“dependent agent PE”

International TaxDTAA Article 5DTAA Article 5172 judgments

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

Leading authorities on dependent agent PE

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.

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.

National Petroleum Construction Company v. DIT

383 ITR 648 · 2016 · High Court

citing judgments

An Indian agent providing marketing services, without the authority to conclude contracts on behalf of a foreign company, does not constitute a Dependent Agent Permanent Establishment (DAPE) for the foreign company in India under DTAA provisions.

DIT v. E-Funds IT Solution

364 ITR 256 · 2014 · High Court

citing judgments

A subsidiary is an independent legal entity, and the mere relationship of holding-subsidiary or control by itself does not result in a Permanent Establishment (PE) for the foreign company in India, whether it be a fixed place PE or a dependent agent PE, even when the subsidiary provides outsourced services.

Delmas France v. Asstt. DIT (IT)

17 Taxmann.com 91 · 2012 · ITAT

citing judgments

The ITAT evaluates the profit neutrality theory for a Dependent Agent Permanent Establishment (DAPE), stating that unlike a service PE, a DAPE assumes entrepreneurship risk which must be considered for arm's length remuneration.

DIT v. Galileo International Inc.

224 CTR 251 · High Court

citing judgments

If the income attributable to a Permanent Establishment (PE) in India is less than the remuneration paid to a dependent agent, the assessment is extinguished and no further computation of income is required.

Galileo International Inc. v. DCIT

19 SOT 257 · 2008 · ITAT

citing judgments

A Computer Reservation System (CRS) installed at the premises of Indian subscribers can constitute a Permanent Establishment (PE) in India, and a portion of income from Indian operations may be taxable in India, potentially exhausted by commission paid to Indian distributors.

Western Union Financial Services Inc. v. ADIT

104 ITD 34 · 2007 · ITAT

citing judgments

Software installed in India granting access to an assessee's mainframe located outside India does not constitute a Permanent Establishment (PE) in India. Agents are not considered to have an agency PE if they are not economically dependent on the assessee and lack the authority to conclude contracts.

Judgments citing dependent agent PE

Amadeus It Group Sa, Spain vs. ACIT, Circle-1(1)(1) Int.Taxation, New Delhi

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

ITA 1742/DEL/2023[2020-21]Status: DisposedITAT Delhi16 Oct 2023AY 2020-21

Bench: Shri G.S. Pannu, Hon’Ble & Ms. Astha Chandraasstt. Year: 2020-21

For Appellant: Sh. Neeraj Jain &For Respondent: Shri Vizay B. Vasanta, CIT-DR

Section 143(3)

support to the travel agent and therefore, the distribution fee paid to AIPL was not at arm's length and consequently, AIPL constituted dependent agent PE of the appellant. 5.2 That the DRP/ assessing officer erred on facts and in law in alleging that the appellant exercised control over ... concerned. The Tribunal held that the respondents herein constituted Permanent Establishment (PE) in two forms, namely, fixed place PE and dependent agent PE (DAPE). At the same time, the Tribunal also held that the Lion's share of activity was processed in the host computers in USA/Europe and that

Adobe Systems Software Ireland Limited, Ireland vs. ACIT Circle 1(1)(1) International Taxation, New Delhi

In the result, the appeal of the assessee is treated as allowed for statistical purposes subject to the directions contained in para 11, 18 and 19 above

ITA 913/DEL/2023[2020-21]Status: DisposedITAT Delhi12 Oct 2023AY 2020-21

Bench: Shri G.S. Pannu, Hon’Ble & Ms. Astha Chandraasstt. Year: 2020-21

For Appellant: Shri Ravi Sharma, AdvocateFor Respondent: Shri Vizay B. Vasanta, CIT-DR

Section 143(3)Section 144C(13)

independent entity. 1.3 That the Ld. AO and Hon'ble DRP grossly erred on the facts by concluding that Adobe India is a Dependent Agent PE of the Appellant and the agent is actively involved in sales and supply of software distributed by the Appellant, without appreciating that the sales ... independent third-party distributors. 1.4 That the Ld. AO and Hon'ble DRP erred in law in holding Adobe India to be a Dependent Agent PE of the Appellant without bringing any cogent documentary evidence on record to substantiate the above statement. 1.5 That the Ld. AO erred

Rga International Reinsurance Company Designated Authority Compqny, Mumbai vs. DCIT (International Taxation) 4(1) (1), Mumbai

In the result, appeal filed by the assessee is allowed

ITA 803/MUM/2022[2018-19]Status: DisposedITAT Mumbai06 Sept 2023AY 2018-19

Bench: Shri S. Rifaur Rahman, Hon'Ble & Shri Rahul Chaudhary, Hon'Ble

Section 143(2)Section 144C(5)

case in law, and based on the directions of the Hon'ble DRP, erred in concluding that RGA Services acts as a Dependent Agent PE of the Appellant in India as per Article 5(6) of the India-Ireland Tax Treaty. 4. Ground 4 The learned ... habitually exercise an authority to conclude contracts or maintain and deliver merchandise or secure orders for RIRC and hence is not a dependent Agent PE of the Assessee as alleged by the learned AO/ DRP. 20. In this regard, the Assessee wishes to places reliance on the decision

Ge Global Parts & Products Gmbh, Switzerland vs. ACIT, Circle-1(3)(1), Int. Taxation, New Delhi

In the result, all the appeals are partly allowed, as indicated

ITA 2036/DEL/2022[2018-19]Status: DisposedITAT Delhi25 Jul 2023AY 2018-19

Bench: Shri G.S. Pannu, Hon’Ble & Shri Saktijit Deyassessment Year: 2019-20 With Assessment Year: 2018-19 Ge Energy Parts Inc., Vs. Acit, C/O-Plot No. 1-14, Tower 5, Circle 1(13)(1), Jaypee Wishtown, International Taxation, Sector 128, New Delhi Noida Pan :Aaccg2798N (Appellant) (Respondent) With Assessment Year: 2019-20 With Assessment Year: 2018-19 Ge Global Parts & Products Vs. Acit, Gmbh, Circle 1(3)(1), Plot No. 1-14, Tower 5, International Taxation, Jaypee Wishtown, New Delhi Sector 128, Noida Pan :Aagcg3668K (Appellant) (Respondent)

Section 143(3)Section 144C(13)

judicial precedents cited before us. The short issue arising for consideration is whether the assessee had a PE, either fixed place PE or dependent agent PE, in India during the year under consideration. No doubt, the past assessment history of the assessee reveals that existence of PE in India ... impugned assessment year, it has to be concluded that the assessee did not have any PE, either fixed place PE or dependent agent PE, in India in the year under consideration. We again reiterate, our aforesaid conclusion is purely based on the facts involved in the impugned assessment year

Ge Global Parts & Products Gmbh, Switzerland vs. ACIT, Circle-1(3)(1) Int. Taxation, New Delhi

In the result, all the appeals are partly allowed, as indicated

ITA 2035/DEL/2022[2019-20]Status: DisposedITAT Delhi25 Jul 2023AY 2019-20

Section 143(3)Section 144C(13)

Ge Energy Parts Inc., Usa vs. ACIT, Circle-1(3)(1) Int. Taxation, New Delhi

In the result, all the appeals are partly allowed, as indicated

ITA 2034/DEL/2022[2018-19]Status: DisposedITAT Delhi25 Jul 2023AY 2018-19

Section 143(3)Section 144C(13)

G E Energy Parts Inc., Usa vs. ACIT Circle-1(13)(1) Internationaltaxation, New Delhi

In the result, all the appeals are partly allowed, as indicated

ITA 2033/DEL/2022[2019-20]Status: DisposedITAT Delhi25 Jul 2023AY 2019-20

Section 143(3)Section 144C(13)