Section 9(1)(v) — the law in short
What the courts have decided on section 9(1)(v), in one screen. Read this first; open an entry when you need the facts, the reasoning and the source.
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CIT (International Taxation)-3 v Bank of Tokyo-Mitsubishi UFJ Ltd
High CourtHelps taxpayerValidity unconfirmed
Our Indian branch earned interest on balances kept with the head office and overseas branches. Is that taxable in India?
No, on the years before the 2015 amendment. A branch is not a separate legal personality, and one cannot make a profit out of oneself, so interest received by the Indian permanent establishment from its own head office or overseas branches is not chargeable to tax in India. The Explanation to s.9(1)(v), which deems a banking permanent establishment to be a separate and independent person, took effect only from 1 April 2016 and had no application.
Listed strongest first: Supreme Court, then High Court, then Tribunal, then CBDT. Nothing here has yet been read in full by a chartered accountant — open an entry to see where it came from.