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2019 (6) TMI 1502 - ITAT MUMBAIPermanent Establishment (PE) of the assessee in India - assessee is a Limited Liability Partnership and is a tax resident of United Kingdom (UK) and offers legal consultancy services to its clients all over the world including India - India-U.K. Tax Treaty - HELD THAT:- Departmental Representative has made an attempt to make out a case by interpreting the expression "any twelve months period" as used in Article-5(2)(k)(i) of the India-U.K. Tax Treaty in a different manner, however, we are not impressed with the same. In our considered opinion, the issue is squarely covered by the decision of the Co-ordinate Bench in assessee's own case for the assessment year 2012-13 in Linklaters LLP's case [2018 (9) TMI 1741 - ITAT MUMBAI] as per the provisions of domestic law, the 12 month period would mean the previous year or the financial year which is the unit for which the income of a person is taxable. If the provisions of Article 5(2)(k)(i) of the India-UK DTAA is read harmoniously with the provisions of the Act referred to above, it will be fair and reasonable to conclude that the expression “any 12 month period” mentioned in Article 5(2)(k)(i) of the India-U.K. DTAA has to be construed to mean the previous year or financial year as per section 3 of the Act, since, the income is sought to be taxed in India. It has to be seen whether the employees or personnel of the assessee have rendered services in India for a period aggregating to 90 days or more in financial year 2011-12 to constitute a PE. As per the chart submitted by the assessee it is claimed that the employees and personnel of the assessee were situated in India for rendering services for a period aggregating to 77 days. Since, the aforesaid factual aspect has not been verified by the Departmental Authorities as the assessee did not raise this issue before them, we are inclined to restore the issue to the Assessing Officer for adjudication keeping in view of our observations hereinabove and only after due opportunity of being heard to the assessee. This ground is allowed for statistical purposes. Denial of India-U.K. Tax Treaty benefit - denial on the ground that income of the assessee is not taxable in U.K., hence, it cannot be treated as a resident of U.K. under Article-4(1) of the India-UK Tax Treaty - HELD THAT:- As relying on assessee's own case for the assessment year 2012-13 in Linklaters LLP's case [2018 (9) TMI 1741 - ITAT MUMBAI] we hold that the income received by the assessee not being in the nature of FTS as envisaged under Article-13 of the India-U.K. DTAA, cannot be brought to tax by applying the provisions of section 9(1)(vii) of the Act, since, the assessee is entitled to claim the benefit of India-U.K. DTAA. Applicability of Article-15 of the India-U.K. Tax Treaty - HELD THAT:- As relying on own case we hold that income received by the assessee will not be taxable under Article-15 of the India-U.K. Tax Treaty. This ground is allowed. As we have held that the amount received by the assessee cannot be treated as fee for technical services. That being the case, it can only be treated as business profit of the assessee. However, since we have held that the assessee did not have any PE in India during the year under consideration, the business profit cannot be brought to tax in India.
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