S. 9(1)(i) : Income deemed to accrue or arise in India – DTAA – India – Mauritius – Change of domicile from British Virgin Islands to Mauritius – Entitle to benefits of India-Mauritius DTAA – Dependent agency permanent establishment (DAPE) – As long as an agent is paid an arm’s length remuneration for the services rendered, nothing survives for taxation in the hands of the dependent agency permanent establishment. [Art. 5(4), 7(2)]

Dismissing the appeal of the revenue the Tribunal held that when a company changes its domicile from British Virgin Islands to Mauritius, the company would be entitled to the benefits of India-Mauritius DTAA. Further held that, as long as an agent is paid an arm’s length remuneration for the services rendered, nothing survives for taxation in the hands of the dependent agency permanent establishment. Viewed thus, the existence of a dependent agency permanent establishment is wholly tax neutral. (ITA No. 4628-29/Mum/2006, 1877/Mum/2018 and CO No. 123/Mum/2018 dated July 30, 2021 (AY 2000-01, 2001-02)

[Hon’ble Shri Pramod Kumar, Vice President and Hon’ble Shri Pavan K. Gadale, Judicial Member]