Mere establishment of Subsidiary in India does not tantamount to Having Permanent Establishment in India
The Assessee is a company based out in Austria. The Assessee is having a Subsidiary Company in India. The Appellant has received software-related services income during the year. Apart, The Company also received reimbursement of expenses from Indian Subsidiary. However, the Company claimed the same as exempted Income as expenses are recovered on cost to cost basis without any markup. Further, the Company also supplied goods to Indian Entities on a principal to principal basis. The Ld. AO Charged Income tax on reimbursement of expense claiming that such income pertains to technical income provided to Indian subsidiary. Further, AO assumed that entire sales in India are made through Indian Subsidiaries. The Asseesee has a fixed place of business in India in the form of Indian Subsidiary. The ‘core business’ of the assessee is conducted through Mosdofer India Private Limited. Therefore, profit attributable to such PE is taxable in India.
