INCOME TAX ACT, 1961

Section 9(1)(i)

Income deemed to accrue or arise in India - Under section 9(1)(i) - Offshore supply made to Indian PSU's by non-resident assessee -

Assessee based at China, was engaged in the business of manufacture and supply of composite long rod insulator and other hardware fittings for Optical Fibre Ground Wire (OPGW) used in the transmission lines. It received huge amount on account of offshore supply made to Indian PSUs which assessee claimed to be not chargeable to tax under Indian Taxation. AO, however, taxed the same. Held: Title over the goods, for which assessee received the payment, was transferred outside India and sale was completed outside India. Thus, sale incident in respect of supply of goods having completed outside India and transfer of title over the goods, having passed from assessee to the contractees outside India in terms of the contract, receipts from such supply of goods and equipments could not be made taxable in India. Accordingly, AO was directed to delete addition.

REFERRED :

FAVOUR : In assessee's favour.

A.Y. : 2020-21

IN THE ITAT, DELHI BENCH

SAKTIJIT DEY, V.P. & PRADIP KUMAR KEDIA, A.M.

Jiangdong Fittings Equipments Co. Ltd. v. ACIT

ITA No. 349/DEL/2023

5 March, 2024

Assessee by: Kamal Sawhney, Arun Bhadoriya & Puru Medheria, Advs.

Revenue by: Vizay B. Vasanta, CIT-D.R.

Pradip Kumar Kedia, A.M.

The captioned appeal has been filed by the assessee against the assessment order passed by the assessing officer under section 143(3) read with section 144C(13) dated 22-12-2022 for assessment year 2020-21 in question.

2. As per the grounds of appeal, the taxability of receipts from offshore supply of equipments by the assessee is essentially in question.

3. Briefly stated, the assessee company Jiangdong Fittings is a company incorporated under the laws of China and is a tax resident of China. The assessee company is engaged in the business of manufacture and supply of composite long rod insulator and other hardware fittings for Optical Fibre Ground Wire (OPGW) used in the transmission lines. During the year under consideration, the assessee is stated to have received an amount of Rs. 14,28,30,433 on account of offshore supply made to Indian PSUs which the assessee had claimed to be not chargeable to tax under Indian Taxation and accordingly, claimed the refund of corresponding tax credit.

SUBSCRIBE FOR FULL CONTENT