CIT Vs Nokia Network OY (Delhi High Court)
Delhi High Court held that Nokia Network OY does not have Fixed Place Permanent Establishment in India [PE] and hence offshore supplies were not taxable in India. Appeal stands dismissed, accordingly.
Facts- Nokia Networks OY, the respondent assessee, was a company incorporated under the laws of Finland and engaged in the manufacture of advanced telecommunication systems and equipment. The GSM equipment manufactured was used in relation to fixed and mobile phone networks. Nokia OY was also engaged in the trading of telecommunication hardware and software.
In 1994, Nokia OY is stated to have established a Liaison Office and which was followed by the incorporation of a fully owned subsidiary, NIPL on 23 May 1995. According to the Respondent, GSM equipment manufactured in Finland was sold to various Indian telecommunication operators from outside India on a principal-to- principal basis under independent buyer-seller arrangements.
Post incorporation of NIPL in May of 1995, the installation activities were undertaken by the said entity in terms of independent contracts which it entered into with Indian telecom operators. The assessee, Nokia OY, is stated to have consistently maintained the position that the said installation activities were undertaken by NIPL in terms of separate agreements which it had entered into with Indian telecom operators. The two exceptions to such contracts were those entered into with Modi Telstra (India) Limited and Skycell Communications Ltd. and which were signed prior to the incorporation of NIPL.
