INCOME TAX ACT, 1961

Section 9(1)(i) Article 5

Income deemed to accrue or arise in India under section 9(1)(i) - Permanent establishment - Taxability of revenue from supply of hardware to Indian customers -

Nokia Corporation was a company incorporated under the laws of Finland and was engaged in the business of supplying advanced telecommunications systems and equipment for use in fixed and mobile phone networks. The assessee had presence in India in the form a 100% subsidiary by the name of Nokia India Private Ltd. (NIPL). Subsequently, it was closed in January, 2002. For the relevant previous years the assessee filed its returns of income declaring 'NIL' income. In the assessment orders passed by AO, the assessee had been held to constitute a PE in India and revenues derived by the assessee from certain sources were taxed in India. AO and CIT(A) held that NIPL was a PE of assessee.Held: Since the matter of PE stands adjudicated in favour of the assessee, in the absence of any change in the material facts, following the earlier order of coordinate Bench of the Tribunal, it was held that the assessee did not have a PE within the terms of article 5 of India-Finland DTAA. Thus, this ground of appeal of the assessee was allowed. Hence, the revenue from supply of hardware was not taxable in assessee's hands.

Followed:ITAT Special Bench, Delhi passed an Order, dated 5-6-2018 : (2018) 65 ITR (T) 23 (Del) : 2018 TaxPub(DT) 2996 (Del-Trib) for the assessment year 1997-98 and 1998-99.

REFERRED :

FAVOUR : In assessee's favour.

A.Y. :

INCOME TAX ACT, 1961

Section 9(1)(ii) Articles 7 and 13

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