Dependent agent PE under India-Mauritius DTAA not established where Indian shipping agent remained functionally independent.

The India-Mauritius DTAA dependent agent PE threshold was not met because the Indian shipping agent was not shown to be wholly or almost wholly devoted to the non-resident assessee, and the record did not establish authority to conclude contracts on the assessee's behalf. Its shipping-agency work for multiple principals, with substantial revenue from third parties and other shipping lines, indicated functional independence. Ordinary cargo booking, freight collection and similar agency functions were insufficient, by themselves, to create a dependent agent permanent establishment. The finding of no PE was therefore upheld and the Revenue's challenge failed.

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Issues: Whether Freight Connection India P. Ltd. constituted a dependent agent permanent establishment of the non-resident assessee in India under the India-Mauritius DTAA.

Analysis: The agency arrangement and the surrounding facts showed that the Indian agent carried on shipping-agency functions for multiple principals and derived a substantial portion of its revenue from third parties and other shipping lines. The material on record did not establish that it was wholly or almost wholly devoted to the assessee, nor that it had authority to conclude contracts on the assessee's behalf in the sense required for a dependent agent permanent establishment. Mere cargo booking, collection of freight, and other agency functions in the ordinary course of business were insufficient to satisfy the treaty threshold for a dependent agent PE.

Conclusion: FCIPL was not a dependent agent permanent establishment of the assessee in India, and the finding of no PE was upheld.

Final Conclusion: The Revenue's challenge failed because the Indian agent was found to be functionally independent and not covered by the dependent agent PE provisions.

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