Permanent establishment under India-UAE DTAA denied where project office was auxiliary and installation project missed the duration test.

A project office used only as a communication channel and performing preparatory or auxiliary functions does not create a permanent establishment under the India-UAE DTAA. The installation and assembly project also failed the nine-month duration test, and the alleged dependent agent was treated as an independent agent that did not habitually conclude contracts on behalf of the assessee. On that basis, no permanent establishment existed in India, and once no permanent establishment was found, no income could be attributed to India. The Tribunal followed binding High Court precedent and did not depart from that view.

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Issues: Whether the assessee's project office constituted a permanent establishment in India under the India-UAE DTAA, whether the project activities were preparatory or auxiliary or satisfied the installation project duration test, whether the alleged dependent agent constituted a dependent agent permanent establishment, and whether any income could be attributed to a permanent establishment in India.

Analysis: The order follows the binding decision of the High Court, which held that the project office was used only as a communication channel and its activities fell within the exclusion for preparatory or auxiliary functions. It further held that the installation and assembly project did not satisfy the nine-month threshold, and that the alleged agent was an independent agent who did not habitually conclude contracts on behalf of the assessee. On that basis, no permanent establishment existed in India. The High Court also held that, once no permanent establishment existed, no income could be attributed to one. The Tribunal recorded that no distinguishing decision was brought to its notice and therefore declined to depart from the High Court's view.

Conclusion: The assessee did not have a permanent establishment in India, the attribution issue did not survive, and the revenue's appeal was not accepted.

Final Conclusion: The appeal was dismissed following the binding precedent, with the assessee succeeding on the permanent establishment and attribution issues.

Ratio Decidendi: A fixed place or project office used only for auxiliary support functions does not constitute a permanent establishment, and where no permanent establishment exists, no profits can be attributed to India.

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