Income Tax Appellate Tribunal (Mumbai) ruled that the onus is on the Revenue Department to show that the agent in India of a foreign company is not an agent of independent status within the meaning of Article 5(6) of Indo French Double Taxation Avoidance Agreement (DTAA) as the transactions between the agent and the foreign company were not made under at arm’s length conditions, thus the agency constitutes a Permanent Establishment in India.
The Tribunal said such a finding “is a sine qua non for making out a case for existence of Dependent Agency Permanent Establishment (DAPE) in the context of Indo French DTAA”.
