India: Liaison office did not constitute PE; amalgamation plan rejected (court decisions)

Two recent tax-related court decisions

Amalgamation plan rejected

The KPMG member firm in India prepared reports about two recent tax-related court decisions (read more at the hyperlinks provided below).

  • Liaison office did not constitute permanent establishment (PE) in India: The Mumbai Bench of the Income-tax Appellate Tribunal held that the taxpayer’s liaison office did not constitute a PE in India under the India-Switzerland income tax treaty because the taxpayer did not conduct any activity through the office other than routine communication and client coordination, and the office’s staff in India were not able to negotiate with customers, sign or finalize contracts, or otherwise run the office on their own. The activities of the office were thus preparatory and auxiliary and as such, did not create a PE in India. The case is: S.R. Technics Switzerland Ltd v. ACIT. Read a January 2023 report [PDF 418 KB]
  • Amalgamation plan rejected: The Delhi Bench of National Company Law Tribunal rejected the taxpayer’s amalgamation plan because it did not expressly provide for compliance of provisions relating to carry forward and set off of accumulated loss and unabsorbed depreciation under Section 72A of the Income-tax Act, 1961. The case concerned the amalgamation plan of Minda TG Rubber Private Limited with Toyoda Gosei Minda India Private Limited. Read a January 2023 report [PDF 382 KB]


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