INDIAN RULINGS ON POEM

• The Supreme Court in the case of Erin Estate Vs CIT [1958] 34 ITR 1(SC) (Against the assessee)considered following as relevant criteria:
  • Purchase decisions.
  • Employee engagement decisions.
  • Capital investment decisions.
  • Sales and marketing decisions
  • Annual budget approval.

• The Delhi Tribunal decision in the case of Radha Rani Holdings Private Ltd [2007] 16 SOT 495 (DELHI).
  • Registered office outside India;
  • Director’s permanent residence outside India;
  • Majority of the Board meetings held outside India;
  • Residence of the chairman outside India;
  • Supervision of day to day functions outside India;
  • Statutory auditors outside India.

• The Delhi Tribunal decision in the case of SaraSwati Holdings Corp Inc
  • Directors & Shareholders outside India.
  • Resolution to take decision was executed in the favour of one Shareholder
  • Power of attorney was executed to conduct day-to-day affairs of the business.
  • Through telephonic conversation business decisions were delegated.

• In the case of Integrated Container Feeder Service Vs JCIT, the tribunal analyzed and concluded on the followings grounds:
  • No Business activity was carried out in Mauritius, entire business correspondence was made at UAE.
  • Place of Effective Management (POEM) refers to place where ships are put in service.