Specific construction-site PE test under the India-UAE DTAA controls over the general fixed-place rule when treaty thresholds are unmet

The India-UAE DTAA was read so that the specific construction-site rule in Article 5(2)(h) prevailed over the general fixed-place rule in Article 5(1). The Tribunal treated the assessee's grouting activities as falling within that specific clause, which applies only where the site, project or activity continues for more than nine months. Because that duration threshold was not met, no permanent establishment arose in India. The Revenue could not expand the treaty by adding concepts not found in its text, such as a separate equipment PE or a broader aggregation approach.

---

---

Issues: Whether the assessee had a permanent establishment in India under Article 5 of the India-UAE DTAA on account of its grouting activities, and whether the specific construction-site clause in Article 5(2)(h) displaced the general fixed-place rule in Article 5(1).

Analysis: The assessee's activities were held to fall within the specific construction-related clause of Article 5(2)(h), which applies where the site, project or activity continues for more than nine months. The Tribunal held that the DTAA must be interpreted as written, that a general provision cannot override a specific provision, and that the Revenue could not rewrite the treaty by introducing concepts not found in it, such as a separate equipment PE or a broader aggregation approach. Since the duration threshold under the specific clause was not met, the general definition in Article 5(1) was not to be invoked.

Conclusion: No permanent establishment existed in India for the year under consideration, and the assessee succeeded on the principal issue.

---