TaxTMI 
TaxTMI 
2022 (8) TMI 1533
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....ssment year 2005-06 and challenged additions made by the Assessing Officer towards 40(a)(i) disallowance. The assessee had also raised common grounds for all assessment years and challenged deletion of certain additions made by the Assessing Officer. Since, multiple issues need to be decided, we deem it appropriate not to reproduce grounds of appeal filed by the assessee as well as Revenue. 3. The brief facts of the case are that the appellate is a domestic company engaged in the business of general insurance filed its return of income for relevant assessment years u/s. 139(1) of the Income Tax Act, 1961 (herein after referred as "the Act"). The assessee is a general insurance company registered with Insurance Regulatory Development & Authority of India (IRDA) as per section 3(2a) of Insurance Act, 1938. The assessee being in the business of General Insurance in India as part of its business strategy had entered into reinsurance contract with non-resident insurance companies (NRRI). For the impugned assessment years, the assessee has ceded reinsurance premium to non-resident reinsurance companies situated in United Kingdom, Switzerland, France, Denmark, Germany and Singapore. Th....
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....t the income shall be deemed to accrue or arise in India, whether directly or indirectly, if they are ✓ from any business connection in India or ✓ Through or from any assets or source of income in India or ✓ through the transfer of a capital asset situate in India Thus, the income of a non-resident is taxable in India if the income accrues, arises or received in India or if it is deemed to accrue, arise or received in India. In case of deemed accrual or arisen of business income, such part of the income that is attributable to the operations carried out in India would be taxable. Hence, the assessee has been show caused why the reinsurance ceded to the Nonresident Insurers cannot be disallowed as per the provisions of section 40(a)(i) of the income tax act. In response to which, the assessee has replied as under, "Section 195 is invoked only if the amount payable is subject to tax under the Indian Income Tax Act 1961. Reinsurance payment made to foreign reinsurers is not subject to tax in India due to the following: No Permanent Establishment Status: As per the Double Taxation Treaty agreem....
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.... the customer will claim against the insurance company and has no recourse against the reinsurer directly. Only the insurance company, by virtue of its reinsurance contract can claim against the reinsurance company. Thus it must be emphasized before the authorities that these are not back to back arrangements and reinsurance is at the discretion of the insurance company. Hence, the question of the insurance company being treated as an agent of the reinsurer cannot arise". The above reply furnished by the assessee has been carefully considered. In the case of the Reinsurance income of the Non Resident, in the light of the legal position as per the income tax act, the issue of when and where the income accrues or arises is discussed as under: Time of accrual: The reinsurance transaction between the Indian Insurer (II) and the non-resident Reinsurer (NR) is governed by a contract, usually called a 'Cover Note'. As per the terms of the contract, the NR becomes entitled to receive a part of the original insurance premium due to the Insurer, the 'cedant' by way of reinsurance premium. The contract provides that the liability to pay the ....
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....deduct tax at source at the specified rates. Sub-section (2) of Sec. 4, provides that in respect of income chargeable under sub-section (1), income-tax shall be deducted at source where it is so deductible under any provision of the Act. Section 195 of the I.T. Act deals with the deduction of tax in cases where payment is to be made to a non-resident which, inter alia, provides that: (a) Any person responsible for paying to a non-resident, any interest, or any sum chargeable under the provisions of this Act (other than interest on securities and salary) shall at the time of payment, deduct income-tax thereon at the rate in time. (b) Where the person responsible for paying any sum chargeable under the Act to a nonresident considers that the whole of such sum would not be chargeable in the case of the recipients, he may make an application to the Assessing Officer to determine 'the appropriate proportion of such sums so chargeable' upon such determination, tax shall be deducted under sub-section (1) only on that proportion of the sum which is so chargeable. (c) Sub-section (3) provides that any person entitled to receive any interest or other sum on....
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....feguarded under sections 195(2), 195(3) and 197. The only thing which is required to be done by them is to file an applicable for determination by the Assessing Officer that such sum would not be chargeable to tax in the case of the recipient, or for determination of the appropriate proportion of such sum so chargeable, or for grant of certificate authorizing the recipient to receive the amount without deduction of tax, or deduction of income tax at any lower rates or no deduction. On such determination, tax at the appropriate rate could be deducted at the source. If so such application is filed, income-tax on such sum is to be deducted and it is the statutory obligation of the person responsible for paying such 'sum' to deduct tax thereon before making payment. He has to discharge the obligation of tax deducted at source'. Following the provisions of sec. 195, production of a no objection certificate from Income tax Authorities was required by the Reserve Bank of India for making remittance to a nonresident. As the volume of remittances out of India increased, issuing NOC for every payment became cumbersome. Hence, an alternative solution to this requirement w....
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....tion or lesser deduction of tax, because the chargeability of sum paid is different from the taxability of the above sum. b. Further, as per the decision of Honourable Delhi Tribunal in the case of Van Oordac Jet India P Ltd., Vs ACIT reported in 112 ITD 79, has clearly stated that the assessee can not step into the shoes of the assessing Officer for the purpose of determining the chargeability on the non-resident payments. Hence, it is the obligation on the part of the assessee to deduct the tax at source as per the section 195 of the act & above cited decision of the Hon'ble Delhi Tribunal is squarely applicable in the instant case. c. It has been established in the earlier paragraphs discussed that the reinsurance premium ceded outside India to NRs by the assessee are chargeable to tax under sec. 195 of the act. The Apex Court of the country, in the case of Transmission Corporation of Andhra Pradesh Vs CIT (239 ITR 587) has held that a person making a payment to a nonresident is duty bound under section 195(2) to file an application to the Income-tax Authority, if the payment is not chargeable to tax or a smaller amount is chargeable to tax. If no such appl....
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....surance Brokers constitutes Agent PE of the Non-resident insurance company based on the following facts, It has been observed from the insurance business that, a) The main advantage of ceding the reinsurance premium through the insurance broker is that the Indian Insurance Broker are known for their skills, knowledge in the insurance business and they have the global network for the purpose of the reinsurance business which benefits the non-resident insurer. b) Since, the non-resident insurers do not having the technical knowledge in the local business (Indian business), the Indian Broker is being acting as an informal agent to help the nonresident to understand the business in India and to get confidence while underwriting. c) Normally, the Indian Insurer remits the entire reinsurance premium to the Indian Insurance Broker who in turn distributes to various nonresident re insurers. Further, as per the IRDA Regulations once the insurance premium is remitted to the Indian Broker, the liability of the Indian Insurer is considered to be discharged. The corresponding IRDA Notification dated 16.10.2002 is reproduced as under, "23. Segregation....
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....hat "where, however, there is a regular agency established in India for the purpose of purchase of entire raw materials required for manufacture and sale abroad and the agent chosen by reasons of his skill/representation and experience in the line of trade it can be said that there is a business connection in India". The above circular is squarely applicable in the instant case, since the reinsurance brokers are known for their skill, representation and experience in the line of reinsurance trade. Further, once the reinsurance premium is paid to the Indian insurance Broker, the liability of the Indian Insurer is discharged and during the course of claim, the proposal submitted by the Indian Broker are being examined by the technical expertise team with the Indian insurance broker and the same will be forwarded to the non-resident insurer and based on the above report of the Indian insurance Broker, the nonresident insurer will settle the claim to the Indian Insurer. Which means that the Indian insurance broker is being acting as an agent of the Non resident insurer. Hence, from the above facts, it is clear that the circular No: 23 of 1969 is squarely applicable in the inst....
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.... Before the CIT(A), the assessee has reiterated its arguments taken before the AO and submitted that reinsurance premium ceded to non-resident insurers (NRRI) cannot be disallowed u/s. 40(a)(i) of the Act for failure to deduct tax at source u/s. 195 of the Act, because the non-resident reinsurer are not permitted to carry out their business in India as per the provisions of Insurance Act, 1938 and rules made by the IRDAI there under and thus, when they are not permitted to carry out their business in India it cannot be held that non-resident reinsurer is having PE in India and consequently income of nonresident reinsurer is liable to tax in India. Since, income of NRRI is not liable to tax in India either under the Indian Income Tax Act, 1961 or under DTAA between India and respective contracting states, the question of withholding TDS on said payments u/s. 195 of the Act does not arise and consequently payments made to nonresident insurer towards reinsurance premium cannot be disallowed u/s. 40(a)(i) of the Act. 5. The CIT (A) after considering submissions of the assessee and also taken note of various facts held that profit from the reinsurance business of NRRI is nothing but ....
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.... and also filed a detailed written submissions on the issue in the light of certain judicial precedence, The relevant written submissions filed by the Sr. Standing Counsel for the Department are reproduced as under: "The background to the entire reinsurance transaction can be enumerated as follows; Re-insurance is an arrangement whereby an insurer (untied India Insurance Company Limited) having accepted a risk, transfers either fully or partially to another Company called Reinsurer, in order to reduce its own liability in the event of a loss or damage to the risk. Reinsurer has the same economic objective as insurance generally, i.e. the transfer and consequent elimination or reduction of risk by creation of a wider spread of exposure. Insurance of insured risk is called Reinsurance. The Insurer issues policies covering the risks of its clients (insured) in their own name and not in the name of the re-insurance companies. Re-insurance does not affect the relationship between the insured and the direct insurer, in particular the liability of the insurer (United India Insurance Company Limited) to indemnify the insured (Client of United India Insur....
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....e company on every quarter by stating the quantum of insurance premium is being ceded, quantum of claim receivable and quantum of commission receivable, etc. If there is no claim from the clients, at the end of the covering period the assessee shall be eligible for-profit commission as per the treaty which has been entered originally with the non-resident. 4. It is notable that, the Hon'ble Supreme Court in the case of Commissioner of Income Tax Punjab Vs R.D. Agarwal & Company & Another (56 ITR 20) has held that if there is an element of continuity between the business of non-resident and the activity in the taxable territories can be considered as a business connection which is otherwise the permanent establishment in India. In the instant case, the re-insurance transactions are regular and recurring. Hence it is clear that there is business connection between the Non-resident reinsurer and the assessee company. 5. It is essential to note that, the CBDT Circular No. 7 dated October 22, 2009 has withdrawn the earlier circulars issued with regard to the Nonresident taxation, viz. Circular No.23 dated July 23, 1969, Circular No. 163 dated May 29, 1975....
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....ctively received 85% of the catch in India, this being the first receipt in the eye of law and, hence, taxable in India. As long as the premium was apportioned and ceded to the nonresident the entire premium belonged to the Indian insurer and the non-resident reinsurer did not have any control over it. It was only after the ceding of the premium, the said income in it vests with the non-resident reinsurer and the NR had control over it. Therefore, the nonresident reinsurer effectively received the relevant percentage of the reinsurance premium in India. This being the first receipt in the eye of law and hence taxable in India. 4 The NR having received the charter fee in the form of 85% of the catch m India, its subsequent sale and realization outside India does not change the conclusion of its first receipt being in India. The non-resident reinsurer having received the reinsurance premium on a specific percentage as per the terms of the agreement made m India, its subsequent accounting does not change the conclusion of its first receipt being in India. 5 In the facts of the present case, the NR received the charter fee m India m the form of 85% of the catch after ....
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.... line of reinsurance trade. 10. Further, as per the IRDA notification dated 16.10.2002, once the reinsurance premium is paid to the Indian Insurance Broker, the liability of the Indian Insurer is discharged and during the course of claim, the proposal submitted by the Indian Broker and the same will be forwarded to the non-resident insurer and based on the above report of the Indian Insurance Broker, the non-resident insurer will settle the claim to the Indian Insurer, which means that the Indian Insurance broker is being acting as an agent of the Non-resident insurer. 11. Further, the reinsurance broker is the person who has signed the cover note of the insurance business cannot be simply brush aside with the reason that the same is for the purpose of receipt of commission because, the Insurance broker is being mainly involved in collection of the premium from the Indian Insurer and also have a major role in the settlement of the claim. Also, it can be considered that, the non-resident reinsurers are using the Indian Insurance brokers as a colorable device to circumvent / avoid their presence in India. 12. It is also essential to note that the reinsuranc....
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.... treaty slips with IRDAI in terms of para 3.5 of IRDAI (General insurance, Reinsurance) Regulation, 2000. As per IRDAI Regulation, 2000, the insurance companies in India have to mandatorily reinsure with the Indian reinsurer being General Insurance Corporation (GIC). However, over and above specified percentage of reinsurance, general insurance companies in India can have their reinsurance arrangement with foreign reinsurer in terms of para 3.7 of said regulations. In this case, there is no dispute with regard to fact that the assessee has complied with provisions of Insurance Act, 1938 and regulations made there under by the IRDAI. In fact, the Assessing Officer has accepted fact that the assessee has complied with reinsurance regulations by taking required percentage of reinsurance contract with General Insurance Corporation of India. But disputed reinsurance premium ceded to non-resident reinsurer companies. In the earlier round of litigation, the Tribunal had discussed the issue of payments made to nonresident reinsurer, in light of provisions of section Insurance Act, 1938 and IRDAI Regulations on reinsurance and concluded that the assessee has violated provisions of Insurance....
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....um paid by the assessee to NRRI is taxable in India in terms of section 5 read with section 9(1) of the Income Tax Act, 1961, and consequently, the assessee is liable to deduct TDS u/s. 195 of the Income Tax Act, 1961. As regards REINSURANCE PREMIUM ceded to NRRI where there is DTAA between India and other contracting States, the Assessing Officer was of the opinion that there is agency PE of NRRI in India, because of availing services of insurance brokers by the non-resident insurer companies in India. The Assessing Officer had also taken support from the decision of the Hon'ble Supreme Court in the case of Transmission Corporation of Andhra Pradesh Vs CIT (1999) 239 ITR 587 and observed that a person making payment to non-resident is duty bound under section 195(2) of the Income Tax Act, 1961 to file an application to the income-tax authority, if payment is not chargeable to tax or smaller amount is chargeable to tax. If no such application is filed, then tax has to be withheld on whole of such sum. The sum and substance of observations of the Assessing Officer is that income of NRRI is taxable in India and thus, the assessee is liable to deduct tax at source u/s. 195 of the ....
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....ting functions are carried on. Thus, in respect of sale, it is place where sale takes place, and in case of rendering service, place where service is rendered and in case of interest, where the money is lent etc. In this case, foreign reinsurers do not carry out their business functions in India, in fact, during the relevant assessment years they were statutorily prohibited from doing so. The reinsurance premium they receive is recompensated for risk there may be exposed in which event insurer makes a claim on them, in which event assets of the reinsurer that are situated outside India that were utilized to make good the claim and thus premium accrues where their funds and assets are situated, which is outside India. The source of income of NRRI is also outside India. Therefore, in our considered view observations of the Assessing Officer regarding taxability of reinsurance premium ceded to NRRI in India is absolutely contrary to facts and also well settled law. Further, only activity in reinsurance contract is bearing of risk and activity of indemnifying an Indian insurance company by foreign reinsurer takes place overseas and hence, foreign reinsurers bears risk abroad. Therefore....
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....s of NRRI is sans any evidence. Further, brokers have also declared that they merely act as facilitator and do not have any authority to conclude contract. Even the IRDAI (Insurance Brokers) Regulations, 2002, makes it clear that reinsurance agent / broker merely acts as facilitator and do not have authority to conclude contracts on behalf of the NRRI. This apart, amount collected by reinsurance broker in India is only as trustee of insurance money and same is to be held in separate bank account. Therefore, in our considered view, in absence of any authority to conclude contracts on behalf of foreign reinsurer, brokers cannot constitute business connection of foreign reinsurer in India in terms of Explanation 2 to section 9(1)(i) of the Income Tax Act, 1961. 12. At this point, we would like to take support from decision of the co-ordinate Bench of Mumbai Tribunal in the case of ADIT Vs. AON Global Insurance Service Ltd. in ITA Nos. 5184 to 5186/Mum/2009 dated 30.11.2015, where it has been held that insurance broker is an independent broker and not an agent. Therefore, in our considered view reinsurance premium paid to NRRI, where India is having DTAA with other countries wi....
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....urer in India. In fact, the learned CIT (A) has deleted disallowance in cases, where there is specific exclusion in the DTAA and the Department has not appealed against order of the learned CIT (A) for all assessment years, except assessment year 2009-10. In our considered view the view taken by the CIT (A) is perfectly in order, because, in those DTAAs there is specific exclusion of reinsurance premium from the ambit of business profits and thus, reinsurance premium ceded to NRRs where there is specific exclusion, same cannot be taxed in India and thus, provisions of section 195 is not applicable while making payments and consequently, the assessee is not required to deduct TDS. In other cases, where there is no specific exclusion of reinsurance premium, said amount can be taxed in India only if foreign reinsurance companies have PE in India. It is the allegation of the Assessing Officer that reinsurer had fixed place of PE or an agency PE or service PE in India. Most of the DTAAs define PE to mean fixed place of business, through which business of the enterprises is wholly and partly carried on and includes branch, office, factory, workshop etc. In the case of foreign reinsurers ....
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.... Supreme Court in the case of M/s. G.E. India Technology Centre Pvt. Ltd., 327 ITR 456 (SC), where it was held that application to deduct TDS arises only if income of non-resident is chargeable to tax in India. The Hon'ble Supreme Court has held that expression 'chargeable' under the provisions u/s. 195(1) of the Act says that remittance has got to be treated as receipt, whole or part of which is liable to tax in India, if tax is not assessable there is no question of tax at source being deducted. In our considered view, the basis for the Assessing Officer to take support from section 195(2) on the issue of non filing of application to income tax authority to allege that the assessee is liable to deduct TDS on impugned payment is incorrect. 15. Coming back to various case laws relied upon by the assessee. The assessee has relied upon various decisions of co-ordinate Bench of the Tribunal in the case of Insurance companies in support of their arguments. The relevant cases laws relied upon by the assessee are reproduced as under:- Swiss Re-Insurance Company Ltd vs DDIT - ITA No. 1667/Mum/2014 dt .13.02.2015. Summary: In the case of NRRI (Swiss Reinsuranc....
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....of Rs. 62.67 crores under section 40(a)(i) in respect of reinsurance premium paid to NRRI. The Pune Bench of the Tribunal reversing the disallowance held as follows: (a) Under re-insurance arrangements, the re-insurer enters into a reinsurance arrangement for a specific reason and the same is an independent contract (b) Following the decision in Swiss Reinsurance and ICICI Lombard General Insurance Co. Ltd., it was held that the NRRI does not have a PE in India (c) The Tribunal also took into consideration that the NRRI who is JV partner of the assessee, therein, the assessee was not held to be a FE of the NRRI. ADIT vs AON Global Insurance Service Ltd. - ITA No. 5184- 5186 Mum 2009 dt. 30/11/2015 Summnary : In the case of resident broker (AON Global Insurance Service Ltd) , the Mumbai Bench of the Tribunal held that insurance broker is an independent broker and not an agent. It also held that insurance broker does not carry out any activity on behalf of anyone in India and has no authority to enter into any contract in India . The Tribunal examined the scope of section 9(l)(i) and the DTAA and held that the insurance agent has....
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....ce of reinsurance premium made NRRI. The CIT (A) relying on the decision of the co-ordinate Bench of the Tribunal in case of Swiss Reinsurance Co. Ltd. decided in favour of assessee. On appeal before the Tribunal by the Department, the same was dismissed by following the decision in Swiss Reinsurance Co. Ltd. 14.2. The above decisions of various benches of the Tribunal unequivocally hold that the reinsurance premium paid by Indian insurers to NRRI is not taxable under the Act as well as the DTAA. Therefore, in respect of all categories of reinsurance premium paid to NRRI, income is not chargeable to tax under the Act. (i) M/s. Tata AIG General Insurance Company Ltd. Vs. DCIT in ITA No. 1718/Mum/2020 dated 25.04.2022: 3.17. Let us now examine the applicability of provisions of Section 40(a)(i) of the Act in respect of reinsurance premium paid to foreign reinsurers. We find that the ld. CIT (A) had placed reliance on the decision of Chennai Tribunal in the case of Cholamandalam MS General Insurance Co. Ltd to drive home the point that the said payment shall be liable for deduction of tax at source in terms of Section 40(a)(i) of the Act. We find that t....
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....e applicable to the assessee's case before us also by drawing the same analogy. The relevant operative portion of the judgement is reproduced hereinbelow:- "11. We have carefully considered the rival submissions and perused the relevant material and record. As our discussion in the earlier paras show, the substantive dispute in this appeal relates to the taxability or otherwise in India of the reinsurance premium earned by the nonresident foreign assessee by underwriting the risks of various Indian insurance companies. It is not in dispute that the appellant before us is an entity incorporated in Germany and is a tax resident of Germany. The manner in which the reinsurance premium is earned by the assessee is also not in dispute. But to recapitulate, we may note that the appellant is a global re-insurance company which has entered into re-insurance contracts with various Indian insurance companies. For underwriting the risks of the Indian insurance companies, assessee earns reinsurance premiums, which is the subject-matter of dispute before us. So far as the nature of receipts in question is concerned, there is a convergence between the assessee and the Revenue that the sa....
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....the Bar, the LO has complied with the conditions imposed by IRDA and there is no adverse view determined by IRDA. Thus, on facts we do not find any force in the plea of the Revenue; and, even on the point of law, as has been brought out by the Hon'ble Delhi High Court in the case of National Petroleum Construction Co. (supra), the LO merely acts as a channel of communication between the Head office and the parties in India and cannot undertake any commercial, trading or industrial activity, and thus, the activities of the LO cannot give rise to a 'business connection' within the meaning of Sec. 9(1)(i) of the Act or a PE of the assessee in India, considering that the activities are compliant with the approval granted by IRDA. 18. We may now address the point as to whether the operations of the Indian subsidiary, which have indeed been carried out from India, can be construed as enabling invoking of 'business connection' of the assessee as envisaged under Section 9(1)(i) of the Act or whether the Indian subsidiary constitutes a PE of assessee in India. Article 5(1) of the India- Germany Tax Treaty provides that PE means a fixed place of business through which the....
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....n insurance companies, but no further recommendations are made by the Indian subsidiary. It is only the assessee through its own personnel who examines the proposal and negotiates the terms and conditions of the reinsurance contracts. There is nothing to dispute the assertions of the assessee that the infrastructure, personnel and approvals to carry out reinsurance activities are from outside India. Thus, there is nothing to suggest that the core activities of the reinsurance business of the assessee are carried out in or from India by the Indian subsidiary. 19. Moreover, in the context of Article 5(1) of the India-Germany Tax Treaty, what is essential is to examine whether there exists an assessee's fixed place of business in India or not. Factually or legally speaking, the place of business of Indian subsidiary per-se can in no way be equated to mean the fixed place of business of the assessee in India. In fact, in this connection, the observations of the Hon'ble Supreme Court in the case of E funds IT Solution Inc (supra) are very apt. In para 12 of its order, the Hon'ble Supreme Court has dealt with in detail, by making reference to the findings of the Hon'ble H....
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....luded contract or secured orders on behalf of the assessee, we find that such burden has not been discharged by the Revenue. In fact, at the time of hearing, the learned representative for the assessee referred to an illustrative agreement placed at pages 28 to 102 of the Paper Book, which is a reinsurance arrangement with SBI Group Life, which has been entered into by assessee and the Indian insurance company, i.e. SBI Group Life directly. Therefore, factually also, we find no support for the case of the Revenue that the Indian subsidiary constitutes a dependent PE of assessee in India. 21. Before we conclude, we may also refer to some of the precedents which have been cited before us in order to establish that in somewhat similar situations, foreign companies engaged in reinsurance business have not been found to be having a fixed PE or an agency PE in India in the form of an Indian subsidiary. (ii) In this context, reference has been invited to the decision of the Mumbai Bench of the Tribunal in the case of Swiss reInsurance Co. Ltd. vs DDIT(IT), [2015] 55 taxmann.com 520 (Mumbai - Trib.), which according to the learned representative, is directly on the point. We have ....
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....the ground of failure to deduct the requisite tax at source. Our co-ordinate Bench held that the foreign reinsurance company earning reinsurance premium from the Indian concerns was not liable for tax in India and, therefore, the action of the Assessing Officer was set aside. 22. All these decisions as well as our discussion aforesaid enables us to come to a conclusion that the income-tax authorities have erred in holding that there exists a 'business connection' in India under Section 9(1)(i) of the Act and also that there exists a PE in India within the meaning of Article 5(1) and/or 5(4) of the India-Germany Tax Treaty. In view of the aforesaid discussion, we hereby set-aside the order of Assessing Officer and uphold the stand of the assessee. As a consequence, so far as Ground of appeal nos. 1 to 4 are concerned, the same are treated as allowed. 3.19. Similar view was taken by the Co-ordinate Bench of Pune Tribunal in the case of Bajaj Alliance General Insurance Co. Ltd. ,vs. DCIT in ITA No. 2560/PN/2012 for A.Y.2008-09 dated 03/02/2016 vide paras 26- 43. For the sake of brevity, the relevant operative portion of that Pune Tribunal order is not reproduced ....
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....- As per the appellant there are certain treaties which provides that insurance business except reinsurance business would be deemed to be a PE of the non resident in the other contracting state. AO has allowed reinsurance premium ceded to such non resident where there is a specific exclusion for the insurance companies from the purview of PE. As a corollary implies that where there is no specific exclusion, the reinsurance business would be deemed to be a PE in the other contracting state.‖ (Underlining provided by this Tribunal) 3.23. We hold that the aforesaid observation of the ld. CIT (A) is incorrect in view of the aforesaid decision of Mumbai Tribunal dated 13/02/2015 and in view of the fact that Article 5(4) of the treaty does not apply to reinsurer. Moreover, the ld. CIT (A) accepts the existence of independent brokers involved and if it is so, it cannot constitute a PE. 3.24. Hence, the entire observations of the lower authorities had been duly addressed in the aforesaid findings by us. At the cost of repetition, we would like to reiterate the fact that there is absolutely no dispute that the foreign reinsurers does not have any place of business in India / permanen....