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2019 (4) TMI 1474 - AT - Income TaxPermanent Establishment (PE) in India - taxability of fee for legal consultancy services in India - amount received by the assessee from the clients in India is not in the nature of either royalty or fees for technical services has been accepted by the AO - whether the employees/other personnel of the assessee have stayed and rendered services in India during the financial year exceeding the period of 90 days to constitute a PE in India. - Counting of vacation period of one of the employees - multiple counting of employees in a single day - India–UK DTTA - HELD THAT:- Thus, from the aforesaid facts and materials available on record, the authenticity of which has not been disputed, it is proved that Shri Narayan Iyar, has not rendered any services in India from 17th April 2001 to 4th May 2001, as he was availing study leave. Therefore, the period beginning from 17th April 2001 to 4th May 2001, have to be excluded for computing the period of 90 days as no other employee of the assessee was rendering services in India. Whether multiple counting of employees on a single day is permissible - India–UK Tax Treaty - HELD THAT:- multiple counting of employee in a single day, as was done by the Departmental Authorities, is impermissible under Article–5(2)(k)(i) of India–UK Tax Treaty. The aforesaid view has been expressed by the Tribunal in case of Clifford Chance [2001 (9) TMI 1141 - ITAT MUMBAI] . In fact, in the remand report dated 27th February 2006, a copy of which is at Page–110 of the paper book, the Assessing Officer has accepted the aforesaid legal position in Para–9. Thus, if the period during which Shri Narayan Iyar was on leave is excluded and the multiple counting of employees in a single day is avoided, the aggregate period of stay of assessee’s employees in India during the period from 1st April 2001 to 31st March 2002, is 87 days as per the statement placed. Therefore, there was no PE of the assessee in India during the impugned assessment year. That being the case, the fees received by the assessee from legal consultancy services rendered in India is not taxable in India. The addition made, therefore, deserves to be deleted. This ground is allowed.
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