Scheme of taxation of royalties or fees for technical services received by a tax resident of Germany having its PE in India

Any amount received by a non-resident in pursuance of an agreement made before 1-4-2003 is to be governed by the provisions of section 44D of the Income-tax Act; the words `according to the domestic law of the contracting State in which the PE is situated’ appearing in Article 7(3) of DTAA between India and Germany are the words of significance which, would only mean that the expenditures incurred by the non-resident assessee for the purpose of business of the PE in India would be allowable in accordance with the provisions of domestic law i.e., Income-tax Act, 1961; consequently, no ded...