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2014 (1) TMI 1356 - ITAT CHENNAIPermanent establishment – Levy of tax – DTAA between India and Malaysia - Whether the Malaysian Branch of the assessee-company is a permanent establishment in Malaysia – Held that:- The decision in Union of India & another Vs. Azadi Bachao Andolan & another reported as [2003 (10) TMI 5 - SUPREME Court] followed - the Malaysian branch of the assessee has the status of permanent establishment in Malaysia - the income of Malaysian branch of the assessee is income earned in Malaysia and by virtue of DTAA that income is liable for taxation only in Malaysia. There is nothing on record to deny the Malaysian branch of the assessee company the status of a permanent establishment operating in Malaysia - the taxability of the income of the assessee and its Malaysian branch is governed by the DTAA entered into between India and Malaysia - The income generated in the hands of the Malaysian branch of the assessee company is rent and interest income - They are all generated from assets situated outside India – thus, as per the terms of the DTAA the income of Malaysian branch of the assessee company is liable for taxation in Malaysia - Once it is liable for taxation in Malaysia, DTAA makes it clear that the said income is not subjected to the jurisdiction of Indian taxation – Decided against Revenue.
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