16 January 2015
Hi, Our parent company, which has no PE in India, has received notice from Delhi to file returns in India from FY10-11. They have no PE in india nor do they have any transaction in India . All they receive is management fees from Indian subsidiary on which TDS is deducted as per treaty. Please let me know : 1. If they have any obligation to file return in India? 2. If so under which head of Income? 3. Do they need to file any audit or TP report?
Income received by a Non Resident by virtue of business connection in India are deemed to accrue or arise in India, irrespective of its residential status. An NR is treated to have a Permanent Establishment in India , if it has a branch/sales office etc; which habitually exercises an authority to conclude contracts on behalf of the principal.
Hence, in respect of the income attributable to business connection in India, the Department might have send notice for filing IT return to the Parent Company. The filing to be based on the contents of the IT Notice
16 January 2015
management fee will be consider your parent company income in india and file to its ITR for that income. you are subsidiary company then you are PE for your parent company. your parent company file to itr.
Querist :
Anonymous
Querist :
Anonymous
(Querist)
02 February 2015
Thanks both for your reply.
However, In our case, subsidiary co. does perform sales functions but never concludes contract on behalf of parent Co. Further, subsidiary co is seperate legal entity registered in India.
Is it that, all foreign parent Co. becomes PE in India merely by having subsidiary Co. in India. Can you please throw some more light on my queries...
CAclubindia
