Permanent establishment under India-UAE DTAA: identical facts kept profits attribution to an alleged PE outside Indian tax net.

Under Article 5 of the India-UAE DTAA, the Tribunal reiterated that no permanent establishment existed in India on identical facts already decided in the assessee's favour for earlier years, with that view affirmed by the High Court. On that basis, attribution of profits to the alleged permanent establishment, including from offshore supply and onshore service segments, could not be sustained. The appellate relief in favour of the assessee was therefore maintained, and the Revenue's appeal was dismissed.

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Issues: (i) Whether the assessee had a permanent establishment in India under Article 5 of the India-UAE DTAA; and (ii) whether the profits attributed to the alleged permanent establishment were taxable in India.

Issue (i): Whether the assessee had a permanent establishment in India under Article 5 of the India-UAE DTAA.

Analysis: The issue was covered by the assessee's own earlier years, where the Tribunal held that no permanent establishment existed in India during the relevant period and that view had been affirmed by the High Court. The present year involved identical facts and the same legal controversy.

Conclusion: The existence of a permanent establishment in India was held against the Revenue and in favour of the assessee.

Issue (ii): Whether the profits attributed to the alleged permanent establishment were taxable in India.

Analysis: Once the question of permanent establishment stood concluded in favour of the assessee on identical facts, the attribution made by the Assessing Officer on offshore supply and onshore service segments could not be sustained. The appellate authority had already granted relief following the binding decisions in the assessee's own case for earlier assessment years.

Conclusion: The attributed profits were held not taxable in India and the issue was decided in favour of the assessee.

Final Conclusion: The appellate authority's order granting relief to the assessee was sustained and the Revenue's appeal was dismissed.

Ratio Decidendi: Where the relevant facts and legal controversy are identical to earlier assessment years and the assessee's own case has already been against the Revenue, the same view governs the subsequent year and the attribution of income based on an alleged permanent establishment cannot survive.

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