Home Case Index All Cases Income Tax Income Tax + AT Income Tax - 2019 (7) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2019 (7) TMI 859 - AT - Income TaxIncome accrued in India - PE in India so as to attribute certain income which is taxable in India - India-USA DTAA - business of diamond grading and preparation of diamond dossiers - taxability of ‘Instructor Fee’ earned from ‘GIA India Lab’, subsidiary company - HELD THAT:- Considering the functions and the risks assumed by GIA India Lab visà- vis its business activities in India (as has been recorded in the transfer pricing study report - which functional and risk analysis has been accepted by the TPO both in the case of GIA India Lab and in the case of the assessee company), GIA India Lab is an independent entity which is rendering grading services to its clients in India. GIA India Lab also bears service risk and all client facing risks vis-à-vis the stones sent to the assessee company for grading purposes (as has been recorded in the Transfer Pricing Study Report). Hence, GIA India Lab is not acting in India on behalf of the assessee company. Further, GIA India Lab is not having any authority to conclude contracts and has neither concluded any contracts on behalf of the assessee company nor has it secured any orders for the assessee company in India. Thus, GIA India Lab cannot be regarded as ‘agency PE’ of the assessee company in India. In view of the aforesaid discussion AO has erred in invoking section 9 of the Act and/or Article 5 of the India-USA DTAA in order to say that the assessee company has a PE in India. Thus, assessee succeeds on this issue.
|