https://www.taxtmi.com/caselaws?id=32794 Receipts under a basic engineering and procurement agreement were treated as royalty because they involved development and transfer of technical plans and design, together with technical and consultancy services; a permanent establishment in India did not displace royalty taxation unless the services were themselves effectively connected with that establishment, which was not shown. By contrast, project management services were partly performed through the Mumbai establishment and had a functional link to it, so they were effectively connected with the permanent establishment and taxable as business profits only to the extent attributable to Indian operations. The ruling applies Article XII(4) only where the royalty-generating services themselves are connected with the permanent establishment, and tests each separable agreement on its own facts. en-us Mon, 30 Mar 2009 00:00:00 +0530 Mon, 03 May 2010 00:34:00 +0530 TaxTMI RSS Generator https://www.taxtmi.com/caselaws?id=32794 Receipts under a basic engineering and procurement agreement were treated as royalty because they involved development and transfer of technical plans and design, together with technical and consultancy services; a permanent establishment in India did not displace royalty taxation unless the services were themselves effectively connected with that establishment, which was not shown. By contrast, project management services were partly performed through the Mumbai establishment and had a functional link to it, so they were effectively connected with the permanent establishment and taxable as business profits only to the extent attributable to Indian operations. The ruling applies Article XII(4) only where the royalty-generating services themselves are connected with the permanent establishment, and tests each separable agreement on its own facts. Case-Laws Income Tax Mon, 30 Mar 2009 00:00:00 +0530 https://www.taxtmi.com/caselaws?id=32794