Income Tax - Highlights / Catch Notes

The Delhi High Court examined taxability in India of interest ...

Interest received by Indian PE from Head Office not taxable in India as per India-US DTAA. Branch offices not separate entities.

Case Laws Income Tax

May 31, 2024

The Delhi High Court examined taxability in India of interest received by an Indian Permanent Establishment (PE) from its Head Office/Overseas Branch under the India-US Double Taxation Avoidance Agreement (DTAA). The court referred to the Credit Agricole case, emphasizing that branch offices are not separate legal entities. The court noted that the Explanation to Section 9(1)(v) of the Income Tax Act deals with banking entities, deeming remittances to the Head Office as accruing in India. The court found that the PE of a banking enterprise is not a separate legal entity, rejecting the application of the Explanation introduced in 2016. Referring to the Kikabhai Premchand KT case, the court highlighted the absurdity of a person profiting from itself. The court upheld the view that the branch office cannot profit from itself, and the DTAA provisions for banking enterprises would apply.

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The Delhi High Court examined taxability in India of interest ...

Interest received by Indian PE from Head Office not taxable in India as per India-US DTAA. Branch offices not separate entities.

Case Laws Income Tax

May 31, 2024

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