ITAT on Meaning of expression ’may be taxed’ used in India’s tax treaties

Tribunal held that use of the expression ’may be taxed’ in the second sentence of Article 7 on business profits would permit both the state, in which the permanent establishment (PE) is situated (Source State or PE State), as well as the Residence State of the enterprise, the right to tax the business profits attributable to the PE.

 INCOME TAX APPELLATE TRIBUNAL, DELHI

ITA Nos.1293 & 1294/Del./2009 – (ASSESSMENT YEARS : 2000-01 & 2005-06)

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