Delhi ITAT rules on constitution of PE in case of outsourcing of services to an Indian affiliate and on attribution of profits to such a PE

Court: Delhi Income Tax Appellate Tribunal Citation: eFunds Corporation and eFunds IT Solutions Inc. Brief :The ITAT held that the relationship of the Taxpayers with their Indian subsidiary to whom the Taxpayers had sub contracted/assigned provision of software development and call center services, resulted in a permanent establishment (PE) of the Taxpayers in India under the India-USA Double Taxation Avoidance Agreement (DTAA). The ITAT held that a PE was constituted on account of activities of the subsidiary which effectively resulted in the Taxpayers carrying on their business in India. Th...