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2024 (3) TMI 308 - ITAT DELHIAccrual of income in India - PE in India or not? - UK DTAA - project office situated in India treated as fixed place PE in terms of Article of DTAA - receipts from offshore supply on presumptive basis u/s 44BB - AO observed that the contract with ONGC is a integrated contract for offshore supply as well as onshore activities and the consortium member is working on behalf of the assessee hence, forms the PE of the assessee in India - whether assessee’s income is to be computed u/s 44BB? - HELD THAT:- The information given by ONGC in pursuance to notice u/s 133(6) of the Act makes it very clear that the assessee was only engaged in manufacturing and supply and support of components including manufacture and supply of subsea and top side control system. Thus the material on record clearly indicate that the assessee was not in any way involved in onshore activities including installation at the site of ONGC. It appears, just to show that facts in the impugned assessment year are different from A.Y. 2020-21, the Assessing Officer has attempted to project the facts in a different manner. In the process, has completely misconceived the facts. Not a single piece of evidence has been brought on record by the Assessing Officer to establish that the assessee had any kind of PE in India in the year under consideration. As in assessee’s case in A.Y. 2020-21 [2023 (6) TMI 351 - ITAT DELHI] held that the AO has failed to specify how the PE came into existence and made the offshore supply of components attributable to PE. Assessing Officer has failed to establish how the consortium member constitutes PE in India. Referring to the decision of E-Funds [2017 (10) TMI 1011 - SUPREME COURT] Coordinate Bench has further held that burden of establishing existence of PE is on the Revenue, which has not been discharged. Thus ultimately, Coordinate Bench has held that since there is no PE of the assessee in India, section 44BB of the Act would not apply. Thus section 44BB of the Act cannot be invoked to tax the receipts from offshore supply on presumptive basis as the Revenue has failed to establish existence of PE in India. Assessing Officer is directed to delete the addition. - Assessee appeal allowed.
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