Specific treaty PE rule for mineral oil services prevailed over the general PE test; no Indian permanent establishment found.

Services or facilities connected with mineral oil exploration were treated as governed by the treaty's specific deeming rule in Article 5(5), not the general fixed-place permanent establishment rule in Article 5(1). Because the assessee's operations in the relevant fiscal year lasted only 93 days, they did not meet the 183-day threshold required under the special provision. The special clause was applied as the controlling rule for this category of activity, and the general permanent establishment provision could not be used to override its embedded duration condition. On that basis, no permanent establishment was found in India and the tax addition was deleted.

---

---

Issues: Whether services or facilities provided in connection with exploration, exploitation or extraction of mineral oils fell within the specific permanent establishment rule under Article 5(5) so that the general permanent establishment rule under Article 5(1) could not be invoked.

Analysis: The assessee's operations were carried on for 93 days in the relevant fiscal year, which was below the 183-day threshold prescribed for the specific deeming rule applicable to services or facilities connected with mineral oil exploration. The specific clause dealing with such activities was treated as a special provision that governs the field for this category of business, and the general fixed-place permanent establishment rule could not be used to defeat the threshold embedded in the specific clause.

Conclusion: The assessee did not have a permanent establishment in India under Article 5(5), and the addition based on the contrary view was deleted.

Final Conclusion: The assessment of Indian taxability based on a permanent establishment was set aside, and the assessee's appeal succeeded.

Ratio Decidendi: Where a treaty contains a specific deeming provision for a class of activities and prescribes a minimum-duration threshold, that specific rule prevails over the general permanent establishment rule for those activities.

---