Permanent establishment under India-Mauritius DTAA not established where agent remained independent and no fixed place was at disposal.

Under Article 5 of the India-Mauritius DTAA, FCIPL was not established as a dependent agent permanent establishment because it did not work exclusively or almost exclusively for the assessee and carried on business for other principals as well. The facts also did not show that the assessee had any place in India at its disposal through FCIPL, so the requirements for a fixed place permanent establishment were not met. On that basis, the treaty did not permit Indian taxation of the assessee's shipping business profits on the Revenue's asserted PE footing.

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Issues: Whether the assessee had a dependent agent permanent establishment or a fixed place permanent establishment in India through FCIPL so as to permit taxation of its shipping income in India.

Analysis: The appeal was examined in the light of the earlier orders in the assessee's own case and the settled treaty position under Article 5 of the India-Mauritius DTAA. On the facts found, FCIPL was not shown to work exclusively or almost exclusively for the assessee; it carried on business for other principals as well and therefore retained the character of an agent of independent status. The material also did not establish that the assessee had any place in India at its disposal through which it carried on business, so the conditions for a fixed place permanent establishment were not satisfied. In these circumstances, the treaty provisions governing permanent establishment did not support Indian taxation of the business profits on the basis adopted by the Revenue.

Conclusion: FCIPL did not constitute either a dependent agent permanent establishment or a fixed place permanent establishment of the assessee in India, and the Revenue's challenge failed.

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