Accessing The Premises Of A JV Company For Technical Assistance Can't Be Treated As Permanent Establishment Under DTAA : Delhi ITAT
3 years ago

Accessing The Premises Of A JV Company For Technical Assistance Can't Be Treated As Permanent Establishment Under DTAA : Delhi ITAT

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The Delhi Bench of ITAT, consisting of members N.K. The Assessing Officer held that during the relevant assessment years, FCC Rico Ltd.'s premises in India served as a branch and office of the Assessee and therefore the Assessee had a business connection in India under section 9 of the Income Tax Act, 1961 and a Fixed Place in India under Article 5 of the India-Japan Double Taxation Avoidance Agreement. The Assessee FCC Co. Ltd averred that since the goods sold by the Assessee were manufactured and sold outside India and the sale consideration was also received outside India, the Assessee could not be said to have carried out any operation in India in relation to the raw materials and capital goods supplied by it to FCC Rico Ltd. The ITAT held that in the present case the access to the factory premises in India to FCC Co. Ltd was only for a limited purpose of providing technical assistance to its Joint Venture Company, FCC Rico Ltd., with respect to its business. The ITAT held that since the goods sold by the Assessee were manufactured and sold outside India and the sale consideration was also received outside India, the Assessee could not be said to have carried out any operation in India and therefore, it had no Fixed Place or Permanent Establishment in India.

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History of this topic

Survey Report On Existence Of 'Permanent Establishment' In Tax Year Not Relevant For Previous/Future AYs: Delhi HC Grants Relief To Swiss Co
2 weeks, 6 days ago

Survey Report On Existence Of 'Permanent Establishment' In Tax Year Not Relevant For Previous/Future AYs: Delhi HC Grants Relief To Swiss Co

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The Delhi High Court has held that the existence of a foreign entity's Permanent Establishment in India is required to be determined in law for each year separately on the basis of the scope, extent, nature and duration of activities in each year. A division bench of Justices Yashwant Varma and Ravinder Dudeja made the observation while dealing with a …

Whether Entity Is 'Permanent Establishment' Is A Fact-Specific Issue, Must Be Examined Separately For Different Tax Periods: Delhi High Court
2 months, 1 week ago

Whether Entity Is 'Permanent Establishment' Is A Fact-Specific Issue, Must Be Examined Separately For Different Tax Periods: Delhi High Court

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The Delhi High Court has held that whether an entity is a Permanent Establishment of a foreign company or not is a “fact-specific” issue which must be examined separately for different tax periods. A division bench of Justices Yashwant Varma and Harish Vaidyanathan Shankar observed, “The position of a PE being a facts-specific issue and thus liable to be examined …

ITAT Cannot Decide On Grounds Not Addressed By Commissioner Of Income Tax (Appeals): Delhi High Court
2 months, 1 week ago

ITAT Cannot Decide On Grounds Not Addressed By Commissioner Of Income Tax (Appeals): Delhi High Court

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The Delhi High Court recently said aside an order passed by the Income Tax Appellate Tribunal, deciding grounds that did not arise from the impugned order passed by the Commissioner of Income Tax. A division bench of Acting Chief Justice Vibhu Bakhru and Justice Tushar Rao Gedela observed, “The Assessee's challenge to the addition of ₹4,30,00,000/- under Section 68 of …

If Assessee Produces Accounts, AO Must Be Satisfied That Accommodation Entries Exist Before Proceeding U/S 148 Of Income Tax Act: Delhi HC
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2 months, 1 week ago

If Assessee Produces Accounts, AO Must Be Satisfied That Accommodation Entries Exist Before Proceeding U/S 148 Of Income Tax Act: Delhi HC

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The Delhi High Court has held that an Assessing Officer is required to be satisfied that accommodation entries as alleged in show cause notice under Section 148A of the Income Tax Act 1961 exist, particularly where the assessee produces its accounts. Clearly, the AO is required to be satisfied that such entries exists particularly where the petitioner had produced its …

DTAA | Foreign Company Providing Software To Its Agents In India Doesn't Mean It Has 'Permanent Establishment' In India: Delhi HC
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3 months ago

DTAA | Foreign Company Providing Software To Its Agents In India Doesn't Mean It Has 'Permanent Establishment' In India: Delhi HC

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The Delhi High Court has held that 'software' being an intangible property, cannot alone constitute 'Permanent Establishment' of a foreign entity in India. In the case at hand, the issue before the Court was whether the Voyager software provided by Western Union Financial Services Inc. to its agents in India would constitute PE, for the purposes of taxation in India. …

DTAA | Foreign Company Providing Software To Its Agents In India Doesn't Mean It Has 'Permanent Establishment' In India: Delhi HC
Trending News
3 months ago

DTAA | Foreign Company Providing Software To Its Agents In India Doesn't Mean It Has 'Permanent Establishment' In India: Delhi HC

Live Law  

The Delhi High Court has held that 'software' being an intangible property, cannot alone constitute 'Permanent Establishment' of a foreign entity in India. In the case at hand, the issue before the Court was whether the Voyager software provided by Western Union Financial Services Inc. to its agents in India would constitute PE, for the purposes of taxation in India. …

Assessing Officer Not Required To Examine Commercial Expediency Of Transaction When Evaluating Assessee's Explanation U/S 68 Of IT Act: Delhi HC
4 months ago

Assessing Officer Not Required To Examine Commercial Expediency Of Transaction When Evaluating Assessee's Explanation U/S 68 Of IT Act: Delhi HC

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The Delhi High Court has made it clear that once an assessee offers explanation about nature and source of a credit transaction standing in its books, the burden of proof to show that such explanation is unsatisfactory shifts on the Assessing Officer.A division bench of Justices Vibhu Bakhru and Swarana Kanta Sharma further held that in evaluating the transaction so …

Accepting Submissions Of Assessee Cannot Be Said As Faulty If Assessment Was Made By National E-Assessment Centre: Indore ITAT Quashes Sec 263 Order
1 year ago

Accepting Submissions Of Assessee Cannot Be Said As Faulty If Assessment Was Made By National E-Assessment Centre: Indore ITAT Quashes Sec 263 Order

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While holding the revision-order passed by PCIT as invalid, the Indore ITAT recently clarified that I-T authorities cannot punish the assessee by merely saying that the payee has not filed income-tax return. The Bench of Vijay Pal Rao and B.M Biyani observed that “the action of AO in accepting the replies/ submissions of assessee cannot not lack bona fides and …

Taxpayer Staying In India For Less Than 182 Days As Per Exp 1(A) To Sec 6(1) Of I-T Act, Entitles To 'Non-Resident' Status: Mumbai ITAT
1 year, 2 months ago

Taxpayer Staying In India For Less Than 182 Days As Per Exp 1(A) To Sec 6(1) Of I-T Act, Entitles To 'Non-Resident' Status: Mumbai ITAT

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While opining that even if the taxpayer has left India for the purpose of business or profession, the same shall be considered for purpose of employment outside India under Explanation 1 to Section 6 of Income tax Act, 1961, the Mumbai ITAT held that assessee has rightly claimed to be a 'non-resident' as he stayed in India only for a …

Provisions Of Section 44BB Not Applicable In Absence Of PE: ITAT
1 year, 9 months ago

Provisions Of Section 44BB Not Applicable In Absence Of PE: ITAT

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The Delhi Bench of the Income Tax Appellate Tribunal has held that the provisions of Section 44BB of the Income Tax Act are not applicable in the absence of a permanent establishment.The bench of Kul Bharat and Shamim Yahya has observed that the burden of proving the existence of PE lies on the department, which has not been discharged. The …

Payment Received From Foreign Company On Account Of Business Support Services Not Taxable As FTS: ITAT
2 years ago

Payment Received From Foreign Company On Account Of Business Support Services Not Taxable As FTS: ITAT

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The Delhi Bench of the Income Tax Appellate Tribunal has held that payments received from foreign companies on account of business support services are held to be taxable as fees for technical services.The two-member bench of Anubhav Sharma and Shamim Yahya has observed that Article 12 of the India-Netherlands DTAA reveals that it does. The Delhi Bench of the Income …

Impossible For A Company To Get Its Accounts Audited On 31st March And Get The Approval In AGM On The Same Date: ITAT Upholds Addition
2 years, 2 months ago

Impossible For A Company To Get Its Accounts Audited On 31st March And Get The Approval In AGM On The Same Date: ITAT Upholds Addition

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The Delhi Bench of the Income Tax Appellate Tribunal has held that it is impossible for a company to get its accounts audited on 31st March and present the same for approval in the Annual General Meeting on March 31st.The two-member bench of Kul Bharat and N.K. The Delhi Bench of the Income Tax Appellate Tribunal has held that it …

No Tax Implications On Business Profits Earned On Reinsurance Business In Absence Of Fixed Place PE in India: ITAT
2 years, 4 months ago

No Tax Implications On Business Profits Earned On Reinsurance Business In Absence Of Fixed Place PE in India: ITAT

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The Mumbai Bench of the Income Tax Appellate Tribunal has held that there are no tax implications on business profits earned on account of the reinsurance business in the absence of a fixed place permanent establishment in India.The two-member bench headed by Pramod Kumar and Anikesh Banerjee has observed that the existence of the dependent. The Mumbai Bench of the …

Existence Of Dependent Agent Permanent Establishment (DAPE) Is Of No Tax Consequence, If Agent Is Paid Arm's Length Remuneration: ITAT
2 years, 4 months ago

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

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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 …

Payment Made By Assessee To Non-Resident Supplier Amount To "Royalty" And Liable To Deduct TDS: ITAT
2 years, 5 months ago

Payment Made By Assessee To Non-Resident Supplier Amount To "Royalty" And Liable To Deduct TDS: ITAT

Live Law  

The Ahmedabad Bench of the Income Tax Appellate Tribunal has held that the payment made by the assessee to the non-resident supplier would amount to royalty and there is an obligation on the part of the assessee to deduct tax at source.The two-member bench of T.R. The Ahmedabad Bench of the Income Tax Appellate Tribunal has held that the payment …

Inland Haulage Charges Received By Shipping Companies Not Taxable As Business Profit: ITAT Mumbai
2 years, 8 months ago

Inland Haulage Charges Received By Shipping Companies Not Taxable As Business Profit: ITAT Mumbai

Live Law  

The Mumbai Bench of ITAT has reiterated that the activity of Inland Haulage is directly connected with the transportation of goods in international traffic and thus, Inland Haulage Charges are not taxable as business profit in India in view of Article 8 of the India-UAE DTAA. The Bench, consisting of Vikas Awasthy and Gagan Goyal, held that since the activity …

Inland Haulage Charges Received By Shipping Companies Not Taxable As Business Profit: ITAT Mumbai
2 years, 8 months ago

Inland Haulage Charges Received By Shipping Companies Not Taxable As Business Profit: ITAT Mumbai

Live Law  

The Mumbai Bench of ITAT has reiterated that the activity of Inland Haulage is directly connected with the transportation of goods in international traffic and thus, Inland Haulage Charges are not taxable as business profit in India in view of Article 8 of the India-UAE DTAA. The Bench, consisting of Vikas Awasthy and Gagan Goyal, held that since the activity …

AO's claim That The Assessee Is Only Into Job Work And Not Manufacturing Rejected, Deduction Allowed By ITAT Delhi
3 years ago

AO's claim That The Assessee Is Only Into Job Work And Not Manufacturing Rejected, Deduction Allowed By ITAT Delhi

Live Law  

The Delhi Bench of the Income Tax Appellate Tribunal while allowing the deduction under Income Tax Act has rejected the claim of AO that the assessee is only into job work and not manufacturing. The assessee electronically filed its return of income, declaring nil income after claiming a deduction under section 80IC of the Income Tax Act. During the course …

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