Business income of NR isn’t taxable if its dependent agent is remunerated on ALP basis and is charged to tax

Business income of NR isn’t taxable if its dependent agent is remunerated on ALP basis and is charged to tax

Where AE of assessee also constituted its PE and was remunerated on ALP, then nothing further was left to attribute to PE

The Tribunal held in favour of assessee as under:

1) It was observed that the income in respect of voyages which had been considered as chargeable to tax in India as per Article 7 of the India-Singapore DTAA was the amount on which the assessee paid commission, etc., to CMA, which was its AE and also a dependent agent;

2) The receipt in the hands of the CMA had been determined at ALP under due process of law;

3) Where the AE also constitutes a PE and was remunerated on ALP, then nothing further was left to attribute to the PE. Thus, it was held that income in respect of voyages couldn’t be included in the hands of the assessee - ANL SINGAPORE PTE. LTD V. DY. DIT (2013) 37