2016-17,2017-18,2018-19,2019-2020,2020-21] M/s Everest Global Inc Vs.The A. C.I.T have a Permanent Establishment in India. It is also pertinent to note that sales and marketing team of assessee has not visited India for rendition of these services. Further, amounts

DCIT Intl. Tax Circle-1(2)(2), New Delhi vs. Everest Global Inc., Usa

Appeal is allowed

ITA 1271/DEL/2023[2019-20]Status: DisposedITAT Delhi10 Sept 2025AY 2019-20

Bench: Shri Challa Nagendra Prasad & Shri Naveen Chandra

For Appellant: Ms. Vandana Bhandri, CAFor Respondent: Shri Vikram Singh Sharma, Sr. DR

Section 143(2)

DCIT Intl. Tax Circle-1(2)(2), New Delhi vs. Everest Global Inc., Usa

Appeal is allowed

ITA 1270/DEL/2023[2018-19]Status: DisposedITAT Delhi10 Sept 2025AY 2018-19

Bench: Shri Challa Nagendra Prasad & Shri Naveen Chandra

For Appellant: Ms. Vandana Bhandri, CAFor Respondent: Shri Vikram Singh Sharma, Sr. DR

Section 143(2)

assessee submitted that the marketing and sales fee received by assessee is not taxable in India as assessee does not have a Permanent Establishment in India. It is also pertinent to note that sales and marketing team of assessee has not visited India for rendition of these services. Further, amounts