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2018 (2) TMI 1524 - AT - Income TaxIncome accrued in India - shipping profits to be not taxable in India - PE in India - Held that:- Freight Connection is an independent agent who acts in its ordinary course of its business and whose activities are not devoted exclusively or almost exclusively on behalf of the assessee. Therefore, it is held that the assessee does not have an Agency PE in India and the CIT(A) was right in so holding for the AY 1998-99 and the successor CIT(A) was wrong in taking a contrary view for the subsequent assessment years. Thus hold that even if the assessee's case is not covered by Article 8, the business profits would not be chargeable to Indian tax as it does not carry on business in India through a permanent establishment (an agency PE) as per articles 7 and 5 of the DTAA. - Decided against revenue Effective management of the respondent is neither in Mauritius nor in India but in a third country - benefit of article-8 - Held that:- Effective management can be only in between two contracting state is not correct and as per the facts narrated above, we are of the considered view that the effective management of the assessee is neither in Mauritius nor in India and we are in agreement with the views of Mr. Klaus Vogel, who is an eminent authority of International Taxation, that if the effective management of an enterprise is not in one of the contracting state, but is situated in the third state, the benefit of article-8, cannot be extended. - Decided against assessee.
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