Partners Medical International Inc. v. Dy. CIT (IT) (2023)101 ITR 40) (SN) (Mum)(Trib)

S. 9(1)(i) : Income deemed to accrue or arise in India-Business connection-Not-For-Profit entity incorporated in U. S. A. and exempt from Federal Income-Tax-Providing consulting and education and teaching programs to Hospitals, Medical Schools, Healthcare Institutions under agreements with Medical Institutions-Receipts are not taxable in India-Reimbursement of expenses also not taxable-DTAA-India-USA.[S. 9(1)(vi), 9(1)(vii), Art. 7, 12(3) 12(4)(b), 12(5)(c)]

Held, allowing the appeal, that for the AYs 2006-07 to 2009-10, the Tribunal having taken a consistent view that similar receipts from hospitals and healthcare institutions were neither royalty nor fees for included services, the addition on account of royalty or fees for included services in the hands of the assessee was not sustainable. Further, the income being in the nature of business profits was not taxable in India in the absence of a permanent establishment of the assessee in India. The reimbursement of expenses also could not be held to be taxable, since the main receipts had been held to be not taxable. (AY. 2011-12)