INCOME TAX ACT, 1961

Section 90 Article 5

Double Taxation Avoidance Agreement-between India and Japan - Double taxation relief under Article 5 of DTAA - -

Assessee-company was incorporated in Japan. It was involved in trading from needle to airplane engines and it also undertook several projects in connection with big industrial installations power projects. AO alleged that income from offshore supplies in respect of its Indian projects were liable to be taxed in India under the provisions of article 7 read with paragraph 6 of the Indo-Japan DTAA Protocol. AO computed taxable profits attributable to Indian operation at 50%. In appeal, CIT(A) upheld view of AO that assessee's Indian AE (MIPL) constituted as Dependent Agency Permanent Establishment (DAPE) of the assessee company in India. CIT(A) restricted profit attributable to the Indian operation to 20%. Held: So far as order of CIT(A) in holding that MIPL constituted as DAPE of assessee company in India, issue stood squarely covered in favour of assessee by the decision of the Tribunal in assessee's own case for assessment year 2005-06, wherein it was held that MIPL was not a dependent agency PE of assessee. Following consistent decisions of the Tribunal in assessee's own case for the preceding assessment years and in absence of any contrary material, it was held that no further profit could be attributed since assessee was not a Dependent Agency Permanent Establishment.

REFERRED :

FAVOUR : In assessee's favour.

A.Y. : 2010-11

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