Permanent establishment under the India-Singapore tax treaty was not proved where the Indian entity lacked contract authority and operated independently.

Under Article 5 of the India-Singapore DTAA, the Indian entity's premises could not be treated as the assessee's fixed place of business because it functioned as a non-exclusive distributor and service provider, and the marketing support arrangement characterised it as an independent contractor without authority to conclude contracts. A dependent agent PE was also not established because direct sales were made from Singapore and no employees visited India. The Revenue's reliance on third-party statements was undermined because they were not confronted to the assessee and no cross-examination was provided. The Revenue therefore failed to discharge the burden of proving a PE in India.

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Issues: Whether the assessee had a Permanent Establishment in India, either as a fixed place PE or as a dependent agent PE, under Article 5 of the India-Singapore DTAA.

Analysis: The Revenue's conclusion rested mainly on clauses in the agreements with the Indian entity and statements of two employees of an Indian customer. The agreements showed that the Indian entity was appointed as a non-exclusive distributor and service provider, with no authority to conclude contracts on behalf of the assessee, while the marketing support arrangement also described it as an independent contractor without contractual authority. The direct sales to Indian customers were made from Singapore, and the assessee had no employees visiting India. The statements relied upon by the Assessing Officer were not confronted to the assessee and no cross-examination was afforded. On these facts, the premises of the Indian entity could not be treated as the assessee's fixed place of business, and the conditions for a dependent agent PE were also not met. The burden to prove existence of PE remained on the Revenue and was not discharged.

Conclusion: The assessee did not have a Permanent Establishment in India.

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