Two employees were seconded to AE as full-time working employees and, for administrative convenience, part of salary was paid by assessee in USA but same was reimbursed to it on cost-to-cost basis by AE and as such, they were not employees of assessee and did not render any services to assessee with respect to supervisory PE in India. Assessing Officer added their salary including amount reimbursed by AE to income of supervisory PE of assessee. On appeal the Tribunal held that salary of these employees was paid by AE on which it deducted eligible taxes and issued TDS certificate in Form 16 and said employees also filed their return of income in India and copy of same was furnished before Assessing Officer and employment agreement between them revealed that they were working exclusively for AE.  Assessing Officer was directed to delete addition made by him. Assessee, a US company, had sold certain goods to its AE in pursuance of purchase agreement which was signed by two employees of AE (Tim and Matt) on behalf of AE being managing directors Assessing Officer held that said 2 employees were working for assessee and, accordingly, he was of view that there existed a dependent agency PE with respect to such transaction as per article 5 of DTAA. On appeal the Tribunal held that Tim and Matt were not employees of assessee but were employees of AE of assessee and therefore, purchase agreement was entered on behalf of AE in capacity of authorized signatory being directors.  Accordingly, it could be concluded that there was no connection of said employees and assessee which could establish agency PE in India.   Whole basis for treating transaction of impugned sale and purchase as attributable to agency PE was not sustainable. (AY. 2015-16)