Case Law Details
GE Energy Parts Inc Vs ACIT (ITAT Delhi)
ITAT Delhi held that attribution of profit from offshore supply and services to the Permanent Establishment unsustainable as assessee didn’t have any Permanent Establishment in India in the assessment years under dispute.
Facts- The assessees are non-resident corporate entities. The first named assessee is a tax resident of the USA. Whereas, the second named assessee is a tax resident of Switzerland. As stated by AO, both the assessees are engaged in the business of offshore supply of plants, equipment, spare parts and related offshore services to customers in India in relation to maintenance of power plants. While dealing with identical nature of transactions in past assessment years, notably, assessment years 2002-03 to 2006-07 and 2008-09, AO held that the assessee had a PE in India in the form of premises of General Electrical International Operation Company (GEIOC) taken on lease at AIFACS building, wherefrom, the assessees carried on solicitation of orders and conclusion of contract by deputing expatriate employees.
It was further held that remuneration paid to the Indian AE, viz., GE India Industrial Pvt. Ltd. (GEIIPL) was the only cost + 5%. The decision taken by AO in the aforesaid assessment years, though, were contested by the assessees upto the Hon’ble High Court, however, they failed.
Based on the past assessment history, AO, while completing the assessments for the impugned assessment years, held that the assessee had a PE in India and accordingly attributed profit from offshore supply and services to the alleged PE.
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