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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

Elizebeth Simaputhran, Chennai vs. ITO, Ward-1(1), International Taxation, Chennai

In the result, ITA No.906/Chny/2023 stand allowed for statistical purposes whereas ITA No

ITA 907/CHNY/2023[2016-17]Status: DisposedITAT Chennai06 Mar 2024AY 2016-17

Bench: Hon’Ble Shri Manoj Kumar Aggarwal, Am & Hon’Ble Shri Manomohan Dasआयकरअपील सं./ Ita No.906/Chny/2023 (िनधा;रण वष; / Assessment Year: 2016-17) & आयकरअपील सं./ Ita No.907/Chny/2023 (िनधा;रण वष; / Assessment Year: 2016-17) Mrs. Elizabeth Sima Puthran Ito Prop. M/S. Puthran & Associates Ward-(1) बनाम No.B3, 5/7, Kesavan Orchid, International Taxation, / Vs. North Mada Street, Sri Nagar Colony, Chennai. Saidapet , Chennai-600 015. "थायीलेखासं./जीआइआरसं./Pan/Gir No. Aaepe-0124-F (अपीलाथ"/Appellant) : (" थ" / Respondent) अपीलाथ"कीओरसे/ Appellant By : Shri T.Banusekar (Advocate)-Ld. Ar " थ"कीओरसे/Respondent By : Shri Ar. V. Sreenivasan (Addl.Cit)- Ld. Sr. Dr

For Appellant: Shri T.Banusekar (Advocate)-Ld. ARFor Respondent: Shri AR. V. Sreenivasan (Addl.CIT)- Ld. Sr. DR
Section 201Section 201(1)Section 9(1)(vii)

amount of Rs.59.83 Lacs to various non-residents without deduction of tax at source (TDS). The assessee submitted that foreign law firms had no permanent establishment in India and therefore no TDS was required on such payments. The assessee, in statement recorded on 18.01.2019, pleaded that the services rendered

Elizabeth Simaputhran, Chennai vs. ITO, Ward-1(1) International Taxation, Chennai

In the result, ITA No.906/Chny/2023 stand allowed for statistical purposes whereas ITA No

ITA 906/CHNY/2023[2016-17]Status: DisposedITAT Chennai06 Mar 2024AY 2016-17

Bench: Hon’Ble Shri Manoj Kumar Aggarwal, Am & Hon’Ble Shri Manomohan Dasआयकरअपील सं./ Ita No.906/Chny/2023 (िनधा;रण वष; / Assessment Year: 2016-17) & आयकरअपील सं./ Ita No.907/Chny/2023 (िनधा;रण वष; / Assessment Year: 2016-17) Mrs. Elizabeth Sima Puthran Ito Prop. M/S. Puthran & Associates Ward-(1) बनाम No.B3, 5/7, Kesavan Orchid, International Taxation, / Vs. North Mada Street, Sri Nagar Colony, Chennai. Saidapet , Chennai-600 015. "थायीलेखासं./जीआइआरसं./Pan/Gir No. Aaepe-0124-F (अपीलाथ"/Appellant) : (" थ" / Respondent) अपीलाथ"कीओरसे/ Appellant By : Shri T.Banusekar (Advocate)-Ld. Ar " थ"कीओरसे/Respondent By : Shri Ar. V. Sreenivasan (Addl.Cit)- Ld. Sr. Dr

For Appellant: Shri T.Banusekar (Advocate)-Ld. ARFor Respondent: Shri AR. V. Sreenivasan (Addl.CIT)- Ld. Sr. DR
Section 201Section 201(1)Section 9(1)(vii)

amount of Rs.59.83 Lacs to various non-residents without deduction of tax at source (TDS). The assessee submitted that foreign law firms had no permanent establishment in India and therefore no TDS was required on such payments. The assessee, in statement recorded on 18.01.2019, pleaded that the services rendered

Somenath Duttagupta, Kolkata vs. ACIT, Cir-2(1), Kolkata

In the result, the appeal of the assessee stands allowed

ITA 627/KOL/2023[2019-20]Status: DisposedITAT Kolkata01 Mar 2024AY 2019-20

Bench: Shri Sanjay Garg & Dr. Manish Boradi.T.A. No.627/Kol/2023 Assessment Year: 2019-20 Somnath Duttagupta……..………….…................…...……………....Appellant A 168, Lake Gardens, Shivam Building Flat A2, Kolkata – 700045. [Pan: Afqpd5412G] Vs. Acit, Circle-2(1), Kolkata…...…..........................................…..…..... Respondent Appearances By: Shri Balaji V, Ar, Appeared On Behalf Of The Appellant. Shri Raja Sengupta, Addl. Cit-Sr. Dr, Appeared On Behalf Of The Respondent. Date Of Concluding The Hearing : February 22, 2024 Date Of Pronouncing The Order : March 01, 2024 आदेश / Order संजय गग", "या"यक सद"य "वारा / Per Sanjay Garg: The Present Appeal Has Been Preferred By The Assessee Against The Order Dated 28.04.2023 Of The Commissioner Of Income Tax (Appeals)- 22, Kolkata [Hereinafter Referred To As ‘Cit(A)’] Passed U/S 250 Of The Income Tax Act (Hereinafter Referred To As The ‘Act’). 2. The Assessee In This Appeal Is Aggrieved By The Action Of The Lower Authorities In Making/Confirming The Addition Of Salary Income Of Rs.47,26,133/- Received By The Assessee In India For The Services Rendered In Us. 3. The Brief Facts Of The Case Are That The Assessee, An Individual, Filed His Revised Return Of Income For The Assessment Year Under Consideration I.E. A.Y 2019-20 Declaring A Total Income Of Rs.191370/-.

Section 250Section 90(4)

behalf of, an employer who is not a resident of the other State ; and (c) the remuneration is not borne by a permanent establishment or a fixed base or a trade or business which the employer has in the other State. 3. Notwithstanding the preceding provisions of this Article, remuneration ... other state and the remuneration has not been paid by resident of that other state and even the remuneration is not borne by a permanent establishment or fixed base or a trade or business which the employer has in that other state, then the remuneration of the resident is liable

DCIT 22(1), Mumbai vs. Creations by Shanagar, Mumbai

In the result, appeal of Revenue for Assessment Year 2010-11

ITA 2476/MUM/2023[2016-17]Status: DisposedITAT Mumbai29 Feb 2024AY 2016-17

Bench: Shri Aby T. Varkey, Jm & Shri S Rifaur Rahman, Am आयकर अपील सं/ I.T.A. No.2476/Mum/2023 (निर्धारण वर्ा / Assessment Year: 2016-17) Dcit-22(1) बिधम/ Creations By Shanagar Room No. 322, 3Rd Floor, 34, Auro Villa, St. Vs. Piramal Chamber, Lalbaug, Andrews Rd Santaxruz Mumbai-400012. (West), Mumbai-400054. स्थधयी लेखध सं./जीआइआर सं./Pan/Gir No. : Aacfc7957L (अपीलार्थी /Appellant) .. (प्रत्यर्थी / Respondent) Assessee By: Shri Milin Bakhai Revenue By: Shri H. M. Bhatt (Sr. Dr) सुनवाई की तारीख / Date Of Hearing: 27/02/2024 घोषणा की तारीख /Date Of Pronouncement: 29/02/2024 आदेश / O R D E R Per Aby T. Varkey, Jm: This Is An Appeal Preferred By The Revenue Against The Order Of The Ld. Commissioner Of Income Tax/Nfac, [Hereinafter Referred To As The “Cit”], Delhi Dated 16.05.2023 For Assessment Year 2016-17. 2. The Sole Issue Raised By The Revenue Is Against The Action Of The Ld. Cit(A) Deleting The Addition In Respect Of Commission Paid To Foreign Agent Amounting To Rs.1,61,90,101/-.

For Appellant: Shri Milin BakhaiFor Respondent: Shri H. M. Bhatt (Sr. DR)
Section 143(3)Section 195Section 9(2)

assessee filed its reply and stated that none of the parties/agents to whom the assessee has remitted commission payment/paid commission payment had any Permanent Establishment [PE] in India and therefore, it pleaded that they were not liable to tax in India and so deduction of Tax at source ... such non-resident agents are made outside India on account of sale percentage and that the non-resident does not have any geographical or Permanent Establishment in India. It is noted that Tax Treaty exists with the country of residents of non- resident, i.e, residents of non-resident, residents

Bank of Nova Scotia, Mumbai vs. Deputy Commissioner of Income Tax (It)-1(2)(1), Mumbai

In the result, appeal of the assessee is allowed

ITA 863/MUM/2022[2013-14]Status: DisposedITAT Mumbai28 Feb 2024AY 2013-14

Bench: Shri Vikas Awasthy & Shri Amarjit Singhआअसं.4981/मुं/2017 (िन.व.2010-11) आअसं.3065/मुं/2018 (िन.व.2011-12) आअसं.820/मुं/2019(िन.व.2012-13) आअसं.863/मुं/2022 (िन.व.2013-14) The Bank Of Nova Scotia, Mittal Towers, B-Wing, Nariman Point, Mumbai 400 020. Pan: Aaacb-1536-H ...... अपीलाथ"/Appellant बनाम Vs. Additional Director Of Income Tax (International Taxation)-3,/Dcit (It) 1(2)(1)Mumbai Air India Building, Nariman Point, Mumbai 400 021 ....."ितवादी/Respondent आअसं.4899/मुं/2017 (िन.व. 2010-11) Dy. Commissioner Of Income Tax,(It)-1(2),Mumbai Room No.1811, 18Th Floor, Air India Building, Nariman Point, Mumbai 400 021 ...... अपीलाथ"/Appellant बनाम Vs. The Bank Of Nova Scotia, Mittal Towers, B-Wing, Nariman Point, Mumbai 400 020. Pan: Aaacb-1536-H ....."ितवादी/Respondent Assessee By : Shri Nishant Thakkar & Ms. Jasmin Amalsadvala, Advocates Revenue By : Shri Anil Sant, Sr. Ar

For Appellant: Shri Nishant Thakkar and Ms. Jasmin Amalsadvala, AdvocatesFor Respondent: Shri Anil Sant, Sr. AR

interest, being a resident of a Contracting State, carries on business in the other Contracting State in which the interest arises, through a permanent establishment situated therein, or performs in that other State independent personal services from a fixed base situated therein, and the debt-claim in respect of which ... interest is paid is effectively connected with such permanent establishment or fixed base. In such case, the provisions of Article 7 or Article 14, as the case may be, shall apply. 6. Interest shall be deemed to arise in a Contracting State when the payer is that State itself

The Bank of Nova Scotia, Mumbai vs. DCIT (It) -1(2)(1), Mumbai

In the result, appeal of the assessee is allowed

ITA 3065/MUM/2018[2011-12]Status: DisposedITAT Mumbai28 Feb 2024AY 2011-12

Bench: Shri Vikas Awasthy & Shri Amarjit Singhआअसं.4981/मुं/2017 (िन.व.2010-11) आअसं.3065/मुं/2018 (िन.व.2011-12) आअसं.820/मुं/2019(िन.व.2012-13) आअसं.863/मुं/2022 (िन.व.2013-14) The Bank Of Nova Scotia, Mittal Towers, B-Wing, Nariman Point, Mumbai 400 020. Pan: Aaacb-1536-H ...... अपीलाथ"/Appellant बनाम Vs. Additional Director Of Income Tax (International Taxation)-3,/Dcit (It) 1(2)(1)Mumbai Air India Building, Nariman Point, Mumbai 400 021 ....."ितवादी/Respondent आअसं.4899/मुं/2017 (िन.व. 2010-11) Dy. Commissioner Of Income Tax,(It)-1(2),Mumbai Room No.1811, 18Th Floor, Air India Building, Nariman Point, Mumbai 400 021 ...... अपीलाथ"/Appellant बनाम Vs. The Bank Of Nova Scotia, Mittal Towers, B-Wing, Nariman Point, Mumbai 400 020. Pan: Aaacb-1536-H ....."ितवादी/Respondent Assessee By : Shri Nishant Thakkar & Ms. Jasmin Amalsadvala, Advocates Revenue By : Shri Anil Sant, Sr. Ar

For Appellant: Shri Nishant Thakkar and Ms. Jasmin Amalsadvala, AdvocatesFor Respondent: Shri Anil Sant, Sr. AR

interest, being a resident of a Contracting State, carries on business in the other Contracting State in which the interest arises, through a permanent establishment situated therein, or performs in that other State independent personal services from a fixed base situated therein, and the debt-claim in respect of which ... interest is paid is effectively connected with such permanent establishment or fixed base. In such case, the provisions of Article 7 or Article 14, as the case may be, shall apply. 6. Interest shall be deemed to arise in a Contracting State when the payer is that State itself

Bank of Nova Scotia, Mumbai vs. Addl DIT (It) RG 3, Mumbai

In the result, appeal of the assessee is allowed

ITA 4981/MUM/2017[2010-11]Status: DisposedITAT Mumbai28 Feb 2024AY 2010-11

Bench: Shri Vikas Awasthy & Shri Amarjit Singhआअसं.4981/मुं/2017 (िन.व.2010-11) आअसं.3065/मुं/2018 (िन.व.2011-12) आअसं.820/मुं/2019(िन.व.2012-13) आअसं.863/मुं/2022 (िन.व.2013-14) The Bank Of Nova Scotia, Mittal Towers, B-Wing, Nariman Point, Mumbai 400 020. Pan: Aaacb-1536-H ...... अपीलाथ"/Appellant बनाम Vs. Additional Director Of Income Tax (International Taxation)-3,/Dcit (It) 1(2)(1)Mumbai Air India Building, Nariman Point, Mumbai 400 021 ....."ितवादी/Respondent आअसं.4899/मुं/2017 (िन.व. 2010-11) Dy. Commissioner Of Income Tax,(It)-1(2),Mumbai Room No.1811, 18Th Floor, Air India Building, Nariman Point, Mumbai 400 021 ...... अपीलाथ"/Appellant बनाम Vs. The Bank Of Nova Scotia, Mittal Towers, B-Wing, Nariman Point, Mumbai 400 020. Pan: Aaacb-1536-H ....."ितवादी/Respondent Assessee By : Shri Nishant Thakkar & Ms. Jasmin Amalsadvala, Advocates Revenue By : Shri Anil Sant, Sr. Ar

For Appellant: Shri Nishant Thakkar and Ms. Jasmin Amalsadvala, AdvocatesFor Respondent: Shri Anil Sant, Sr. AR

interest, being a resident of a Contracting State, carries on business in the other Contracting State in which the interest arises, through a permanent establishment situated therein, or performs in that other State independent personal services from a fixed base situated therein, and the debt-claim in respect of which ... interest is paid is effectively connected with such permanent establishment or fixed base. In such case, the provisions of Article 7 or Article 14, as the case may be, shall apply. 6. Interest shall be deemed to arise in a Contracting State when the payer is that State itself

DCIT (It) -1(2)(1), Mumbai vs. The Bank of Nova Scotia, Mumbai

In the result, appeal of the assessee is allowed

ITA 4899/MUM/2017[2010-11]Status: DisposedITAT Mumbai28 Feb 2024AY 2010-11

Bench: Shri Vikas Awasthy & Shri Amarjit Singhआअसं.4981/मुं/2017 (िन.व.2010-11) आअसं.3065/मुं/2018 (िन.व.2011-12) आअसं.820/मुं/2019(िन.व.2012-13) आअसं.863/मुं/2022 (िन.व.2013-14) The Bank Of Nova Scotia, Mittal Towers, B-Wing, Nariman Point, Mumbai 400 020. Pan: Aaacb-1536-H ...... अपीलाथ"/Appellant बनाम Vs. Additional Director Of Income Tax (International Taxation)-3,/Dcit (It) 1(2)(1)Mumbai Air India Building, Nariman Point, Mumbai 400 021 ....."ितवादी/Respondent आअसं.4899/मुं/2017 (िन.व. 2010-11) Dy. Commissioner Of Income Tax,(It)-1(2),Mumbai Room No.1811, 18Th Floor, Air India Building, Nariman Point, Mumbai 400 021 ...... अपीलाथ"/Appellant बनाम Vs. The Bank Of Nova Scotia, Mittal Towers, B-Wing, Nariman Point, Mumbai 400 020. Pan: Aaacb-1536-H ....."ितवादी/Respondent Assessee By : Shri Nishant Thakkar & Ms. Jasmin Amalsadvala, Advocates Revenue By : Shri Anil Sant, Sr. Ar

For Appellant: Shri Nishant Thakkar and Ms. Jasmin Amalsadvala, AdvocatesFor Respondent: Shri Anil Sant, Sr. AR

interest, being a resident of a Contracting State, carries on business in the other Contracting State in which the interest arises, through a permanent establishment situated therein, or performs in that other State independent personal services from a fixed base situated therein, and the debt-claim in respect of which ... interest is paid is effectively connected with such permanent establishment or fixed base. In such case, the provisions of Article 7 or Article 14, as the case may be, shall apply. 6. Interest shall be deemed to arise in a Contracting State when the payer is that State itself

First Abu Dhabi Bank Pjsc, Mumbai vs. Deputy Commissioner of Income Tax (International Taxation)-Circle 2(3)(1), Mumbai

In the result, the appeal of the assessee is partly allowed

ITA 3279/MUM/2023[2020-21]Status: DisposedITAT Mumbai27 Feb 2024AY 2020-21

Bench: Shri Amit Shukla & Shri Amarjit Singhfirst Abu Dhabi Bank Vs. Deputy Commissioner Of Pjsc, Unit No.1101 & Income-Tax (It), Circle 1201 Platina Building, C- 2(3)(1), Room No. 1614, 59, G Block, Bandra Kurla 16Th Floor, Air India Complex, Bandra East, Building, Nariman Point, Mumbai – 400051 Mumbai – 400021 स्थायी लेखा सं./जीआइआर सं./Pan/Gir No:Aaecn2845F Appellant .. Respondent Appellant By : Madhur Agarwal Respondent By : Anil Sant Date Of Hearing 07.02.2024 Date Of Pronouncement 27.02.2024 आदेश / O R D E R Per Amarjit Singh (Am): This Appeal Filed By The Assessee Is Directed Against The Order Passed By The Deputy Commissioner Of Income Tax, International Taxation, Circle 2(3)(1), Mumbai-2, Dated 20.07.2023 For A.Y. 2020-21. The Assessee Has Raised The Following Grounds Before Us: 1. Ground No. 1: The Learned Ao Has, On The Facts & Circumstances Of The Case & In Law, Erred In Initiating & Completing Assessment Proceedings Under Section 143(3) Of The Act Without Issuing A Valid Notice Under Section 143(2) Of The Act Ie, The Notice Under Section 143(2) Of The Act Dated 29 June 2021 For Initiating Assessment Was Issued By National Faceless Assessment Centre (Nafac) Instead Of Being Issued By The Learned Ao (I.E Jurisdictional Assessing Officer) 2. Ground No. 2:

For Appellant: Madhur AgarwalFor Respondent: Anil Sant
Section 143(2)Section 143(3)Section 153Section 155(18)Section 270ASection 80G

been maintained outside India and the said charges are not subject to tax in India in absence of the charges being attributable to the permanent establishment (PE) of the foreign banks in India. 4. Ground No. 4: The learned AO has erred in disallowing the deduction claimed by the Appellant ... above facts the income in the form of bank charges was earned by the foreign bank from a source outside India without attributable to permanent establishment (PE) of the foreign bank in India. The assessing officer is directed to allow the claim of deduction of the charges recovered

Rajat Dhara, Kolkata vs. D.C.I.T., Circle-2(1), Kolkata

In the result, the appeal of the assessee stands partly allowed

ITA 1914/KOL/2019[2016-17]Status: DisposedITAT Kolkata19 Feb 2024AY 2016-17

Bench: Shri Sanjay Garg & Shri Rajesh Kumari.T.A. No.1914/Kol/2019 Assessment Year: 2016-17 Rajat Dhara............................................................…………………….……Appellant C/O Subash Agarwal & Associates, Advocates, Siddha Gibson, 1, Gibson Lane, Suite 213, 2Nd Floor, Kolkata-700069. [Pan: Abqpd1200L] Vs. Dcit (I.T), Circle-2(1), Kolkata...…….…..….........…........……...…..…..Respondent Appearances By: Shri Siddharth Agarwal, Advocate, Appeared On Behalf Of The Appellant. Shri Ankur Goyal, Jcit- Sr. Dr, Appeared On Behalf Of The Respondent. Date Of Concluding The Hearing : January 10, 2024 Date Of Pronouncing The Order : February 19, 2024 Hearing Through Video Conferencing Order Per Sanjay Garg: The Present Appeal Has Been Preferred By The Assessee Against The Order Dated 24.06.2019 Of The Commissioner Of Income Tax (Appeals)-22, Kolkata [Hereinafter Referred To As ‘Cit(A)’] Passed U/S 250 Of The Income Tax Act (Hereinafter Referred To As The ‘Act’). 2. The Appeal Of The Assessee Was Earlier Decided By The Order Of The Tribunal Dated March 02, 2022, However, The Revenue Moved An M.A No.35/Kol/2022 Stating Therein That A Mistake Apparent On Record Has Occurred In The Order Of The Tribunal Dated 02.03.2022. Therefore, Vide Order Dated 15.12.2023 Passed In M.A No.35/Kol/2022, The Final Order Dated 02.03.2022 Passed In Ita No.1914/Kol/2019 Was Recalled. The Appeal Has Been Heard Afresh. 3. The Assessee In This Appeal Has Taken The Following Grounds Of Appeal:

Section 250Section 5Section 5(1)Section 90

behalf of, an employer who is not a resident of the other State ; and (c) the remuneration is not borne by a permanent establishment or a fixed base or a trade or business which the employer has in the other State. 3. Notwithstanding the preceding provisions of this Article, remuneration ... other state and the remuneration has not been paid by resident of that other state and even the remuneration is not borne by a permanent establishment or fixed base or a trade or business which the employer has in that other state, then the remuneration of the resident is liable