Case Law Details
Baker Hughes Energy Technologies UK Ltd Vs ACIT (ITAT Delhi)
ITAT Delhi held that in absence of a Permanent Establishment, provisions of section 44BB of the Income Tax Act has no application.
Facts- The assessee, Baker Hughes Energy Technology UK Limited, is a company incorporated in, and a tax resident of, United Kingdom (UK). It is a part of Baker Hughes Group of companies.
The assessee along with four other consortium members was awarded a contract by ONGC on 05.11.2018. It was contended by the assessee before the AO that the offshore manufacture and supply of equipment and parts to ONGC is not taxable in India since neither the assessee had a Permanent Establishment (PE) in India nor could provisions of Section 44BB be applied to sale of equipment made from outside India.
AO vide draft order dated 19.03.2022. held that the “consortium member is working on behalf of the Assessee Company which forms the PE of the Assessee Company”. The AO further held that the assessee was also involved in survey, installation and commissioning of the equipment in India and since the payments were not bifurcable the entire receipt of the assessee was taxable in India u/s. 44BB of the Act.
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