“Section 9(1)(vii)(d)”
The decision most relied on for Section 9(1)(vii)(d) is National Petroleum Construction Company v. DIT (383 ITR 648), cited in 69 judgments on BharatTax.
Leading authorities on Section 9(1)(vii)(d)
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.
When contractual obligations are for an entire project, only the income reasonably attributable to operations carried on in India is deemed to accrue or arise in India and falls within the tax net. This principle applies even in consortium arrangements where members have broader contractual roles, and income from supply of equipment should be characterized appropriately.
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.
The case is authority for the principle that where an Indian entity is given authority to execute local work but overall responsibility remains with a foreign entity, this does not necessarily constitute a consortium, and the foreign entity's liability should be assessed based on the specific contractual terms.
