Case Law Details
CASE LAWS DETAILS
DECIDED BY: ITAT, MUMBAI `L’, BENCH, MUMBAI,
IN THE CASE OF: J. Roy Mc Dermott Eastern Hemisphere Ltd. Vs JCIT, APPEAL NO: ITA No. 8084/Mum/04, DECIDED ON – March 22, 2010
RELEVANT PARAGRAPH
8. We find that there is no dispute about applicability of India Mauritius tax treaty on the facts of the present case, as also about the fundamental position that the provisions of the said treaty being beneficial to the assessee, the same will override the provisions of the Indian Income Tax Act. It is also not in dispute that the profits earned by the assessee from these contracts are business profits in nature and can only be brought to tax in India in the event of Mauritian company having been held to have a permanent establishment (PE) in India. The question that we must, therefore, address ourselves to is whether or not, on the facts and in the circumstances of the case, the assessee can be said to have a PE in India. Article 5 (2)(i) of the Indo Mauritius tax treaty, which is broadly the same as Article 5(3)(a) of UN Model Convention – except mainly for replacement of ‘six months’ duration test by ‘nine months’ duration test, and for including it in paragraph 5(2), which is generally required to be read along-with paragraph 5(1), as against paragraph 5(3) in the UN Model Convention which is more of an agreed extension of PE definition rather than being illustrative in nature. The relevant extracts from Article 5 of India Mauritius tax treaty are as follows:-
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