Service PE threshold under India-USA DTAA turns on unique solar days, not cumulative man-days, so no PE arose.

For determining the service PE threshold under Article 5(2)(l) of the India-USA DTAA, the relevant period is computed on the basis of unique solar days of service presence in India, not by aggregating overlapping man-days for individual employees. Applying jurisdictional precedent, the Tribunal held that the focus is on the continuation of service activity in India within the treaty period. On the facts, the employees were present for only 72 unique solar days, below the 90-day threshold, so no service PE arose in India and the addition was deleted.

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Issues: Whether, for determining the period of furnishing services under Article 5(2)(l) of the India-USA DTAA, the presence of employees in India is to be computed on the basis of unique solar days or cumulative man-days.

Analysis: The dispute turned on the interpretation of the service PE threshold under Article 5(2)(l), which requires that the relevant activities continue in India for periods aggregating more than 90 days within a twelve-month period. The Tribunal followed the jurisdictional precedent that the focus is on the continuation of the service activity in India and not on aggregating overlapping days multiple times for different employees. On the facts, the employees of the assessee were present in India only for 72 unique solar days, which was below the treaty threshold. In the absence of any contrary precedent or distinguishing facts, the Tribunal found no infirmity in the order deleting the addition.

Conclusion: Unique solar days, and not cumulative man-days, are to be considered. The assessee did not constitute a service PE in India, and the addition was rightly deleted.

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