SMS Group Gmbh Vs ACIT (ITAT Delhi)
ITAT Delhi held that foreign company receiving consideration for offshore supply of equipment, plant, designs and drawings is not taxable in India since entire transaction has taken place outside India.
Facts- The assessee is a tax resident of Germany, engaged in a business of supply of plants & equipments, supply of drawings and designs and rendering supervisory services in erection, commissioning, performance guarantee, test of equipment supply; and rendering technical services to the customers in metallurgical sector in various parts of the country. The Assessee SMS Group Gmbh by filing the present appeal sought to set aside the impugned order dated 23.05.2022 passed by AO under section 143(3) r.w.s. 144C(13) of the Income Tax Act, 1961 in consonance with the order passed by the Dispute Resolution Panel (DRP) dated 17.03.2022 u/s 144C(5) of the Act.
Conclusion- Held that since the plants and equipments were supplied from outside India and the sale transaction has concluded outside India, the receipts cannot be taxed in India. Admittedly, against the aforesaid decision of the first appellate authority, the Revenue is not in appeal. Thus, when the supply of plant and equipment has been treated as sale transaction completed outside India, hence, not taxable in India, the sale and supply of drawings and designs being inextricably linked to sale and supply of plant and equipment has to be considered cumulatively and as a part of sale and supply of plant and equipment.
