The Times of India has a report on a decision of the Bombay High Court in Clifford Chance v. DCIT ruling that “… foreign law firms, even though working as solicitors for multinational corporations with operations in
The decision itself is available here. According to ITAT online, the decision held that “in accordance with the judgment of the Supreme Court in Ishikawajima Harima 288 ITR 408 a non-resident is taxable on income for services only if the services are rendered within
It is interesting to note that an earlier decision of the Bombay High Court in CIT v. Siemens AG has held, “the judgment of the Supreme Court in Ishikawajima Harima 288 ITR 408 (SC) has been overcome by the Explanation to s. 9 inserted by the FA 2007 which provides that income from royalty paid by a resident would be deemed to accrue in India even if the recipient has no PE…” The Siemens decision is available here.
The latest decision appears to raise an important issue as to the scope of the explanation to Section 9 inserted by the Finance Act, 2007. How far does the amendment actually overcome Ishikawajima-Harima? It appears that at least some part of the Supreme Court decision is still the law of the land despite the later amendment.
A detailed post analyzing these judgments will follow shortly.
(Update: See this post for the more detailed note)