(iv) British Airways has a branch in India that was a permanent establishment (“PE”) in India and, therefore, income from a permanent establishment in India was taxable, as it is not covered by double taxation.14 That the Learned Addl. Director was totally unaware that the only expected revenue pool in the aviation sector that concerns the complainant company is the IATP pool. This too is duly recognized and falls under Article 8 of the DBAA, and income derived from it is exempt from taxation in India. one. For the purpose of determining the profit of a permanent establishment, expenses incurred for the purposes of the permanent establishment, including administrative and administrative costs so incurred, whether admitted in the Contracting State in which the permanent establishment is situated or elsewhere, shall be permitted by the provisions and subject to restrictions imposed by the tax laws of that Contracting State. To the extent that the law of the Contracting State in which the permanent establishment is situated provides for a limitation on the amount of administrative and general costs and such limitation by a limitation provided for in 1, the competent authority of that State Party shall notify the competent authority of the other State Party immediately after the entry into force of this Convention, its agreement or protocol with that third country, the provisions of paragraph u nd if the competent authority of the other State Party so requests; the provisions of this paragraph shall apply from the date of entry into force of this Convention. 7. Ld. DR argued that one of the activities from which Assessee derived revenue during the years under attack was technical management. Although the evaluator claimed to have provided “technical handling services” in accordance with the agreements submitted, the type of service was referred to as “ground handling”.
The evaluator provides his services “by flight” for a fixed period of time. The services offered also vary in quality and coverage. Ld DR also argued that Assessee also had a large number of other facilities. Assessee does not have a uniform pricing policy for the services it provides and the rates charged for the same type of aircraft, i.e. A-330, vary from airline to airline. Similarly, there are different tariffs on the basis of the duration of the services as well as for additional services, as expressed in the table drawn up during the hearing. The Ld. DR also argued that Assessee provides its services both to IATA/IATP member airlines and to non-IATP members. Assessee also provides its services under bilateral service agreements and on an ad hoc basis, without agreement. Assessee has drawn up direct invoices indicating the amount to be paid on the basis of the actual use of the services and the period, i.e.
thirty days during which that amount is payable. Assessee also receives a service fee directly from the recipients of the service. Service agreements with certain airlines have been incorporated by TDS and Austrian Airlines has also withdrawn TDS. Similarly, amounts collected by Austrian Airlines and others are subject to service tax. The agreement with Singapore Airlines contains an integrated “termination clause” as well as an “annual price review”. The agreement with Singapore Airlines & Austrian Airlines also provides for the subcontracting of services to KLM. However, Assessee calculated respectively 625 $US and 340 euros by Singapore & Austrian Airlines for its services. Assessee also promoted a JV called Air France Ground Handling Pvt. .