Where the assessee foreign company was a golf organizer and entered into arrangements with Indian parties for conducting golf events in India and earned income by way of sponsor fees, management fees etc and the question arose whether such income was taxable in India, HELD:
(i) In order to constitute a “permanent establishment” under Article 5.1 of the Treaty, there had to be a “fixed place” through which “the business was carried on”.
(ii) During the days when the golf tournament is conducted, the Golf Course can be regarded as a “place of business” because the center of income earning activities was at that particular place and the Golf Course was at the disposal of the applicant for the stipulated time frame and it could exercise some limited rights. The fact that the duration is short is not relevant.
(iii) However, the words ‘carried on’ conveys the ingredient of regularity, continuity and repetitiveness and as there was a solitary or isolated activity during the year, it was difficult to infer the existence of a PE.
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