Case Law Details
Liaison Office (LO) involved merely in purchasing activity is not a Permanent Establishment (PE) ADIT (IT) Vs Fabrikant & Sons Ltd. (Appeal Nos. 4657 to 4660 and 3342) dated 28 January 2011
The facts and the issues were same for the relevant assessment years i.e.1999-2000 to 2002-03 and 2003-04. A tax survey was carried out in the financial year 2005-06 in the premises of the assessee. The following findings were recorded:
• M Fabrikant and Sons Inc (F&S Inc) was a company based in USA and engaged in the business of sale of loose diamonds and diamond jewellery.
• The India LO of the tax payer was set up in 1980 for purchase of finished loose diamonds from the Indian market.
• The constituted Attorney of F&S Inc received the requirement details from the principals in USA with reference to size, quality of diamonds, carats and price. The price quoted was only indicative and not the final price at which the principals desired to buy and LO was required to negotiate the price with the suppliers.
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