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(a) The Appellant has Business Connection ('BC') and Permanent Establishment ('PE') in India in the form of Huawei Telecommunications (India) Co. Pvt Ltd ('Huawei lndia'), which is: assessed to tax in New Delhi i;

(b) Employees of Huawei India have authority to negotiate and / or concluding / Securing contracts on behalf of Appellant in India

(c) The Appellant has shown Huawei India's address as its local address for correspondence purposes and its employees are operating from the premises of Huawei India;

21. The ld. counsel for the assessee, through written submissions, stated that the contention of the Assessing Officer that employees of the Huawei China performed negotiation and bidding activities from the office premises of Huawei India is factually incorrect. In this regard, it is submitted that the employees of the appellant who visited India did not have unrestricted access to Huawei India's office premises. Further, copy of certificate from the Huawei India, Human Resource Head is enclosed at page 63A of the paper book, certifying that the premises and facilities of Huawei India were allowed to employees of Huawei China visiting India only on a case specific basis, that, too, on the basis of specific request made by Huawei China. Further, it is also been certified that even such personnel were not given free access to all areas and facilities within the premises.

59. In its written submissions, the ld. counsel for the assessee further contended as under:

"On perusal of Article (4) of DTAA, it is clear that mere presence of an independent agent does not result in a PE, provided the agent is acting in the ordinary course of its business. Dependent agency PE can be said to result only where it can be established that such agent has or habitually exercises an authority to conclude contracts in India on its behalf.

At the outset, it is respectfully submitted that Huawei India does not constitute Dependent Agency as PE, as all strategy/ policy and decision making functions reside with Huawei China outside India and role of Huawei India was only restricted to providing local market inputs and interface and undertaking marketing activities for Huawei China on principal to principal basis.

It is submitted that in order to determine the status of the Indian enterprise (i.e., independent or dependent), the following tests need to be applied having regard to the provisions of the treaty and various international commentaries on interpretation of this article:

 Whether or not the Huawei India is legally and economically independent of Huawei China?;

 Whether Huawei India is acting in the ordinary course of business, when acting on behalf of Huawei China? and  Whether Huawei India's activities are devoted wholly or almost wholly on behalf of Huawei China and the transactions are at arm's length or not?