https://www.taxtmi.com/caselaws?id=197114 A foreign enterprise is not taxable in India on business profits unless it is shown to have a permanent establishment or business connection, and the Revenue must also establish a direct economic nexus between the receipts and that permanent establishment. Applying the assessee's earlier year position, the ITAT noted that Indian subsidiaries merely provided support and did not carry on the foreign enterprise's business activities, so no permanent establishment was created. It further held that royalty, fees for technical services and interest were not attributable to any permanent establishment, making gross-basis taxation under the domestic provisions inappropriate and preserving the treaty rate. en-us Wed, 06 Apr 2011 00:00:00 +0530 Wed, 27 Dec 2017 18:01:19 +0530 TaxTMI RSS Generator https://www.taxtmi.com/caselaws?id=197114 A foreign enterprise is not taxable in India on business profits unless it is shown to have a permanent establishment or business connection, and the Revenue must also establish a direct economic nexus between the receipts and that permanent establishment. Applying the assessee's earlier year position, the ITAT noted that Indian subsidiaries merely provided support and did not carry on the foreign enterprise's business activities, so no permanent establishment was created. It further held that royalty, fees for technical services and interest were not attributable to any permanent establishment, making gross-basis taxation under the domestic provisions inappropriate and preserving the treaty rate. Case-Laws Income Tax Wed, 06 Apr 2011 00:00:00 +0530 https://www.taxtmi.com/caselaws?id=197114