Swiss Re-insurance Company Limited vs. DDIT (ITAT Mumbai)

DATE: February 13, 2015 (Date of pronouncement)
DATE: February 16, 2015 (Date of publication)
AY: 2010-11
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Service PE: Establishing subsidiary in other treaty country does not result in creating PE of a foreign holding company in the third country. As the employees of SRSIPL are not providing services to the assessee as if they were the employees of the assessee, there is no "service PE"

The AO is not right in (i) treating the assessee as having a Dependent Agency Permanent Establishment; (ii) laying down that the assessee has a business connection in India; (iii) treating SRSIPL as service PE and (iv) treating SRSIPL as Agency PE. Ld. The assessee does not fulfill any of the mandatory conditions for the aforementioned allegations. Article 5(4) of the Indo-Swiss Treaty categorically excludes cases of reinsurance services. The agreement between the assessee and SRSIPL does not include contracts of reinsurance and confirmation of liability. The law on the subject of PE/ service PE/ agency PE is laid down in E-Funds IT Solutions, 42 50, Varian India Pvt. Ltd., 33 249 and eBay International AG, 25 500. The facts of the case in hand clearly show that the employees of the SRSIPL has only provided services to SRSIPL and there is no noting on record to prove that the employees had provided services to the assessee or the assessee is paying their salaries or perquisites. DIT(IT) vs.Morgan Stanley & Company, 292 ITR 416(SC), Centrica India Offshore P. Ltd. Vs. CIT, 44 300 and Jebon Corporation India vs. CIT, 245 CTR 300(Kar) distinguished.

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