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2023 (8) TMI 1273 - AT - Income TaxIncome deemed to accrue or arise in India - existence or otherwise of Permanent Establishment (PE) in India -profit attributable to the PE - assessee is a non-resident corporate entity incorporated under the laws of United States of America (USA) and is a tax resident of USA [assessee is a Developer, Marketer, seller of Robotic Process Automation (RPA) and related products and services] - whether the assessee in the relevant assessment years had any fixed place PE in India in terms with Article 5(1) read with Article 5(2) of the India – USA DTAA? - HELD THAT:- Facts on record reveal that, though, many of the employees visited India, but there is no evidence to suggest that all of them used the premises of AASPL. Even assuming that all those employees used the premises of AASPL but there is no evidence to suggest that they used the premises for the activity relating to the sale of software. Undisputedly, the receipts, which are sought to be attributed to the PE are from sale of software licence, however, as could be seen from the facts on record, the transfer of licence takes place, once, the licence key is generated and made available to the licencee after execution of the contract. Insofar as the receipts from provision of services, undisputedly, the assessee has offered them to tax. Though,DR has alleged before us that the licence agreement was executed in India contrary to the claim of the assessee, however, no documentary evidences has been brought to establish such facts. Thus, we are of the view that the Revenue has failed to establish on record through credible evidence that the assessee has a fixed placed PE in India through which it has earned the income relating to sale of software licence. Therefore, in our considered opinion, no part of such income can be attributed to the PE. Grounds are disposed of accordingly. Taxability of amount offered towards FTS/FIS - Undisputedly, in the returns of income filed for the impugned assessment years, the assessee has suo motu offered the income received from the services rendered as FTS/FIS under Article 12(4) of India – USA DTAA. It is the claim of the assessee that the receipts cannot fall within the ambit of FIS in view of Article 12(5)(a) of the tax treaty. Admittedly, the aforesaid claim was not made by the assessee either before the Assessing Officer or even before learned DRP. Neither of the authorities have factually examined the nature and character of such receipts by investigating into the relevant facts. Therefore, entertaining assessee’s claim at this stage, would require fresh investigation into the facts, which in our view, is not permissible.
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