Taxability of Income in India - international taxation, ...

ITAT Rules on PE and Treaty Benefits: Valid Tax Residency Certificate Grants UK Resident Status, No PE in India Found.

April 6, 2024

Case Laws     Income Tax     AT

Taxability of Income in India - international taxation, permanent establishment (PE), and treaty benefits under the India-UK Double Taxation Avoidance Agreement (DTAA). - The ITAT upheld this contention of the assessee, emphasizing that possession of a valid Tax Residency Certificate indeed qualifies the entity as a resident of the UK for tax purposes, thereby entitling it to treaty benefits under the India-UK DTAA. - Further, the ITAT concluded that the Indian company acted independently, without the authority to conclude contracts on behalf of the appellant. Hence, it was determined that there was no Fixed Place PE or Dependent Agent PE in India for the appellant. - The ITAT disagreed with the lower authorities' attribution of profits to a presumed PE in India. It clarified that the appellant's business activities, particularly related to offshore supplies, did not constitute a business connection in India.

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