Home Case Index All Cases Income Tax Income Tax + AT Income Tax - 2016 (1) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2016 (1) TMI 1106 - AT - Income TaxPermanent Establishment(PE) in India - whether assessee only having activities that are proprietary or auxiliary in nature - Held that:- We have observed from the findings of the ld. CIT(A) that the assessee has been involved in supplying the literature relating to marketing and sales without any participation in actual sales activity. The Israeli company is selling the products to the distributors as per the requirements directly from Israel, and also makes efforts to services and maintain products used within the territory, which are sold directly by the Israeli company. The Israeli company further sells to the distributors within the territory not being the assessee and that these distributors further resale the products to ultimate customers independently. The Liaison office only provides certain servicing of the equipments to the distributors for which the expenses are reimbursed by the Israeli company. The Liaison office in India is merely in the nature to facilitate the contract between the distributors and the Israeli company. The distribution contract, per se at page _____ of the paper book, do not result into any generation of income and, therefore, the activities of the assessee have to be definitely considered to be proprietary and auxiliary in nature. The ld. AR has brought to our notice RBI approval, at page 10 of the paper book, which has been received by the assessee, for the purposes of undertaking liaison activities and to act as a communication channel between the parties in India and the Israeli company. In view of the foregoing discussion, we conclude that the assessee does amount to a PE in India, and are of the considered opinion that the assessee is a liaison office and are providing services which are proprietary or auxiliary in nature. We, therefore, do not find any infirmity with the findings of the ld. CIT(A). See UAE Exchange Centre [2009 (2) TMI 56 - DELHI HIGH COURT ] - Decided in favour of assessee.
|