No PE in India for Irish Aircraft Lessor – Lease Rentals Taxable Only in Ireland under DTAA

Sky High Appeal XLIII Leasing Company Limited Vs ACIT (ITAT Mumbai) Background: The case before the Income Tax Appellate Tribunal (ITAT) Mumbai concerned the taxability of aircraft lease rentals received by Sky High Appeal XLIII Leasing Company Limited, an Irish enterprise, from IndiGo Airlines. The primary issue was whether the leased aircraft gave rise to a Permanent Establishment (PE) of the lessor in India under Article 5 of the India–Ireland Double Taxation Avoidance Agreement (DTAA). If a PE existed, the lease rentals could be taxed in India under Article 7 of the DTAA. Alternatively,...