Permanent establishment test: lack of fixed place or dependent agent PE defeats profit attribution in India.

The article notes that the ITAT Delhi reiterated, in the assessee's own prior years' case, that the Revenue had not proved a fixed place PE or dependent agent PE in India. It relied on unchanged facts, including direct sales from Singapore, no visits by the assessee's employees to India, and agreements that did not authorise the Indian entity to conclude contracts on the assessee's behalf. On that footing, the analysis states that business profits could not be taxed in India in the absence of a PE, and attribution of profits to the alleged PE was unsustainable.

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Issues: Whether the assessee had a permanent establishment in India and, if not, whether the profit attribution made by the Revenue could survive.

Analysis: The Tribunal followed its earlier decision in the assessee's own case for prior assessment years, noting that the material facts and legal position remained unchanged. It reiterated that the Revenue had not discharged the burden of proving the existence of a fixed place PE or a dependent agent PE in India. The record showed direct sales from Singapore, no visit by the assessee's employees to India, and agreements that did not confer authority on the Indian entity to conclude contracts on the assessee's behalf. In the absence of a PE, business profits could not be taxed in India, and the attribution of profits to the alleged PE was unsustainable.

Conclusion: The assessee did not have a PE in India, and the additions made on account of profit attribution were deleted.

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