TMI Blog2018 (1) TMI 1043X X X X Extracts X X X X X X X X Extracts X X X X ..... essee that there is no PE for it in India, in which case, the impugned receipt is not taxable in India. Accordingly, we set aside the orders passed by the tax authorities and direct the AO to delete the addition made by him. - Decided in favour of assessee - I.T.A. No. 4063/Mum/2015 - - - Dated:- 19-1-2018 - S/Shri B.R. Baskaran (AM) Sandeep Gosain (JM) For the Assessee : Shri Danesh Bafna Ms. Chandni Shah For the Department : Shri M.V. Rajguru ORDER Per B.R. Baskaran (AM) :- The appeal filed by the assessee is directed against the order dated 24.3.2015 passed by the learned CIT(A)-55, Mumbai and it relates to A.Y. 2011-12. The assessee is aggrieved by the decision of the learned CIT(A) in upholding the assess ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... companies are taxable as business profit under Article 7 of Tax agreement of India and respective countries. The group of companies which obtained AAR ruling included M/s. Booz Company (ME). The Assessing Officer noticed that the assessee herein is 100% subsidiary of Booz Company (ME) Ltd., Hence the AO, by following the decision of AAR, held that Booz India (Indian AE) to whom services were provided is the PE of the assessee. Accordingly the AO held that the income of ₹ 112.83 lakhs is taxable as business income of the assessee. The assessee had claimed expenses to the tune of ₹ 62.61 lakhs. Since the assessee did not furnish supporting documents, the Assessing Officer restricted deduction for expenses to the tune of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y the tax authorities as the basis for determining the existence or otherwise of PE of the assessee herein. 6. The Ld A.R submitted that the assessee has provided certain technical/professional personnel to M/s Booz India. Referring to the agreement entered between the assessee and M/s Booz India, the Ld A.R submitted that the said personnel were provided on Principal to Principal basis and further they shall not be entitled to work for any other projects. The agreement further clearly provides that no specific part of the office premises of Booz India or the premises of the client of Booz India is at the specific disposal of the technical/professional personnel of the assessee. Further Booz India is not under an obligation to earmark ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... able in India only if the assessee has PE in India. We have earlier noticed that the tax authorities have held that there is PE in India only on the basis of ruling given by AAR. In the earlier paragraph, we have held that the ruling given by AAR should not have been followed by the tax authorities for the reasons furnished by the Ld A.R. 10. The term Permanent Establishment is defined in Article 5 of the tax treaty. As per Article 5(2)(i), the PE includes the furnishing of services including consultancy services by an enterprise of a Contracting State through employees or other personnel in the other Contracting State, provided that such activities continue for the same project or connected project for a period or periods aggrega ..... X X X X Extracts X X X X X X X X Extracts X X X X
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