Director Of Income Tax (International Taxation) & Anr. vs Samsung Heavy Industries Co. Ltd.

Whether the Project Office in Mumbai constituted a Permanent Establishment (PE) under Article 5 of the India-Korea DTAA, and whether 25% of offshore revenue could be attributed as taxable income in India without establishing actual attribution to the PE --- Held: No. The Supreme Court held that the Project Office did not constitute a PE as its activities were preparatory or auxiliary, and the attribution of 25% revenue was arbitrary without evidence linking it to the PE's activities.