https://www.taxtmi.com/caselaws?id=769558 ITAT Delhi ruled in favor of a foreign company seeking to set off PE losses against FTS income earned in India. The assessee had two income streams - one through PE operations (Article 7 DTAA) and another through direct FTS services (Article 12 DTAA). The AO accepted PE losses were genuine and FTS income was earned directly without PE assistance. The tribunal held that both income streams constitute business income sourced from India, making Section 71 set-off provisions applicable. While Section 115A(3) restricts expenditure deductions for FTS income, it doesn't prohibit loss set-offs. Following precedent, where treaty provisions are silent on beneficial provisions like set-offs, domestic law applies. en-us Wed, 23 Apr 2025 00:00:00 +0530 Mon, 28 Apr 2025 08:35:07 +0530 TaxTMI RSS Generator https://www.taxtmi.com/caselaws?id=769558 ITAT Delhi ruled in favor of a foreign company seeking to set off PE losses against FTS income earned in India. The assessee had two income streams - one through PE operations (Article 7 DTAA) and another through direct FTS services (Article 12 DTAA). The AO accepted PE losses were genuine and FTS income was earned directly without PE assistance. The tribunal held that both income streams constitute business income sourced from India, making Section 71 set-off provisions applicable. While Section 115A(3) restricts expenditure deductions for FTS income, it doesn't prohibit loss set-offs. Following precedent, where treaty provisions are silent on beneficial provisions like set-offs, domestic law applies. Case-Laws Income Tax Wed, 23 Apr 2025 00:00:00 +0530 https://www.taxtmi.com/caselaws?id=769558