AIROnline 2025 SC 635

Income-Tax Act (43 of 1961) , S.143(3)— Indo-UAE Double Taxation Avoidance Agreement (DTAA), Arts. 4, 5, 7 – Income tax – Company tax resident of UAE – Taxability of income in India – Permanent establishment in India – Appellant company incorporated in Dubai was tax resident of UAE – Under Indo-UAE Double Taxation Avoidance Agreement (DTAA) , profit of an enterprise shall be taxable only in the State of its residence, unless the enterprise carried on business in the other Contracting State through a permanent establishment (PE) situated therein – DTAA defined PE as “a fixed place of business through which the business of an enterprise is wholly or partly carried on” – Strategic Oversight Services Agreement (SOSA) between appellant and Indian Company for strategic planning services for development of hotels indicated appellant’s ability to enforce compliance, oversee operations, and derive profit-linked fees from the hotel’s earnings – Same demonstrated a clear and continuous commercial nexus and control with the hotel’s core functions which satisfied conditions necessary for constitution of a Fixed Place Permanent Establishment under Article 5(1) of DTAA – High Court had rightly upheld finding that the appellant had a fixed place PE in India within the meaning of Article 5(1) of DTAA, and that, income received under SOSA was attributable to such PE and was therefore taxable in India
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