Indian-Subsidiary Which Is Compensated At Arm's Length Can't Be Construed As Dependent Agent PE: Delhi High Court
4 months ago

Indian-Subsidiary Which Is Compensated At Arm's Length Can't Be Construed As Dependent Agent PE: Delhi High Court

Live Law  

Finding that subsidiary company is only undertaking marketing enterprise, whereas contracts are finalized and signed by the assessee outside India, the Delhi High Court held that KIPL cannot be said to be habitually securing and concluding order on behalf of assessee, and hence it is not Dependent Agent PE of Assessee. The Division Bench comprising Justice Yashwant Varma and Justice Ravinder Dudeja observed that “for an enterprise to be considered as habitually securing orders wholly for the other enterprise, it is essential that the enterprise frequently accepts orders on behalf of the other enterprise or habitually represents to persons offering to buy goods or merchandise that acceptance of an order by such enterprise constitutes the agreement of the other enterprise to supply goods or merchandise”. Facts of the case: The Revenue Department had approached the High Court challenging the order whereby the Tribunal had held that when KIPL has been remunerated by the assessee for commission activities on arm's length basis, no further attribution is required. Since KIPL has been remunerated by assessee for commission activities on arm's length basis, no further attribution is required, added the Bench.

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History of this topic

Existence Of Dependent Agent Permanent Establishment (DAPE) Is Of No Tax Consequence, If Agent Is Paid Arm's Length Remuneration: ITAT
2 years, 2 months ago

Existence Of Dependent Agent Permanent Establishment (DAPE) Is Of No Tax Consequence, If Agent Is Paid Arm's Length Remuneration: ITAT

Live Law  

The Mumbai bench of the Income Tax Appellate Tribunal has ruled that the business profits embedded in the reinsurance premium received by a non-resident reinsurance company, is not taxable in India if the company has no permanent establishment in India which is at its disposal. The bench of Pramod Kumar and Anikesh Banerjee held that unless it is shown that …

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