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2009 (6) TMI 24 - AAR - Income TaxPermanent Establishment – P/E – Nature of Income – Business Profit - M/s Cable and Wireless UK (C &W UK) is providing end to end international long distance telecommunication services to its Indian customers. Whereas the applicant will carry the calls and data within the country, C&W UK will further carry those calls and data to the recipients outside India. The network and equipments of C&W UK will not be used in India and the applicant’s network and equipments will not be used outside India. Thus in telecom parlance, domestic half circuit will be provided by the applicant and international half circuit will be provided by C&W UK. In respect of the aforesaid services rendered by C&W UK, the applicant will pay fees to the former. – Held that the payments made by the applicant to C&W UK are in the nature of business profits. In the absence of there being any permanent establishment of C&W UK in India, this income is not at all taxable here. Since this income is not chargeable to tax under the Act, there is no question of making any deduction at source u/s 195.
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