Taxability of business done by NRI through Power of Attorney holder

Power of attorney holder of a non-resident can constitute a dependent agent: ITAT

1. In this case, the ld. AR made a plea that the assessee has executed the project of NHPC at Tanakpur between 27.01.2008 to 05.03.2008, so that the number of days is only 40 days. Hence, as per provisions, time may be containing in Article 5.2(j) of the DTAA between India and Swiss. According to the ld. AR, the assessee cannot be said to have any PE in India, since the project activity is less than six months. In our opinion, the above contention of the assessee’s counsel has no merit. In the present case, the business of the assessee has been conducted from the address of project coordinator, Mr. V. Subramanian and all correspondences relating to prospecting of client, participation in bids, correspondence with customers, signing of contract document, execution of the project and closure of the project etc. were initiated or routed through the business address of the company as above. Mr. V. Subramanian is the Power of Attorney holder from the company for all the projects, as the assessee was non-resident. He represented the non-resident assessee at site and he signed all the documents on behalf of non-resident assessee. Further, it is to be noted that ~

(i) the claim of the assessee that no PE existed in view of Article 5.2(j) of the DTAA was only a subterfuge on the face of such facts;

(ii) the “fixed place test” is a positive one for the assessee and there was no requirement to go for special inclusion for the purpose of determination of PE;

Please become a Premium member. If you are already a Premium member, login here to access the full content.