Research activities of branch office can lead to a ‘permanent establishment’ if not characterized as preparatory or auxiliary in nature

Facts A US based company (assessee), engaged in the business of developing and selling hybrid plant seeds around the world had a liaison office in India. The liaison office was converted into a branch office to undertake the two following activities: conduct agri-genetic research for the development of new products; Production of parent seeds and its sales to the joint venture company under an arrangement. The agricultural research conducted by the research unit in India results in development of parent breeder / foundation seeds in small quantities and these breeder / foundation seeds are u...