ITA Nos. 1814/Mum/2024 & others

Parties Involved

Facts Summary

The assessee, Mckinsey and Company Singapore PTE Limited, is part of the McKinsey group of entities incorporated in Singapore. The assessee filed its return of income for the Assessment Years 2017-18 to 2019-20, declaring total income at Rs.Nil. The assessee's case was selected for scrutiny, and notice under sections 143(2) and 142(1) of the Income Tax Act, 1961 was issued. The Assessing Officer observed that the assessee had entered into international transactions with its Associated Enterprises, McKinsey & Co., Inc. (Indian Branch), and was engaged in rendering Strategic Consultancy Services to its clients. The assessee claimed that the borrowed service fees received from Mckinsey India were business receipts and not taxable in India as there was no Permanent Establishment (PE) in India. The Commissioner of Income Tax (Appeals) deleted the impugned addition, and the Revenue is in appeal before the Income Tax Appellate Tribunal challenging the order of the Commissioner of Income Tax (Appeals).…

Legal Issues

• 1. Whether the borrowed service fees received by the assessee from Mckinsey India constitute fee for technical service or business profit?
• 2. Whether the assessee had a permanent establishment (PE) in India?

Judgment Outcome

Decided in favour of Partly Assessee / Partly Revenue.

Precedents Relied Upon

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