SERVERS AS PERMANENT ESTABLISHMENTS

SUBJECT
Law of Taxation - I

SUBMITTED TO
Dr. Anjani Singh Tomar

SUBMITTED BY
Karthik Sundar 12B089
Pranay Govil 12B095
Priyam Shah - 12B101
Siddhant Sattur 12B134
VII Sem, IV Year

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TABLE OF CONTENTS

INTRODUCTION........................................................................................................3
CHAPTER ONE..........................................................................................................5
I. WHAT ARE PERMANENT ESTABLISHMENTS?...............................................................5
II. BUSINESS CONNECTION INDIAS VERSION OF A PE.............................................9
CHAPTER TWO........................................................................................................11
I. E-COMMERCE AND PERMANENT ESTABLISHMENTS..................................................11
II. SERVERS AS PERMANENT ESTABLISHMENT.............................................................11
BIBLIOGRAPHY..16

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INTRODUCTION

In the era of Globalization, it is essential for multinational companies to maximize

profits by expanding their labor, resource and business markets in foreign countries so
as to minimize costs and maximize profits. The logical way to do this is by the
utilization of cheap raw materials and labor that can be found in developing and
under-developed countries. Another way to save costs is to invest in markets that have
a low tax jurisdiction. In furtherance of this, international tax treaties are created so as
to encourage efficiency of such cross border trade and interaction. With greater
technological development, our economy has moved into a sphere largely occupied by
electronic commerce. As this e-economy changes, it affects everything we do, from
the way we conduct out business to the way in which rules and conventions of tax are
altered and modified to meet the growing needs of business. Tax rules change and
adapt to accommodate ever-expanding issues of jurisdiction to tax, classification of
income that is taxable from these e-transactions, source of income generated by this
electronic commerce and the issues of tax enforcement. The Organization for
Economic Co-operation and Development is the leader in studying and establishing
international tax rules and conventions for the conduct and taxability of e-commerce.
This dissertation focuses on the concept of permanent establishments as defined and
codified by the OECD Model Tax Convention, and the relevance of the same in
adjudicating whether or not servers would constitute PEs. The entire dissertation is
researched and written in the context of the laws and principles that are applied by
Indian tax and judicial authorities, while keeping in mind the issue of taxability as is
governed by the provisions of the Income Tax Act, 1961 (ITA). Under section 4,
read with section 5 of the ITA, residents are subject to tax in India on their worldwide
income whereas non-residents are taxed only on Indian source income. In this respect,
section 5 of the ITA states:
5. Scope of total income.
(1)
(2) Subject to the provisions of this Act, the total income of any previous year
of a person who is a non-resident includes all income from whatever source
derived which
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(a) is received or is deemed to be received in India in such year by or on

behalf of such person; or
(b) accrues or arises or is deemed to accrue or arise to him in India during such
year.
Therefore, a non-resident may be subject to tax in India only to the extent that its
income is received, accrues, arises, or is deemed to be received, accrued or arisen in
India. For the purposes of the ITA, the term resident and non-resident are defined in
terms of section 6, whereby a company, to be deemed to be a resident must either be
(a) formed and registered under the Indian Companies Act, 1956; or (b) the control
and management of its affairs must be situated wholly in India.

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CHAPTER ONE

I. WHAT ARE PERMANENT ESTABLISHMENTS?

Under Article 5 of the OECD Model Convention With Respect to Taxes on Income
and On Capital, Permanent Establishment is defined as
For the purposes of this Convention, the term permanent
establishment means a fixed place of business through which the
business of the enterprise is wholly or partly carried on.
Article 7 states that:
Business profits
1. The profits of an enterprise of a Contracting State shall be taxable
only in that State unless the enterprise carries on business in the
other Contracting State through a permanent establishment situated
therein. If the enterprise caries on business as aforesaid, the profits of
the enterprise may be taxed in the other State but only so much of
them as is attributable to that permanent establishment.
It is important to note here that the words place of business used in Article 5(1) are
qualified by the use of the words through which. It has been held that the business
income as under Article 7 of the Tax Treaty must be earned through such place of
business for there to be a PE determination. By earning through this place of
business, it is meant that the business must be wholly or partly be carried out in that
situs. In this context the Commentary to the OECD Model Tax Convention
reiterates:
The words through which must be given a wide meaning so as to
apply to any situation where business activities are carried on at a
particular location that is at the disposal of the enterprise for that
purpose.1
Several courts in India have held that Article 5 of the Tax Treaty is exhaustive in
defining PE, while business connection is provided an expansive definition section
9(1)(i).2
The general modus operandi of International tax treaties is to be in such a manner so
as to avoid double taxation. In order to avoid this, these treaties use residence as
1 Para 4.6, Model Tax Convention on Income and Capital, OECD Committee of Fiscal Affairs
Volume I Commentary on Article 5 , OECD, Paris [July 2005]

2 Western Union Financial Services Inc. v. DDIT, (2006) 101 TTD 56 (Del); Al Nisr
Publishing, In Re (1999) 239 ITR 879 (AAR); TVM Ltd. v. CIT, (1999) 237 ITR 230 (AAR).

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criteria to establish a nexus for taxing a person or an entity within its territorial limits 3.
It is widely accepted and understood that a State may only charge a foreign person or
entity with a tax liability if it can be established that he/ she/ it has a substantial
economic interest in the taxing State. However, if two or more countries expand their
tax jurisdictions to include foreign taxpayers, what can happen as a consequence is
that those taxpayers are now susceptible to overlapping taxation by more than one
jurisdiction. Thus, standard structures like the Model Tax Convention of the
Organization for Economic Co-operation and Development (OECD MC), and the
United Nations Model Convention for Tax Treaties between Developed and
Developing Countries were created, as a response.
The term Permanent Establishment is most often found in international tax treaties.
It is a tax concept, which indicates that a certain level of business activity in a State
other than the residence State of the person carrying on concerned business 4
(commonly known as the Source State.) The concept of a PE is incorporated in Article
5 of the OECD MC, where in seven paragraphs the terms, conditions and
requirements for a PE are illustrated. The concept of a permanent establishment under
this Model is important as it marks the line between simply trading with a country and
trading in that country. The business profits of an enterprise are only taxable in
another State if the enterprise carries out its business activities through a permanent
establishment situated in that State. Thus, the main use of the concept of PE is to
establish the right of a State to tax the profits or gains of an enterprise of another
State. This is provided for in Article 7 of the OECD MC, wherein a State cannot have
the right to tax another enterprise unless that enterprise operates through a permanent
establishment situated in the taxing State 5. According to Article 5 of the OCED MC,
which is the framework generally used for negotiating tax treaties, there exist three
3 Leonardo F.M. Castro, PROBLEMS INVOLVING PERMANENT ESTABLISHMENTS: OVERVIEW
OF

RELEVANT ISSUES IN TODAYS INTERNATIONAL ECONOMY , 2 Global Bus. L. Rev. 125 (2012).

4 ibid.
5 See clause 1 of Article 7 of the OECD MC: 1. The profits of an enterprise of a Contracting
State shall be taxable only in that State unless the enterprise carries on business in the other Contracting
State through a permanent establishment situated therein. If the enterprise carries on business as
aforesaid, the profits of the enterprise may be taxed in the other State but only so much of them as is
attributable to that permanent establishment.

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general types of PEs: (a) the fixed place of business PE; (b) the agency PE; and (c) the
service PE.
The first clause of Article 5 of the Model Convention defines a permanent
establishment to exist where an enterprise carries on business in another country
through a fixed place of business, wholly or partly 6. This definition includes three
basic requirements in order for a PE to be present:
1. A place of business, which is at the disposal of the enterprise;
2. The place of business must be of a fixed nature;
3. The enterprise being carried on has to be carried on through this place of
business.
Therefore, on a plain reading of the Convention, it seems to suggest that there must be
a specific situs or tangible element. To complement this generic definition laid down
in the first clause of this article, the second clause lays down an illustrative (nonexhaustive) list of what a permanent establishment actually consists 7. On a cursory
reading of this provision only it is clear that these examples reinforce the need for a
physical facility for a PE to exist. In Furgo Engineers BV v. ACIT8, it was held that
even if a company is engaged in carrying out activities on board a ship that belonged
to three different clients, it would still constitute a PE, therefore clarifying in our
domestic context the understanding of a PE as more than just a stationary physical
facility.
In addition to these two provisions, clause 4 of this Article provides a list of that
which does not constitute a permanent establishment9. The provisions of this clause
are designed in such a way so as to prevent an enterprise being taxed by another State
on account of a PE, if the activities of the enterprise are merely preparatory or
6 See clause 1 of Article 5 of the OECD MC: 1. For the purposes of this Convention, the
term "permanent establishment" means a fixed place of business through which the business of an
enterprise is wholly or partly carried on.

7 See clause 2 of Article 5 of the OECD MC: 2. The term "permanent establishment"
includes especially: a) a place of management; b) a branch; c) an office; d) a factory; e) a workshop,
and f) a mine, an oil or gas well, a quarry or any other place of extraction of natural resources.

8 Furgo Engineering B.V v. ACIT [2008] 122 TTJ 655 (Del)

9 See clause 4 of Article 5 of the OECD MC:
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auxiliary in nature. The same was upheld in UAE Exchange Centre Ltd v. Union of
India10. From a general understanding, a place of business means any location utilized
in carrying out the activities of the enterprise, although it is not necessary that such
facilities are used specifically only for the purposes of business. Further, it is also
possible for a place of business to exist without the presence of premises or
facilities11. The enterprise or the foreign taxpayer in such a case must have the power
to control the said place of business, and further must have the right to determine the
conditions according to its/ his needs12. The minimum period of time to determine the
existence of a PE is heavily debated among different domestic courts. Nevertheless,
isolated activities will not give rise to a PE. The criteria of regularity, continuity, and
minimum time period for a business to develop a genuine economic link to the Source
must be fulfilled before it can be established that a PE certainly exists 13. To add to
this, the OECD suggested a change to the Commentary such that an enterprise present
in another state for only a short period of time could be taken to be a permanent
establishment if its presence in that other state is recurrent. In the case Joseph Fowler
v. MNR14, an American resident who sold knives and other kitchen devices at the
Vancouver Pacific National Exhibition every year, for several weeks, was held to be
carrying on business in Canada through a permanent establishment. Thus, it can be
inferred that a PE starts to exist as soon as an enterprise commences its business
through a fixed place of business.
On the other hand, an agency PE exists under Article 5 of the Convention, wherein it
is understood than when an agent acts on behalf of a foreign principal and has the
authority to conclude contracts for the same, an agency PE is said to exist 15. An
10 See (2009) 11 ITLR 714.
11 See Ministry of Finance (Tax Office) v. Phillip Morris GmbH, 4 INTL TAX L. REP. 903
(Italy 2002) (held that substance over form is considered one of the five principles applicable to the
definition of Permanent Establishment.)

12 COMMENTARY

ON

ARTICLE 5

OF THE

OECD MODEL TAX CONVENTION (available at

http://www.oecd.org/berlin/publikationen/43324465.pdf.)

13 Leonardo F.M. Castro, PROBLEMS INVOLVING PERMANENT ESTABLISHMENTS: OVERVIEW

OF

RELEVANT ISSUES IN TODAYS INTERNATIONAL ECONOMY , 2 Global Bus. L. Rev. 125 (2012)

14 See (1990) 90 DTC 1834

15 See clause 5 of Article 5 of the OECD MC:
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enterprise is deemed to be an agency PE in a foreign jurisdiction when the agent is

carrying on the business of the enterprise in the ordinary course of business. It must
be noted that the power to conclude contracts is a determining factor under clause 5 of
Article 5 of the Convention. Consequently, for an agents activities to give rise to a
PE, it is essential that the agent has sufficient authority, habitually exercised in the
foreign state where the enterprise is functioning, to conclude and negotiate contracts
on behalf of the principal enterprise16.
There exists a third kind of PE the service PE, which is attracted by a foreign
enterprise, if the employees of that enterprise furnish or perform services in another
State, which are other than services which might be covered under the head of
Royalties or Fees for technical services. The most important test for a service PE is
the test of furnishing of services. For example, let us assume there is a Double
Taxation Avoidance Agreement between two states, and the period specified in the
Agreement is ninety days within any 12 month period 17. This lien will have to
established for the employees providing services, in order to constitute a Service PE18.
II. BUSINESS CONNECTION INDIAS VERSION OF A PE
Business Connection or BC is the Indian equivalent of a permanent establishment. It
has a wider connotation than a PE and is enforced by the tax authorities in the country
quite effectively. The Finance Act of 2003, as an explanation to Section 9 of the
Indian Income Tax Act, 1961, inserted the definition of the term 19. Section 9(1)(i) of
the Income Tax Act provides that any income earned, directly or indirectly, through a
business connection in India, would be taxable in India since the income would be
deemed to arise or accrue in India20. Before the legislative inclusion of the meaning of
business connection, there were a number of judicial decisions. The oldest case,

16 COMMENTARY

ON

ARTICLE 5

OF THE

OECD MODEL TAX CONVENTION (available at

http://www.oecd.org/berlin/publikationen/43324465.pdf.)

17http://www.taxindiaonline.com/RC2/inside2.php3?
filename=bnews_detail.php3&newsid=6675, last accessed on 08.03.2015.

18 Ibid.
19 See section 9 of the IT Act, 1961.
20 See clause 1 of section 9 of the IT Act, 1961.
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defining the term, was decided by the Rangoon High Court21, where the court
interpreted the expression to denote something which produces profits or gains, and
not simply a state or condition which is favorable for making of profit. In another case
before the Bombay High Court, it was held that in order to constitute a BC, it is
essential that the following conditions exist:
1. a business in India;
2. an income earned by a non-resident person or entity, through a connection to
this business;
There are a plethora of cases that followed these two which contributed to the
discourse of what constitutes a BC. The Landmark judgment of the Andhra Pradesh
High Courts compiled the ratios of all other judgments and laid down the following
principles:
1. The existence of a BC between an Indian person or entity and a non-resident
or non-Indian entity is a mixed question of fact and law, and must be
determined based on the facts and circumstances of each case;
2. The core essence of a BC is that there exists a real, intimate relationship and a
commonness of interest between the Indian and non-resident person/entity;
3. If it can be showed that there is control or management or a substantial
holding of equity shares or sharing of profits by the non-resident, of the Indian
entity, the above condition can be deemed to have been satisfied;
4. The word BC has some precise attributes, however, it is too broad to admit
any precise definition;
5. It is essential that there be a continuity of activity of the non-resident with the
Indian party. Stray or isolated transactions are not sufficient to constitute a BC.
In essence, for a business connection to exist there must be continuity, a real and
intimate connection, a traceable attribution of income, common control by the foreign
entity and a professional connection to India22.

21 CIT v. Visalakshi Achi [1937] 5 ITR 448

22http://www.nishithdesai.com/fileadmin/user_upload/pdfs/Business_Connection_and_Perma
nent_Establishment.pdf, last accessed on 08.03.2015.

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CHAPTER TWO

I. E-COMMERCE AND PERMANENT ESTABLISHMENTS

The main issue around e-commerce transactions is that the rules and
conventions of international tax law are fundamentally based on one form or
the other of physical presence. The idea of e-commerce is divorced from this
idea of physical presence, which clashes head first with the international tax
understanding. While, it can be argued that a server constitutes a permanent
establishment, an Internet website does not have a physical presence and thus
cannot constitute a place of business. Thus, no permanent establishment can
exist. This distinction is critical, since the entity that carries on business
thorough a server may be different from the one that is operating or carrying
on business through a website. It is extremely common for Internet Service
Providers (ISP) to host other websites on its server. Thus, it would come into
question as to whether an ISP would constitute a permanent establishment or
not, under Article 5(5) of the OECD MC. But, this will not be the case since
1. ISP will not constitute an agent of the enterprise that owns and operates the
website;
2. It does not have the authority to conclude contracts on behalf of that
enterprise;
3. Instead, ISPs would constitute independent (rather than dependent) agents,
by virtue of the fact that they host a variety of websites of a variety of
enterprises.
II. SERVERS AS PERMANENT ESTABLISHMENT
From the previous chapter, it can be inferred that in order for a Server to
constitute a PE in India, the following requirements would have to be fulfilled:
1. The server should be fixed;
2. It should be used in order to carry on the business of a non-resident or a nonIndian entity;
3. It should be at the disposal of this non-Indian person or entity;
4. It should be operated and maintained by the non-Indian person or entity.
The Commentaries of the OECD Model Tax Convention have often been
guiding in the interpretation of Indian courts with regards to interpreting the
11 | P a g e

tax laws of the country. The commentary on Article 5 states that a PE may
exist even if the business of the enterprise is carried out mainly through
automatic equipment, wherein the non-resident person or entity is only
involved in the setting up, operating, controlling and maintaining of such
equipment23. In order for a server to be considered fixed, it is necessary that
it be located at a certain place for a sufficient time period, so as to become
fixed. In this context of servers constituting fixed place PEs of non-resident
entities in another State, the Commentary of the OECD MC provides that,
42.4 Computer equipment at a given location may only
constitute a permanent establishment if it meets the requirement
of being fixed. In the case of a server, what is relevant is not the
possibility of the server being moved, but whether it is in fact
moved. In order to constitute a fixed place of business, a server
will need to be located at a certain place for a sufficient period of
time so as to become fixed within the meaning of paragraph 1 (of
Article 5).24
The Income Tax Appellate Tribunal (ITAT), in the case of Income Tax Officer
v. Right Florists Pvt. Ltd.25 (Right Florists), affirmed this principle. This case
involves Google Ireland Ltd., a Yahoo company and their Kolkata-based client,
Right Florists Pvt. Ltd. The defendants used advertising on Google and Yahoo
in order to generate business for itself. In return for such services, it paid three
million rupees. However, the defendant failed to withhold any tax on that
payment. The dispute fundamentally revolves around differing interpretations
of tax law, the DTAA that India has with U.S and Ireland and the OECDs
Model Tax Convention that was discussed earlier. The issue before the tribunal
was as to whether payments made in respect of online advertising on such
search engines could be taxable in India. According to the tax department of
India, the defendants should have withheld tax on payment itself, and since it
failed to do so, it would not be entitled to claim a deduction for advertising
23 COMMENTARY

ON

ARTICLE 5

OF THE

OECD MODEL TAX CONVENTION (available at

http://www.oecd.org/berlin/publikationen/43324465.pdf.)

24 Ibid.
25 ITA No. 1336/Kol/2011
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expenditures from its income. The defendants contention was that it was not
required to withhold tax since neither of the companies has a fixed place of
business or operation in India and therefore, their income would not be taxable
in India. The ITAT relied on the decision of the Apex Court of India in the case
of Hyundai Heavy Industries Co. Ltd. 26, where it was observed that although
the concept of PE had its origins in tax treaties, it could also be understood in
context of the laws established by judges. This concept, in the first instance,
evolved due to traditional commercial relations wherein it was essential that
physical presence of an entity was there in the other country, if a significant
level of business was being carried on. The tribunal observed that even where
there is a reasonable level of commercial activity, conventional tests devised to
check if a PE exists would necessarily fail in a virtual world. Further, relying
on the Commentary of the OECD MC, the tribunal held that presence of an
enterprise only through an enterprise, even in the case of a search engine,
would not create a PE in India, since such a website is not tangible. Thus, it
was held by the tribunal that these websites would not constitute a PE unless
they also had a server located in the same jurisdiction. Consequently, Google
and Yahoo could not said to have a presence in India simply by virtue of the
fact that they have online websites accessible in this country, and thus it cannot
be said that they constitute a PE in India. Thus, this case, the principle
articulated in Article 5(1) of the OCED Convention has been upheld even in
the case of virtual transactions. Another requirement spelt out in the
Commentary of the OECD MC requiring the pre-requisite that an entity must
carry out its business, wholly or partly, through or from a fixed place. Thus, in
order for a server located in India to constitute a PE, it is essential that it is
used, wholly or partly, by the foreign entity to carry on its business needs. The
same can also be seen in the OECD Commentary wherein the following is laid
down:
42.4 Computer equipment at a given location may only
constitute a permanent establishment if it meets the requirement
of being fixed. In the case of a server, what is relevant is not the
possibility of the server being moved, but whether it is in fact
moved. In order to constitute a fixed place of business, a server
26 CIT v. Hyundai Heavy Industries Co. Ltd. [2007] 291 ITR482 (SC)
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will need to be located at a certain place for a sufficient period of

time so as to become fixed within the meaning of paragraph 1 (of
Article 5).27
The third requirement, as noted previously, is that the server should be at the
disposal of the non-resident entity. In this regard, the case of Airlines Rotable
Ltd. v. JDIT28 becomes relevant; wherein it was held that the physical test or
the place of business test mandated that there should be a physical location
where business of the concerned enterprise is being carried out. This location
should be at the disposal of that foreign enterprise, and it is essential that it be
used for the business of the foreign enterprise as well. Mere factual use of the
place would not suffice. Thus, in order to give a positive finding about the
existence of a articular location as a PE of a foreign establishment, it must be
established that such a place should be at the disposal of the foreign enterprise
and the enterprise should have some sort of right to use the said physical
location for the purpose of its business. An exception to this, would be as laid
out in another case, wherein even if the server is not strictly at the disposal of
the non-resident entity, but is maintained by and is at the disposal of a
dependent agent, there is a risk that a PE is created. The ITAT distinguished
this from the case of services provided by an independent agent by holding
that:
A PE should project the foreign enterprise in India. The assessee
before us has appointed different agents in India (Such agents)
have their own presence and business with which they are
perhaps more concerned and may be surprised to find themselves
characterised as projecting the assessee in Indian soil. There is
no evidence to show that the assessee can, as a matter of right,
enter and make use of the premises of these agents for its
business. We therefore hold that there is no fixed place PE of the

27COMMENTARY

ON

ARTICLE 5

OF THE

OECD MODEL TAX CONVENTION (available at

http://www.oecd.org/berlin/publikationen/43324465.pdf.)

28 ITA No. 3254/Mum/06

14 | P a g e

assessee in India within the meaning of Article 5.1 of the

DTAA.29
Thus, if there is an automated equipment which is being maintained by an
independent agent, in the course of business and in pursuance of a business
arrangement between the foreign enterprise and the agent operating in the
source state, such a place would constitute a PE, so long as it can be effectively
established that this is done at the disposal of the foreign enterprise.
In another instance30, the Authority for Advance Rulings (AAR) determined
that a foreign companys server would constitute a PE, and that any profits
attributable to it would be taxable in India. In this case AREVA T&D India Ltd,
the subsidiary of AREVA T&D SAS France was to participate in an IT sharing
services agreement, so that the French company may provide technology
support services. The Applicant, in this case, approached the AAR in order to
determine the taxability of services rendered by the French holding company,
and also to determine the consequent tax-withholding obligation. The AAR
rules that since the services here were to be provided by the utilization of some
hardware, which was equipment that the French company had at its disposal by
virtue of the agreement with the subsidiary company, which satisfied all the
tests laid out above for a PE. Thus, such all profits attributable from such
services would be taxable, as a PE would be formed on execution of the
agreement.
There are situations, which may arise where a companys servers may be
located in India and other incidental work is carried on outside. These servers
are generally placed here in order to facilitate Indian users, and it is essential to
determine whether the installation of such services is for a limited purpose of
search alone, as is with search engines, or if it is in the nature of constituting a
permanent establishment.31
29COMMENTARY

ON

ARTICLE 5

OF THE

OECD MODEL TAX CONVENTION (available at

http://www.oecd.org/berlin/publikationen/43324465.pdf.)

30 I.T.A. Nos. 4330/Del/2009

31

http://www.internationallawoffice.com/newsletters/detail.aspx?g=35f0aa47-c0e6-4791-

ba77-a32c4cb49258, last accessed on 08.03.2015.

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BIBLIOGRAPHY

Books Referred:
Leonardo F.M. Castro, PROBLEMS INVOLVING PERMANENT ESTABLISHMENTS:
OVERVIEW

OF

RELEVANT ISSUES

IN

TODAYS INTERNATIONAL ECONOMY , 2

Global Bus. L. Rev. 125 (2012).

Cases Referred:
Airlines Rotable Ltd. v. JDIT, ITA No. 3254/Mum/06.
Al Nisr Publishing, In Re (1999) 239 ITR 879 (AAR).
CIT v. Hyundai Heavy Industries Co. Ltd. [2007] 291 ITR482 (SC).
CIT v. Visalakshi Achi [1937] 5 ITR 448.
Furgo Engineering B.V v. ACIT [2008] 122 TTJ 655 (Del).
Income Tax Officer v. Right Florists Pvt. Ltd., ITA No. 1336/Kol/2011.
Joseph Fowler v. MNR, (1990) 90 DTC 1834.
Ministry of Finance (Tax Office) v. Phillip Morris GmbH, 4 INTL TAX L. REP.
903.
TVM Ltd. v. CIT, (1999) 237 ITR 230 (AAR).
UAE Exchange Centre Ltd v. Union of India, (2009) 11 ITLR 714.
Western Union Financial Services Inc. v. DDIT, (2006) 101 TTD 56 (Del).
Articles Referred:
Cockfield, Arthur, THROUGH THE LOOKING GLASS: COMPUTER
SERVERS AND E-COMMERCE PROFIT ATTRIBUTION (2002) 94 TN 761768.
Gianni, Monica, THE OECD'S FLAWED AND DATED APPROACH TO
COMPUTER SERVERS CREATING PERMANENT ESTABLISHMENTS
(April26,2014).17Vand.J.Ent.&Tech.L.1(2014).

17 | P a g e

 Hoffart, Benjamin, PERMANENT ESTABLISHMENT IN THE DIGITAL AGE:

IMPROVING AND STIMULATING DEBATE THROUGH AN ACCESS
TOMARKETS PROXY APPROACH, 6 Nw. J. Tech. & Intell. Prop. 106 (2007).
Conventions/ Statutes Referred:
Income Tax Act, 1961.
Model Tax Convention on Income and Capital, OECD Committee of Fiscal
Affairs Volume I Commentary on Article 5 , OECD, Paris [July 2005].
Websites Referred:
http://www.internationallawoffice.com/newsletters/detail.aspx?g=35f0aa47-c0e64791-ba77-a32c4cb49258.
http://www.nishithdesai.com/fileadmin/user_upload/pdfs/Business_Connection_a
nd_Permanent_Establishment.pdf.
http://www.taxindiaonline.com/RC2/inside2.php3?
filename=bnews_detail.php3&newsid=6675.
https://www.pwc.com/gx/en/tax/publications/assets/pwc-permanentestablishments-at-the-heart-of-the-matter-final.pdf

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