“agency PE”

International TaxDTAA Article 5DTAA Article 5218 judgments

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

Leading authorities on agency 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.

Set Satellite Pte Ltd. v. CIT

307 ITR 205 · 2008 · High Court

citing judgments

If a Dependent Agency Permanent Establishment (DAPE) is remunerated at arm's length based on transfer pricing principles, no further profits can be attributed to the foreign enterprise. The principles of profit attribution under DTAA Article 7 are pari-materia to Section 9(1)(i) of the Income Tax Act.

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.

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.

Trib.) 4) TVM Limited v. Commissioner of Income-tax

237 ITR 230 · 1999 · Reported

citing judgments

A non-resident entity's activities in India are assessed for Permanent Establishment (PE) under Double Taxation Avoidance Agreements, considering types like fixed place, construction, and agency PE, and the applicability of presumptive taxation under sections such as 44BBB.

4) DIT v. B4U International

374 ITR 453 · 2015 · High Court

citing judgments

An agent is considered independent for the purposes of Article 5(5) of the India-Mauritius treaty if the agent works for more than one principal, regardless of whether the principal has only one agent in India. The focus is on the agent's independence, not the principal's exclusive use of an agent.

Co. Ltd. v. DDIT(IT)

55 Taxmann.com 520 · 2015 · ITAT

citing judgments

A foreign company engaged in the reinsurance business is not considered to have a fixed permanent establishment or an agency permanent establishment in India through its Indian subsidiary, provided specific conditions under Article 5 of the relevant Double Taxation Avoidance Agreement are not met.

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 agency PE

Amadeus It Group Sa, Delhi vs. Deputy Commissioner of Income-Tax, Civic Center

In the result, the appeal of the assessee in ITA No

ITA 1494/DEL/2025[2022-23]Status: DisposedITAT Delhi04 Jul 2025AY 2022-23

Bench: Shri Vikas Awasthy & Shri Naveen Chandra

For Appellant: Shri Neeraj Jain, AdvFor Respondent: Ms. Anjula Jain, CIT- DR

Section 143(2)Section 143(3)Section 44DSection 9(1)(vi)

assessee in India under Article 5(1) of the India-Spain Tax Treaty. Further, the Assessing Officer also held the assessee to be dependent agency PE in terms of paragraph 5(4) of the India Spain Tax Treaty. The DRP as well Page 9 of 13 ITA No. 1494/DEL/2025

Hapag Liyod Aktiengesellschaft, Mumbai vs. The Deputy Commissioner of Income Tax -2(2)(2), Mumbai

In the result, the appeal is accordingly allowed for statistical purposes in the above terms

ITA 1738/MUM/2025[2022-23]Status: DisposedITAT Mumbai27 Jun 2025AY 2022-23

Bench: Ms. Padmavathy S & Shri Raj Kumar Chauhanhapag-Llyod Aktiengesellschaft Vs. The Deputy Commissioner Of C/O Hapag-Lloyd India Pvt. Ltd, Income Tax International Tax 501 Satellite Gazebo, B Wing, 5Th Circle-2(2)(2) Floor, Guru Hargovindji Marg, Room No.1606, 16Th Floor, Air Andheri East, Mumbai-400993 India Building, Nariman Point, Pan – Aaach0979G Mumbai-400021 (Appellant) (Respondent)

Section 142(1)Section 143(2)Section 143(3)Section 144C(1)Section 144C(5)

learned AO based on the directions of DRP failed to appreciate that even if it Hapag-Llyod Aktiengesellschaft held that HLIPL constitutes an agency PE of the appellant in India, no profits could be attributed to the agency PE in India since the appellant has remunerated HLIPL

Rga International Reinsurance Company Designated Activity Company, Ireland vs. Deputy Commissioner of Income Tax (International Tax) - Circle 4(1)(1), Mumbai

Appeal of the assessee is partly allowed

ITA 1092/MUM/2025[2022-23]Status: DisposedITAT Mumbai25 Jun 2025AY 2022-23

Bench: Ms Padmavathy S, Am & Shri Raj Kumar Chauhan, Jm

For Appellant: Shri Satya Pal Kumar, CIT-DR

Section 143(3)Section 144C(13)Section 153Section 9(1)(i)

paid to the dependent agent then nothing further would be left to be taxed in the hands of the foreign enterprise having a dependent agency PE ('DAPE') in India. In other words, payment of ALP to the dependent agent would extinguish the tax liability of a foreign company having ... discussions, we hold that the assessee did not have a fixed place permanent establishment in India, that the question of assessee having a dependent agency PE is wholly academic in the sense that, as the law stands now, the existence of the DAPE is wholly tax neutral in India. Accordingly

International Air Transport Association, Mumbai (for Sending Notices) vs. Deputy Commissioner of Income Tax (International Taxation) - Circle 2(2)(1), Mumbai

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

ITA 3330/MUM/2023[2020-21]Status: DisposedITAT Mumbai29 Apr 2025AY 2020-21

Bench: Smt. Beena Pillai & Smt. Renu Jauhriआयकर अपील सं./Ita No. 3330/Mum/2023 (निर्धारण वर्ा / Assessment Year :2020-21) International Air V/S. Dcit (It), Circle 2(2)(1), Transport Association बिधम Mumbai C/O Ernst & Young Llp Room No. 1722, 17Th Floor, 14Th Floor, The Ruby, 29, Air India Building, Senapati Bapat Marg, Nariman Point, Mumbai, Dadar (West), Mumbai, Maharashtra-400021 Maharashtra-400028 स्थायी लेखा सं./जीआइआर सं./Pan/Gir No: Aacci4695N Appellant/अपीलधर्थी .. Respondent/प्रनिवधदी

For Appellant: Shri Porus Kaka and Shri DiveshFor Respondent: Shri Krishna Kumar

IN THE INCOME-TAX APPELLATE TRIBUNAL “I” BENCH, MUMBAI BEFORE SMT. BEENA PILLAI, JUDICIAL MEMBER & SMT. RENU JAUHRI, ACCOUNTANT MEMBER

Hempel Singapore Pte Ltd, Mumbai vs. Deputy Commissioner of Income Tax International Taxation Circle 2(2)(2), Mumbai

Appeal are allowed

ITA 946/MUM/2025[2022-23]Status: DisposedITAT Mumbai11 Apr 2025AY 2022-23

Bench: Shri Pawan Singh, Jm & Ms Padmavathy S, Am

For Respondent: Shri Krishna Kumar- Sr. DR

Section 143(3)Section 144BSection 144C(13)Section 147Section 153Section 9

plus 8.17% mark-up as commission on sales effected through the agent in India. There is no dispute about the existence of assessee's agency PE in India. A foreign company is liable to be taxed in India on so much of its business profits as is attributable ... case of Hempel India for the instant assessment year. Therefore, according to the assessee, no further income could be attributable to its agency PE again. In other words, as per the assessee, once transfer pricing analysis of the transaction between assessee and its agent in India has been undertaken, there

DCIT (It) 3(2)(2), Mumbai vs. Misc Berhard, Mumbai

In the result, the appeal filed by the revenue is dismissed

ITA 6644/MUM/2016[2012-13]Status: DisposedITAT Mumbai09 Apr 2025AY 2012-13

Bench: Shri Pawan Singh & Ms. Padmavathy S(Physical Hearing) बनाम Dcit (It) – 3(2)(2), Mumbai M/S. Misc Berhard C/O Msc Agency (India) Pvt. Ltd., Vs Himalayas, 2Nd Floor, Geetmala Complex, Near To Shah Industrial Estate, Deonar, Govandi, Mumbai – 400088. Pan: Aaccm 1736 E अपीलाथ"/Appellant ""थ" /Respondent

Section 254(1)

PE under Article 5(2)(h) of the Tax Treaty; 6. That the Ld. AO has erred in holding MISC Agencies as an agency PE under Article 5(5) of the Tax Treaty; 7. That the Ld. AO erred in not appreciating that Article 5(7) of the Tax Treaty

Cornerstone Ondemand Limited, Mumbai vs. ACIT(It)-2(1)(1), Mumbai

ITA 5677/MUM/2024[2019-20]Status: DisposedITAT Mumbai28 Mar 2025AY 2019-20

Bench: Shri Amit Shukla, Jm & Ms Padmavathy S, Am

For Appellant: Shri Hiten Thakkar, AR

Section 270ASection 271(1)(c)