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TMI Blog2016 (9) TMI 344X X X X Extracts X X X X X X X X Extracts X X X X ..... applicant. The reliance of Revenue, therefore, on Article 7 of the Treaty is completely uncalled for as Article 7 specifically deals with business income. Viewed from any angle there cannot be a PE as defined in Article 5 of the Treaty as indeed there is none in India. It is to be seen that every time the program is undertaken in India, it is Northwest which has arranged for the place for conducting the programs. Northwest need not every time arrange for a same place. It may happen that Northwest may arrange different location for conducting the program. On this ground also there cannot be any fixed place of business on the part of the applicant. Therefore, on both the counts namely on the question of business and on the question of PE, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... greement which are of the duration of 4 days, 5 days, 10 days, 12 days etc. It is clear from the facts stated that the Indian counterpart i.e. Northwest was to arrange the place for conducting these short duration programs in India. It is also clarified that relationship between the applicant and Northwest would be neither of independent contractor nor a joint venture nor would it be of the nature of employment agency or partnership. The applicant has raised questions regarding the taxability of the consideration that the applicant earns from Northwest for holding these educational programs. 3. The questions posed are as under:- Que.1 Whether Program Fee received by the Applicant in terms of Clause III and IV of the Agreement is char ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t any rate Royalty particularly because of the provision of Article 12(5)(C). The question regarding PE had propped up in that application also on which we took a view that the applicant in that case could not be said to have a PE, particularly in view of the earlier Ruling of this Authority in AAR No.1037 of 2011 dated 20th September,2013 Eruditus Educational Private Limited Vs. DIT International Taxation, Chennai. 7. As has been stated earlier, the only serious objection that the Revenue seems to have is that there is a PE of the applicant in India. We are afraid the contention raised by the Revenue is not correct. Firstly, the activity of the applicant cannot be said to be a business activity particularly because the applicant is regi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fore, it cannot be covered in Royalty also. 10. The applicant must succeed. We, therefore, answer the questions as under:- Que.1 Whether Program Fee received by the Applicant in terms of Clause III and IV of the Agreement is chargeable to tax in India as fees for included services within the meaning of the said term under Article 12 of the India-US Double Tax Avoidance Agreement and/or the provisions of Section 9(1)(vii) of the Income tax Act, 1961 and, therefore, subject to withholding tax under Section 195 of the Income-tax Act, 1961? Ans. In the negative i.e. the program fee is held to be non-taxable. Que.2 Whether in the facts and circumstances of the case, the activities undertaken by the Applicant in India, viz., teachin ..... X X X X Extracts X X X X X X X X Extracts X X X X
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