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“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

DCIT, Cir 16(2), Mumbai vs. M/S Kpmg Assurance and Consulting Services LLP, Mumbai

ITA 2275/MUM/2023[2015-16]Status: DisposedITAT Mumbai12 Aug 2024AY 2015-16

Assessee that the professional fee was in the nature of Business Profits or income from Independent Personal Services (IPS); and in absence of a Permanent Establishment (PE) or fixed base in India, respectively, the same was not liable to tax in India. The Assessee was, therefore, not under obligation ... above] it was contended that professional fee paid to some parties was in the nature of Business Profits and in absence of a Permanent Establishment of the said parties in India, the same was not liable to tax in India under Article 7 of the corresponding DTAA. [Refer to Note

DCIT, Cir 16(2), Mumbai vs. M/S Kpmg Assurance and Consulting Services LLP, Mumbai

Accordingly, Ground No. 5 & 6 raised by the Revenue are dismissed

ITA 2274/MUM/2023[2014-15]Status: DisposedITAT Mumbai12 Aug 2024AY 2014-15

Bench: IN THE INCOME TAX APPELLATE TRIBUNAL "I" BENCH, MUMBAI SHRI PRASHANT MAHARISHI, ACCOUNTANT MEMBER SHRI RAHUL CHAUDHARY (Judicial Member)

Assessee that the professional fee was in the nature of Business Profits or income from Independent Personal Services (IPS); and in absence of a Permanent Establishment (PE) or fixed base in India, respectively, the same was not liable to tax in India. The Assessee was, therefore, not under obligation ... above] it was contended that professional fee paid to some parties was in the nature of Business Profits and in absence of a Permanent Establishment of the said parties in India, the same was not liable to tax in India under Article 7 of the corresponding DTAA. [Refer to Note

DCIT, Cir 16(2), Mumbai vs. M/S Kpmg Assurance and Consulting Services LLP, Mumbai

ITA 2273/MUM/2023[2013-14]Status: DisposedITAT Mumbai12 Aug 2024AY 2013-14

Assessee that the professional fee was in the nature of Business Profits or income from Independent Personal Services (IPS); and in absence of a Permanent Establishment (PE) or fixed base in India, respectively, the same was not liable to tax in India. The Assessee was, therefore, not under obligation ... above] it was contended that professional fee paid to some parties was in the nature of Business Profits and in absence of a Permanent Establishment of the said parties in India, the same was not liable to tax in India under Article 7 of the corresponding DTAA. [Refer to Note

DCIT, Cir 16(2), Mumbai vs. M/S Kpmg Assurance and Consulting Services LLP, Mumbai

ITA 2272/MUM/2023[2012-13]Status: DisposedITAT Mumbai12 Aug 2024AY 2012-13

Assessee that the professional fee was in the nature of Business Profits or income from Independent Personal Services (IPS); and in absence of a Permanent Establishment (PE) or fixed base in India, respectively, the same was not liable to tax in India. The Assessee was, therefore, not under obligation ... above] it was contended that professional fee paid to some parties was in the nature of Business Profits and in absence of a Permanent Establishment of the said parties in India, the same was not liable to tax in India under Article 7 of the corresponding DTAA. [Refer to Note

Income Tax Officer, Greams Road Income Tax Office vs. K Ansari, Chennai

In the result, both the appeals stand dismissed

ITA 1358/CHNY/2023[2009-10]Status: DisposedITAT Chennai07 Aug 2024AY 2009-10

Bench: Hon’Ble Shri Manoj Kumar Aggarwal, Am & Hon’Ble Shri Manu Kumar Giri, Jm 1. आयकरअपील सं. / Ita No.1357/Chny/2023 (िनधा9रणवष9 / Assessment Year: 2008-09) & 2. आयकरअपील सं. / Ita No.1358/Chny/2023 (िनधा9रणवष9 / Assessment Year: 2009-10) Ito Mr. K. Ansari बनाम/ #6/1, Parameshwari Nagar International Taxation Ward -1(1) Vs. 4Th Street, Adyar, Chennai-600 020. Chennai-6. "थायीलेखासं./जीआइआरसं./Pan/Gir No. Akhpa-5381-M (अपीलाथ"/Appellant) : (" थ" / Respondent) अपीलाथ" कीओरसे/ Appellant By : Shri Ar V Sreenivasan (Addl.Cit)-Ld. Sr. Dr " थ"कीओरसे/Respondent By : Shri B. Ramakrishnan (Fca)-Ld.Ar सुनवाई की तारीख/Date Of Hearing : 19-06-2024 घोषणा की तारीख /Date Of Pronouncement : 07-08-2024 आदेश / O R D E R Manoj Kumar Aggarwal ()

For Appellant: Shri AR V Sreenivasan (Addl.CIT)-Ld. Sr. DRFor Respondent: Shri B. Ramakrishnan (FCA)-Ld.AR
Section 143(3)Section 148Section 68

record of the assessee were examined in the context of cash inflow and cash outflow. The affidavit of the assessee regarding business connection and permanent establishment of M/s Supreme Cargo Express in Kuwait and M/s Skyline International cargo Agency in Saudi Arabia were taken on record. In the light

Income Tax Officer, Income Tax Department Greams Road vs. K Ansari, Chennai

In the result, both the appeals stand dismissed

ITA 1357/CHNY/2023[2008-09]Status: DisposedITAT Chennai07 Aug 2024AY 2008-09

Bench: Hon’Ble Shri Manoj Kumar Aggarwal, Am & Hon’Ble Shri Manu Kumar Giri, Jm 1. आयकरअपील सं. / Ita No.1357/Chny/2023 (िनधा9रणवष9 / Assessment Year: 2008-09) & 2. आयकरअपील सं. / Ita No.1358/Chny/2023 (िनधा9रणवष9 / Assessment Year: 2009-10) Ito Mr. K. Ansari बनाम/ #6/1, Parameshwari Nagar International Taxation Ward -1(1) Vs. 4Th Street, Adyar, Chennai-600 020. Chennai-6. "थायीलेखासं./जीआइआरसं./Pan/Gir No. Akhpa-5381-M (अपीलाथ"/Appellant) : (" थ" / Respondent) अपीलाथ" कीओरसे/ Appellant By : Shri Ar V Sreenivasan (Addl.Cit)-Ld. Sr. Dr " थ"कीओरसे/Respondent By : Shri B. Ramakrishnan (Fca)-Ld.Ar सुनवाई की तारीख/Date Of Hearing : 19-06-2024 घोषणा की तारीख /Date Of Pronouncement : 07-08-2024 आदेश / O R D E R Manoj Kumar Aggarwal ()

For Appellant: Shri AR V Sreenivasan (Addl.CIT)-Ld. Sr. DRFor Respondent: Shri B. Ramakrishnan (FCA)-Ld.AR
Section 143(3)Section 148Section 68

record of the assessee were examined in the context of cash inflow and cash outflow. The affidavit of the assessee regarding business connection and permanent establishment of M/s Supreme Cargo Express in Kuwait and M/s Skyline International cargo Agency in Saudi Arabia were taken on record. In the light

Ernst and Young U.S. LLP, United States vs. ACIT, Circle International Tax 1(2)(2), New Delhi

In the result, the appeal of the assessee is allowed

ITA 3253/DEL/2023[2021-22]Status: DisposedITAT Delhi07 Aug 2024AY 2021-22

Bench: Dr. B. R. R. Kumar, Ms. Madhumita Roy

For Appellant: Sh. S. Ganesh, Sr. Adv. &For Respondent: Sh. Vivek Vardhan, Sr. DR
Section 143(3)Section 144CSection 192

failed to appreciate that in any event be taxed in India because it is undisputed position that the Appellant does not have a Permanent Establishment in India. Other grounds Ground 4: That on the facts and in the circumstances of the case and in law, the Ld. AO has erred ... Contracting State, carries on business in the other Contracting State, in which the royalties or fees for included services arise, through a permanent establishment situated therein, or performs in that other State independent personal services from a fixed base situated therein, and the royalties or fees for included services

Deputy Commissioner Income Tax, Circle-3(1)(1), Benglauru, Bengaluru vs. Goldman Sachs Services Pvt Ltd, Bengaluru

In the result, the appeal of the assessee is partly allowed for statistical purposes

ITA 1242/BANG/2024[2013-14]Status: DisposedITAT Bangalore06 Aug 2024AY 2013-14

Bench: Shri Chandra Poojari & Shri Keshav Dubey

For Appellant: Sri Sharat Rao, A.RFor Respondent: Ms. Neera Malhotra, D.R
Section 195Section 201(1)Section 40Section 9(1)(vii)

held that payment made by the petitioner to the overseas entity was in the nature of income in view of the existence of Service Permanent establishment (PE) in India and hence liable for tax withholding. Overturning the view of the AAR that Service PE was constituted, the Hon'ble High

Deputy Commissioner of Income Tax, Circle-3(1)(1), Bengaluru vs. Goldman Sachs Services Pvt. Ltd, Bengaluru

In the result, the appeal of the assessee is partly allowed for statistical purposes

ITA 1241/BANG/2024[2011-12]Status: DisposedITAT Bangalore06 Aug 2024AY 2011-12

Bench: Shri Chandra Poojari & Shri Keshav Dubey

For Appellant: Sri Sharat Rao, A.RFor Respondent: Ms. Neera Malhotra, D.R
Section 195Section 201(1)Section 40Section 9(1)(vii)

held that payment made by the petitioner to the overseas entity was in the nature of income in view of the existence of Service Permanent establishment (PE) in India and hence liable for tax withholding. Overturning the view of the AAR that Service PE was constituted, the Hon'ble High

M/S. Idea Cellular Limited, Indore vs. The DCIT (TDS), Indore

Appeals are allowed

ITA 111/IND/2015[2013-14 (Quarter 4)]Status: DisposedITAT Indore01 Aug 2024

Bench: Shri Vijay Pal Rao & Shri B.M. Biyani

Section 194Section 194HSection 194JSection 201(1)

overseas and that Vodafone Idea Ltd. had availed certain services from the non-resident telecom operators and that such agreements would not create a permanent establishment of such non-resident telecom operators in India. Thereafter Hon’ble High Court after verifying the facts of the case having regards ... NTOs. It is also not in dispute that Belgacom, a Belgium entity with whom assessee has entered into an agreement does not have any ‘permanent establishment’ in India. 16. Shri. Pardiwala contended that the payments made by assessee cannot be treated as either Royalty or FTS34 or business profits

M/S. Idea Cellular Limited, Indore vs. The DCIT (TDS), Indore

Appeals are allowed

ITA 110/IND/2015[2013-14 (for first three quarter)]Status: DisposedITAT Indore01 Aug 2024

Bench: Shri Vijay Pal Rao & Shri B.M. Biyani

Section 194Section 194HSection 194JSection 201(1)

overseas and that Vodafone Idea Ltd. had availed certain services from the non-resident telecom operators and that such agreements would not create a permanent establishment of such non-resident telecom operators in India. Thereafter Hon’ble High Court after verifying the facts of the case having regards ... NTOs. It is also not in dispute that Belgacom, a Belgium entity with whom assessee has entered into an agreement does not have any ‘permanent establishment’ in India. 16. Shri. Pardiwala contended that the payments made by assessee cannot be treated as either Royalty or FTS34 or business profits

M/S. Idea Cellular Limited, Indore vs. The DCIT (TDS), Indore

Appeals are allowed

ITA 109/IND/2015[2012-13]Status: DisposedITAT Indore01 Aug 2024AY 2012-13

Bench: Shri Vijay Pal Rao & Shri B.M. Biyani

Section 194Section 194HSection 194JSection 201(1)

overseas and that Vodafone Idea Ltd. had availed certain services from the non-resident telecom operators and that such agreements would not create a permanent establishment of such non-resident telecom operators in India. Thereafter Hon’ble High Court after verifying the facts of the case having regards ... NTOs. It is also not in dispute that Belgacom, a Belgium entity with whom assessee has entered into an agreement does not have any ‘permanent establishment’ in India. 16. Shri. Pardiwala contended that the payments made by assessee cannot be treated as either Royalty or FTS34 or business profits

Western Digital Technologies Inc., United States of America vs. Deputy Commissioner of Income-Tax, (International Taxation), Circle-2(1), Bangalore

In the result, the appeal filed by the assessee stands allowed

ITA 343/BANG/2024[2016-17]Status: DisposedITAT Bangalore31 Jul 2024AY 2016-17

Bench: Smt. Beena Pillai & Shri Laxmi Prasad Sahu

For Appellant: Shri Ajay Rotti, CAFor Respondent: Shri Sunil Kumar Agarwal
Section 234ASection 234BSection 271(1)(c)

grounds of objections. Therefore, the directions issued by the Hon'ble Panel are bad in law and liable to be quashed. 2. Permanent Establishment 2.1. The Hon'ble Panel erred in upholding the action of the Deputy Commissioner of Income Tax International Taxation, Circle - 2(1) ['the Learned Assessing officer ... Panel erred in facts and in law in upholding the action of the Ld. AO in concluding that SanDisk India constitutes Dependent Agency Permanent Establishment ('PE') of the Appellant in India. 2.4. The Ld. AO erred in not considering the fact that in the absence of any transactions between SanDisk

Avana Global Fzco, Mumbai vs. Commissioner of Income Tax (International Tax)-1, Mumbai

ITA 2731/MUM/2024[2018-19]Status: DisposedITAT Mumbai30 Jul 2024AY 2018-19

Bench: Shri Narendra Kumar Billaiya, Hon'Ble & Smt. Kavitha Rajagopal, Hon'Bleι.Τ.Α. No. 2731/Mum/2024

For Appellant: Shri Dhanesh Bafna, Shri Hardik Nirmal & Ms. HinalFor Respondent: Smt. Shaileja Rai, CIT, D/R
Section 143(3)Section 144C(3)Section 263

High Court in the case of CIT v. Visakhapatnam Port Trust [1983] 144 ITR 146 (SC), the AO held that the assessee is having permanent establishments in India, both fixed and in the form of agent/front office. Having established the business connection, the AO treated the amount of Rs.2

Samsung India Electronics Pvt. Ltd., Gurgaon vs. DCIT Circle-22(2), New Delhi

In the result, the appeal of the assessee is partly allowed in the aforesaid manner

ITA 9482/DEL/2019[2015-16]Status: DisposedITAT Delhi29 Jul 2024AY 2015-16

Bench: Shri G. S. Pannu & Shri Yogesh Kumar U.S.

For Appellant: S/Shri Himanshu S. Sinha & Bhuwan Dhoopar, AdvFor Respondent: S/Shri Mahesh Shah, CIT(DR) & Kanv Bali, Sr. DR
Section 142(1)Section 143(2)Section 144C(1)Section 144C(13)Section 92C

account of the presence of these secondee expatriates in India at the premises of the appellant, the Korean company had a fixed place permanent establishment in India. It was concluded that since the expatriate employees on secondment from Korea to India are regularly providing information to the parent company, they ... foreign company. 67. Before the Ld. DRP, the assessee submitted that in the case of Samsung Korea the issue of existence of permanent establishment on account of the activities of the secondee expatriates, the Tribunal has deleted the addition and negated the conclusion drawn by the AO. The DRP, while

Ncr Global Solutions Limited, Ireland vs. Deputy Commissioner of Income-Tax, Circle 2(2)(2), International Tax, New Delhi

In the result, the grounds are sustained and the appeal filed by the Assessee is allowed

ITA 3230/DEL/2023[2021-22]Status: DisposedITAT Delhi26 Jul 2024AY 2021-22

Bench: Shri G.S. Pannu, Hon’Ble & Shri Anubhav Sharmaassessment Year: 2021-22 Ncr Global Solutions Limited, Vs Dcit, Lakeview Drive, Circle 2(2)(2), Airside Business Park, International Taxation, Swords, Co. Dublin, K67 N2N9, New Delhi. Ireland. Pan: Aadcn5762E (Appellant) (Respondent) Assessee By : Shri Nageshwar Rao & Ms Viyushti Rawat, Advocate Revenue By : Shri Vizay B. Vasanta, Cit-Dr Date Of Hearing : 25.07.2024 Date Of Pronouncement : 26.07.2024 Order Per Anubhav Sharma, Jm: This Appeal Is Preferred By The Assessee Against The Order Dated 09.08.2023 Of The Dispute Resolution Panel-2, New Delhi (Hereinafter Referred To As ‘The Ld. Drp’) In Objection No.220 Dated 20.01.2023 Arising Out Of The Objection Before It Against The Order Passed U/S 143(3) R.W.S. 144C(13) Of The Income Tax Act, 1961 (Hereinafter Referred To As ‘The Act’), By The Dcit, Circle International Taxation 2(2)(2), New Delhi (Hereinafter Referred To As The Ld. Ao).

For Appellant: Shri Nageshwar Rao &For Respondent: Shri Vizay B. Vasanta, CIT-DR
Section 142(1)Section 143(3)

India and detail of agents in India. Also to give a note on why the above do not constitute a ‘business connection’ and a ‘Permanent Establishment’ in India? 7. The assessee submitted that it does not have any branch office / project office / liaison office / godown / warehouse / construction or other business ... sites or any other form of business presence in India which constitute a Permanent Establishment in the form of Fixed place PE, Agency PE, Installation PE, Construction PE or Service PE in India in accordance with Article 5 of the India-lreland Tax Treaty or a business connection. 8. Further

Tiger Global Eight Holdings, Mauritius vs. DCIT Intl. Taxation Circle 3(1)(1), New Delhi

ITA 2345/DEL/2023[2020-2021]Status: DisposedITAT Delhi26 Jul 2024AY 2020-2021

Bench: Shri G.S. Pannu, Hon’Ble & Shri Anubhav Sharmaassessment Year: 2020-21 Tiger Global Eight Holdings, Vs Dcit, C/O 202 Rajnigandha International Taxation, Apartment, Circle 3(1)(1), Prof. V.S. Agashe Path, New Delhi. Dadar (West), Mumbai 400 028, Maharashtra. Pan: Aafct0276M (Appellant) (Respondent) Assessee By : Shri Porus Kaka, Sr. Advocate; Shri Manish Kant, Advocate; & Ms Amrita Shenoy & Hetal Jakharia, Cas Revenue By : Shri Vizay B. Vasanta, Cit-Dr Date Of Hearing : 25.07.2024 Date Of Pronouncement : 26.07.2024 Order Per Anubhav Sharma, Jm:

For Appellant: Shri Porus Kaka, Sr. AdvocateFor Respondent: Shri Vizay B. Vasanta, CIT-DR
Section 144C(13)

China. Under the current treaty, subject to certain conditions, an entity which is a tax resident in Mauritius, but has no branch or permanent establishment in China, may not be subject to capital gains tax in China on the sale of securities provided that the assets of the Chinese company ... treaty between Mauritius and India, subject to certain conditions, an entity which is a tax resident in Mauritius, but has no branch or permanent establishment in India, should not be subject to capital gains tax in India on the sale of securities. On May 10, 2018, India and Mauritius signed

Mixpanel Inc., Usa vs. ACIT Circle- 2(2)(1) Int.Taxation., New Delhi

The appeal is allowed

ITA 1996/DEL/2022[2018-19]Status: DisposedITAT Delhi26 Jul 2024AY 2018-19

Bench: Shri Gs Pannu & Shri Anubhav Sharma

For Appellant: Shri Kamal Sawhney, AdvocateFor Respondent: Shri Vizay B. Vasanta, CIT(DR)
Section 143(2)Section 143(3)Section 144C(13)

showing its income as NIL claiming the exemption of Rs. 9,09,42,347 being business income not taxable in absence of permanent establishment. 2.1 The case was selected for complete scrutiny under CASS and notice u/s 143(2) was issued on 21.09.2019. The assessee has claimed to be engaged ... Company is not taxable in India as per the India-USA Double Taxation Avoidance Agreement ('DTAA'), as it does not have a permanent establishment in India. The details of revenue earned are provided in the return of income filed by the Company for the AY 2018-19, on a gross

Itochu Corporation, Japan vs. ACIT (International Taxation), Circle-2(1)(1), New Delhi

The appeal is allowed

ITA 760/DEL/2021[2017-18]Status: DisposedITAT Delhi26 Jul 2024AY 2017-18

Bench: Shri Gs Pannu & Shri Anubhav Sharma

For Appellant: Shri Ajay Vohra, Sr. AdvFor Respondent: Shri Vizay B. Vasanta, CIT( DR)
Section 143(2)Section 143(3)Section 144C

Counsel and as made before the tax authorities below it comes up that as far as non-existence of a permanent establishment is concerned the AO had alleged existence of dependent agent PE in India in terms of Article 5 of the India-Japan Double Taxation Avoidance Agreement ('DTAA ... descriptive and detailed. For the sake of convenience, they may be reduced to two core issues before the Panel for consideration: (a) Issue of permanent establishment: (b) Issue of attribution of income liable to tax in India 3.1 Existence of Permanent Establishment in India 3.1.1 The Assessing Officer has contended

Bticino S.P.A, Italy vs. ACIT Intl. Taxation-1(1)(2), New Delhi

In the result, the appeal of the assessee is allowed

ITA 2294/DEL/2023[2020-21]Status: DisposedITAT Delhi24 Jul 2024AY 2020-21

Bench: Sh. Saktijit Deydr. B. R. R. Kumar

For Appellant: Sh. S. K. Aggarwal, CAFor Respondent: Sh. Vizay B. Vasanta, CIT-DR
Section 143(3)Section 144C(13)Section 153Section 234ASection 270A

under the provisions of Section 153 of the Act and therefore, bad in law and be struck down and annulled. 3. Grounds relating to Permanent Establishment 3.1. On the facts and in circumstances of the case and in law, the Learned AO/ DRP has erred in treating the Novateur Electrical ... Digital Systems Private Limited (i.e., the Indian group entity to whom the Appellant has made offshore supply of goods) ('Novateur India) as fixed place permanent establishment ('PE') of the Appellant in India. 3.2. On the facts and in circumstances of the case and in law, the Learned