Section 9 of the Income-tax Act, 1961 read with article 5 of Model OECD convention - Income - Deemed to accrue or arise in India (Permanent establishment) - Assessment years 2008-09 to 2012-13 - Assessee-company was established as Liason Office (LO) in India for Tesco, Hongkong - It acted as a communication channel between Tesco, Hongkong and manufacturers in sourcing apparels from India - During assessment proceedings, Assessing Officer opined that activities of LO were not confined to activities related to purchase of goods in India for purpose of exports rather said activities of LO related to supply chain management for Tesco, Hong Kong - Assessing Officer, thus concluded that activities of the LO were not confined in exception provided in Explanation 1(b) to section 9(1)(i) - He accordingly passed assessment order determining assessee's taxable income in India - It was noted that Co-ordinate Bench of Tribunal in assessee's own case relating to earlier assessment years held that there was no evidence on record to suggest that LO had indulged in carrying on commercial activities and that it was in fact, a 'permanent establishment' of Tesco, Hong kong in India - It was thus concluded that Explanation 1(b) to section 9(1)(i) was clearly applicable to assessee's case - Whether following aforesaid order of co-ordinate Bench of Tribunal, impugned addition made by Assessing Officer for assessment years in question was also liable to be deleted - Held, yes [Para 5.3-3] [In favour of assessee]

Tesco International Sourcing Ltd [2015] 58 taxmann.com 133 (Bangalore - Trib.)