For purposes of Article 20 of the India-Korea DTAA, a Government undertaking with corporate status cannot be equated to the Government. Even if the Articles of Incorporation make it clear that the Government has pervasive control over the undertaking, it still cannot be treated to be a wing or an integral part of the Government. However, the fundamental requirement of Article 20(1)(a) is that the remuneration should be paid by the Contracting State. Even if it is paid out of funds allocated by the Government to the undertaking specifically towards personnel expenses, the requirement of Article 20(1) is satisfied. It is as good as payment by the State itself. The expression “payment by a Contracting State” cannot be given a rigid or literal interpretation so as to cover the payments made directly by Government or a department of the Government. Even if the payment is made out of State’s funds set apart for that purpose, the requirement of Section 20(1)(a) will be attracted and the Indian income-tax cannot be levied in such a case.

Where the applicant had entered into a joint venture with two Indian companies for providing consultancy services for the development of tunnels and the question was whether the JV constitutes an ‘Association of Persons’, HELD: (i) An ‘AOP’ is one …

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Where the applicant entered into a contract with Raytehon USA for the acquisition of hardware and customized software and the title to the hardware was to pass outside India and all activities under the contract (except for installation and support …

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The agreement was for rendering a ‘service’ and did not involve consideration for the ‘use or right to use equipment’ and not ‘royalty’ u/s 9 (1) (via). The consideration was not a ‘rental’ as the payee was not in custody or control of the equipment of BTA. The meanings of the words “use” and “right to use” explained in detail. It is also not ‘royalty’ u/s 9 (1) (iii). It is also not “fees for included services” under Article 12 (4) of the DTAA.

As the trademarks etc had been registered and used in India and enjoyed high reputation and goodwill in the Indian market, they had a “tangible presence” in India and were located in India. The facts showed that they became inextricable components of the business of manufacture and marketing of Foster’s lager beer in India by the group company of the applicant.