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2011 (8) TMI 552 - AT - Income TaxExistence of Permanent Establishment (PE) - activity relating to outside India operation - Double Taxation Avoidance Agreement (DTAA) between India and Korea. - held that:- As pointed out earlier the way the contract has to proceed, Mumbai project office of the assessee has to play a vital role in the execution of entire contract and if assessee wants to contend otherwise, the onus is on assessee and not on the revenue. No material has been brought on record by the assessee to show that its Mumbai office does not have any role to play in the execution of contract, therefore, the argument of the assessee cannot be accepted that the Mumbai project office has carried out only preparatory or auxiliary activities so as to bring the PE of the assessee under exclusionary Article 5.4. - Argument of assessee rejected - PE of the assessee existed in India in accordance with Article 5.1 and 5.2 - decided in favour of revenue. Attribution of outside Income to the PE of the assessee - held that:- The AO in the present case has attributed 25% of its outside India activity as income related to PE of the assessee to India. But we find no material on record to support such attribution particularly in absence of any reasoning or basis given for that. Necessary material in this respect has to be brought on record to arrive at a proper conclusion that what percentage will be appropriate to be attributed to the PE of the assessee in India during the year under consideration. - Matter remanded back to AO.
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