TMI Blog2023 (9) TMI 507X X X X Extracts X X X X X X X X Extracts X X X X ..... s, this is a legacy issue continuing from assessment year 2014-15 onwards. In the latest order passed for assessment year 2017-18 [ 2023 (2) TMI 1107 - ITAT DELHI] hold that the assessee had no PE in India in any form whatsoever. Therefore, the addition made by attributing a part of the income of the assessee to the alleged PE has to be deleted. Thus we hold that the assessee had no PE in India, either fixed place or supervisory, to which the profit from revenue earned from sale of raw-material and finished capital goods can be attributed. Accordingly, we delete the addition made by the Assessing Officer. Grounds are allowed - SHRI SAKTIJIT DEY, JUDICIAL MEMBER AND DR. BRR KUMAR, ACCOUNTANT MEMBER For the Appellant : Ms. Shruti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s, motor-cycles, utility and other engines. Assessee undertakes moulding and machining of plastics and manufacturing of various specialized tools and dyes. In the year under consideration, the assessee had sold raw-material, components and capital goods to its Indian group entity and earned revenue of Rs. 124,70,13,324 and Rs. 7,68,98,560 respectively. Besides the aforesaid amounts, the assessee had received income in the nature of royalty and Fee for Technical Services (FTS), which were offered to tax in India under the treaty provisions. Whereas, the income earned from sale of raw-material and capital goods were not offered to tax in India on the plea that such supplies have been made on a Principal to Principal basis outside India and th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... issue continuing from assessment year 2014-15 onwards. In the latest order passed for assessment year 2017-18 in ITA No.1789/Del/2022 dated 26.12.2022, the Tribunal following its earlier decision has held as under: 6. Having considered rival submissions, we find, identical issue relating to existence of PE came up for consideration before the Tribunal in assessment years 2014-15 and 2015-16. While deciding the issue in order dated 09.03.2022 in ITA Nos. 8960 54/Del/2019, the Coordinate Bench accepted assessee s pleading that it has no PE in India in any form. In this regard, the following observations of the Coordinate Bench would be relevant: 12. We have heard the Ld. Representatives of both the parties at length and perused the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ss to the premise to the enterprise for the purposes of the project would not suffice. The place would be treated as at the disposal of the enterprise when the enterprise has right to use the said place and has control thereupon. 12.4 In light of the facts of the case and various judicial precedents wherein the constitution of Fixed Place PE has been considered and adjudicated upon, in our opinion the conditions laid down for creation of a Fixed Place PE is not satisfied in the assessee s case. Merely providing access to the premises by FRL for the purpose of providing agreed services by the assessee would not amount to the place being at the disposal of the assessee. No doubt the assessee has access to the factory premises of FRL but it ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd to carry on business through that permanent establishment if it carries on supervisory activities in that Contracting State for more than six months in connection with a building site or construction, installation or assembly project which is being undertaken in that Contracting State. 13.1 In the previous hearing held on 1.11.2021 this Bench had directed the assessee to file the description of services rendered by the employees of the assessee on their visit to India and the corresponding clause under the Agreement for Dispatch of Engineers under which such services would fall. In response, the assessee furnished Annexure 1 for AY 2014-15 and Annexure 2 for AY 2015-16 vide its written submission filed on 17.11.2021 providing the nam ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... installation or assembly project. Hence the issue of computation of period of six months also becomes academic. The employees are visiting India on year to year basis under the contract. In AY 2014-15 and AY 2015-16, the employees visited India to render certain technical services under the License Agreement read with Dispatch of Engineers Agreement which have been duly offered to tax by the assessee as FTS as per the provisions of India- Japan DTAA. We therefore hold that the there is no Supervisory PE of the assessee for the AYs under consideration. 13.4 Since we have held that the assessee does not have a PE, the issue of attribution of profits to such PE does not arise for consideration. 7. There cannot be any dispute that factua ..... X X X X Extracts X X X X X X X X Extracts X X X X
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