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Tax Publishers
Existence of PE (Permanent Establishment) a matter
of fact to be proven by revenue - offshore delivery of goods is not taxable in
India
Facts:
Assessee, a UK entity was given the
responsibility to deliver goods offshore arising out of a consortium contract
with ONGC. Due a survey under section 133(6) at ONGC it was alleged that
offshore delivery of goods was held to be taxable for the assessee as the
consortium created a PE as per the Indo-UK DTAA. Revenue however did not
establish how the PE had got triggered for the assessee. It was also held that
the offshore delivery of goods was taxable under section 44BB. On appeal
DRP upheld the views of the AO. On further appeal -
Held in favour of the assessee that there
was no PE for the assessee as revenue had failed to establish how the PE was
created in the first place. The offshore delivery of goods was not taxable under
section 44BB either and it was outside the ambit of tax in India.
Ed. Note: Establishing existence of PE is a sine qua non before trigger of PE
taxation.
Case: Baker Hughes Energy Technologies UK Ltd. v. ACIT 2023 TaxPub(DT)
3455 (Del-Trib)
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