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TMI Blog2023 (6) TMI 1321X X X X Extracts X X X X X X X X Extracts X X X X ..... pressors/pumps/turbines and related services in the Oil & Gas industry. It also renders various services in relation thereto. In the assessment year under dispute, the assessee filed its return of income on 30.11.2018 declaring income of Rs.5,13,43,256/-. In course of assessment proceedings, the Assessing Officer noticed that in addition to the income declared in the return of income, the assessee has earned substantial amount of Rs.234,98,58,288/- from supply of spare parts/equipments to various customers in India. However, the assessee has not offered them to tax on the reasoning that those are offshore supplies, wherein, the title over the goods have passed outside India. Examining the materials on record, the Assessing Officer found that in course of a survey action u/s. 133A of the Act on 02.03.2007 conducted in case of General Electric International Operations Company (GEIOC), copies of various documents were found and statements of various persons were recorded relating to sales made through various GE overseas entities, employees working from liaison office of GEIOC and roles and responsibilities of various employees. From the materials found during the survey operation, it ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nal High Court in assessment year 2002-03 to 2006-07 and assessment year 2008-09 upholding the existence of PE, proceeded to frame the draft assessment order by attributing 2.6% of the total value of offshore supplies as the income of the PE in India and accordingly made addition of Rs.6,10,96,315/- to the income of the assessee. Further, the amount received towards onshore services were held to be effectively connected to the PE in India and brought to tax under section 44DA of the Act as business profit. Accordingly, the draft assessment order was passed. Against the draft assessment order, the assessee raised objections before learned DRP. However, relying upon the orders of the Tribunal and Hon'ble High Court in assessment years 2002-03 to 2006- 07, learned DRP upheld the decision of the Assessing Officer. 6. Before us, learned counsel appearing for the assessee, accepting the factual position in earlier assessment years, though, submitted that the Tribunal and Hon'ble High Court have held that the assessee had a fixed place PE in India in the form of office premises taken in AIFACS building, however, he submitted, the factual position has substantially changed in the impugned ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sessee, the departmental authorities could not have concluded that the assessee has a PE in India by merely adopting a cut & paste job by following their earlier orders. In this context, he drew attention to the observations of Hon'ble Delhi High Court in case of Blackstone Capital Partners(Singapore) VI FDI Three Pte. Ltd. vs. ACITdated 30.01.2023 delivered in WP(C) 2562/2022. He submitted, since, the assessee has brought all evidences and materials on record in support of its claim that no fixed place PE existed in the year under consideration and since, the departmental authorities have failed to controvert the evidences brought on record or returned any finding with reference to such evidence regarding existence of PE, the Revenue should not be given a second inning to improve its order, when assessee's specific averments on existence of PE remained un-rebutted both by the Assessing Officer and learned DRP. In support of such contention, learned counsel relied upon following decisions : (i). CIT vs. Kamdhenu Steel & Alloys Ltd., 361 ITR 220 (Delhi); (ii). ACIT vs. Anima Investment Ltd., 73 ITD 125(TM)(Del); (iii). CIT vs. Harikishan Jethalal Patel, 168 ITR 4721(Guj) (iv ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Court held existence of PE, no longer exists in the impugned assessment year. 12. This is clearly evident from the submissions made and documents filed before the departmental authorities. Despite such submissions and evidences produced by the assessee, the departmental authorities have remained oblivious to such facts and materials brought on record and proceeded to conclude existence of PE merely relying upon the past orders passed by them and higher appellate authorities. It is trite law, the existence or otherwise of PE has to be determined on year to year basis, as the existence of PE has to be decided based on the definition of PE in the relevant tax treaty. Merely because in one year, the assessee had a PE in India, that by itself cannot lead to the conclusion that the assessee must be having a PE in subsequent assessment year, without looking into the relevant facts. In this context, we refer to the decision in the case of M/s. Bentley Nevada Inc. (supra). Further, in case of E-Funds IT Solution Inc. (supra), Hon'ble Supreme Court has very clearly and categorically held that the onus is entirely on the Revenue to establish existence of PE. 13. Adverting to the facts of th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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